Monday, August 02, 2021

As Indian billionaire plans new airline, Boeing hopes for orders

Indian billionaire Rakesh Jhunjhunwala’s plan to launch an ultra-low-cost airline could give planemaker Boeing a chance to regain lost ground in India after the fall of one of its biggest customers, Jet Airways, two years ago, industry executives say.

Jhunjhunwala, known as “India’s Warren Buffett” for his successful stock investments, plans to team up with the former CEOs of IndiGo, the country’s biggest carrier, and Jet Airways to tap into demand for domestic air travel.

While Jhunjhunwala’s proposed Akasa Air comes at a time when India’s aviation industry is reeling from the impact of the COVID pandemic, which has seen airlines losing billions of dollars, the sector’s long-term prospect makes it a hot market for planemakers Boeing and Airbus.

“There will be a big fight between Airbus and Boeing,” said Nitin Sarin, managing partner at law firm Sarin & Co, which advises lessors and airlines.

“For Boeing, this is a great opportunity to step in and up their game, considering they don’t have any other major operator for their 737 aircraft in India apart from SpiceJet,” Sarin said, referring to Boeing’s narrow-body aircraft.

One industry source said the new venture was already moving towards what could be one of the biggest deals of the year outside the United States to acquire purchased or leased 737s.

Boeing did not comment on Akasa’s plans but said it always seeks opportunities and talks to current and potential customers about how it can best support their fleet and operational needs.

Jhunjhunwala, who is considering investing $35m and would own 40 percent of the carrier, expects to get a no-objection certificate from India’s aviation ministry in the next 15 days, he said in a Bloomberg Television interview Wednesday. The ultra-low-cost airline’s team, which includes a former senior executive of Delta Air Lines Inc, is looking at building a fleet of 70 180-passenger planes within four years, he said.

Jhunjhunwala, whose fortune is valued at $4.6bn by Forbes, did not respond to an interview request.

Indian skies are dominated by low-cost carriers (LCCs) including IndiGo, SpiceJet, GoFirst and AirAsia India, the majority of them operating a fleet of Airbus narrow-body planes.

02/08/21 Al Jazeera

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