The airline venture, being planned as an ultra-low-cost carrier (ULCC), like Irish carrier Ryanair, is Ghosh’s return to the aviation industry after he quit IndiGo in 2018 after a ten-year stint as its president and whole time director.
Ghosh, a lawyer, joined IndiGo in 2008 and steered it from a fledgling airline to the country’s biggest carrier by market share with a fleet of 160 planes, over a thousand daily flights and a market share of Rs 55,000 crore, before he quit. Its market cap as of Wednesday’s close was Rs 64,168 crore.
One of the people cited above said Ghosh will own less than 10% in the airline and will be a board member (as Jhunjhunwala’s nominee). The venture “will be his key focus” although he won’t be part of the management, he added. Jhunjhunwala will hold 40%, while Dube, the main mind behind the airline, will hold over 15% and be its CEO.
Boston-based investor Par Capital Management, which has investments in American ULCC Sun Country Airlines, and homestay aggregator Airbnb are also investing in Akasa.
Ghosh currently is board member at ethnic fabric and lifestyle retailer Fab India as well as hotel aggregator Oyo Rooms. He couldn’t be reached.
ET had on July 12 reported Jhunjhunwala’s plans of investing over $35 million in the airline. Earlier Wednesday, he confirmed his investment plans in an interview to a television news channel. He added that he expects the airline to get a no objection certificate (NOC) from the ministry of civil aviation in 15 days. The airline plans to place an order for 70 planes in its start of operations.
The airline is being planned at a time when India’s carriers, like their global peers, have been deeply impacted by the devastating Covid-19 pandemic. IndiGo, which controls over half of India’s domestic market, announced a record quarterly loss of Rs 3,174 crore Tuesday, pushing its net worth into negative territory for the first time. Sydney’s CAPA-Centre for Aviation has said India’s airlines are standing “on the edge of a cliff”.
It estimates them to post a loss of $8 billion for FY21 and FY22 combined. At least one airline may not survive next year, which on the flip side, may be the opportunity Akasa is counting on to start operations and grow in the cut-throat market.
Dublin-based Ryanair, an inspiration for Akasa, is one of the most successful low fare carriers in the world and also the most aggressive. It’s known as much for its low fares as for multiple extra charges and controversial marketing campaigns most often taking pot shots at rivals. It expects to fly to 100 million passengers this year with its fleet of about 500 mostly Boeing 737 planes.
Akasa will likely have Praveen Iyer, part of the founding team with Dube, as its chief commercial officer. Iyer held several positions at Jet and finally quit as its senior vice-president, revenue management and network planning.
Post that, he was the chief operating officer at Visa enabler VFS and then the chief commercial officer at GoAir for six months till September 2020. Anand Srinivasan former V-P, revenue management at GoAir for two years till June 2020, will head technology at the airline as its CTO/CIO.
Floyd Gracious, former vice president of flight operations at Jet Airways will have a similar role in Akasa while Neelu Khatri, an industry veteran who held several senior positions at Honeywell Aerospace will likely head corporate affairs.