DALLAS – Billionaire Rakesh Jhunjhunwala, co-founder of the brand-new low-cost airline Akasa Air (QP) in India, passed away at the age of 62.
The airline debuted just one week ago, on August 7, 2022, to connect India’s tier 2 and 3 cities. QP ordered 72 Boeing 737 MAX aircraft in November 2021 and took delivery of its first Boeing 737-8 in Seattle, Washington in mid-June 2022. A month later, the LCC would be awarded its Air Operator Certificate (AOC).
Known as the “Big Bull of Dalal Street,” Jhunjhunwala was India’s 36th richest man, according to Forbes, and was often referred to as the Warren Buffet of India. The stock market investor and trader was last spotted on August 7 aboard QP’s inaugural flight between Mumbai and Ahmedabad.
Many analysts were concerned about QP’s future even before it began operations. Losses for billionaire-owned airlines have a history in India. Kingfisher Airlines, owned by Vijay Mallya, and Sahara Airlines, owned by Subrata Roy, all succumbed to this narrative.
Jhunjhunwala, who was renowned for his tenacity, had stated in February that he was ready for failure.
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A Sound Investment in an Unsound Market
Jhunjhunwala was the new airline’s promoter and did so at a time when the domestic aviation industry was struggling due to poor demand and high fuel costs. For a 46% share, Jhunjhunwala invested US$200m in the airline, which had been looking forward to thriving and expanding under his leadership.
Jhunjhunwala teamed with top aviation industry executives for the operation of the airline, in addition to making significant investments. As an illustration, he hired Vinay Dube, the former CEO of Go First (G8) and Jet Airways (9W), to lead the airline. Dube has a 31% ownership interest in the airline.
Aditya Ghosh, who led IndiGo (6E) for ten years till 2018, was also brought on board by him. According to reports, Ghosh owns a 10% share in the airline.
Notably, Jhunjhunwala’s QP has been preparing to offer stock options to staff to retain and recruit them to survive the talent wars in the aviation business.
As quoted by outlookindia.com, Dube said, “The degree to which Akasa plans to grant stock options for staff will be far greater than most airlines in India and hopefully reminiscent of maybe some of the tech startups where they go fairly deep in the way they provide employee stock ownership plans.”
Comments from Akasa Air CEO
The airline’s CEO expressed his sorrow at the passing of the stock market pioneer and hailed Jhunjhunwala for being one of the airline’s first supporters and for having confidence in it. “We are extremely saddened by the untimely demise of Mr. Rakesh Jhunjhunwala this morning,” said Dube.
The CEO added, “Our thoughts and prayers are with Mr. Jhunjhunwala’s family and friends. May his soul rest in peace.”
According to the Indian news outlet, the airline has currently hired 154 pilots, 115 flight attendants, and 14 engineers.
With the sudden demise of Jhunjhunwala, what are your thoughts on the future of Akasa Air? Be sure to leave your comments on our social media channels.
Featured image: The airline unveiled its orange and purple color scheme on May 23. The design is said to be inspired by birds, an aircraft wing, and the sun. Photo: Akasa Air.