Akasa Airways and The Big Bull

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"If you want to be a millionaire then simply just be a billionaire and invest in aviation sector and you will end up becoming a millionaire."

Stock Market maverick Rakesh Jhunjhunwala has backed upcoming ultra low cost Airline carrier named Akasa Airlines and he will pump around 260 crores and hold around a 40% stake in this venture.

Recently after the bankruptcy of once the Indian Airways giant Jet Airways, the government failing multiple times in bidding for disinvestment of Air India and finally ending up with giving it to the Tata Group, the covid threats circling around the aviation sector and the government not giving any support to aviation sector after facing the repercussions of corona virus pandemic. The business world is shocked as to why the Big Bull is investing in aviation sector.

Although Rakesh has pumped a very small percentage of his net worth so he is not risking more. But he has planned a strategic layout for his ambitions by initially cornering ex president of Jet Airways Aditya Ghosh who completely transformed Jet Airways during his days and former CEO of Indigo Airways Vinay Dube assuring that the company is been managed by experienced and professional management. He has made a big order to the American Company Boeing for huge 72 Boeing 737 Max airplanes. He has made the commitment that Akasa Airlines would be the most affordable, safest and greenest airways of India.

The opportunities and threats for Akasa Air are:

Opportunities:

1. There is still a big opportunity in the aviation sector as it is growing at a great pace if we eliminate the Covid-19 years.

2. The rival airlines have become weak and the company having the largest share i.e. Indigo Airlines is making losses in the previous years so there is a big chance to fill the vacant place in this sector.

3. There are job losses on large scale in this sector so Akasa can recruit employees at an advantageous wage rate.

4. The Government is also lenient in this sector by providing licenses on easy terms and conditions.

Threats:

1. Aviation sector is a very risky sector where      several big players have become bankrupt.

2. There is a still a big threat of new covid-19      outbreak in India which can aggrevate the        problem of this business.

3. No company is safe in this sector as this          as the biggest company which is Indigo            Airlines  having less than half of the                  market share in this sector is incurring              losses.

4. Companies need to have parking sites at          all the big airports and it has a hefty                  amount of capital expenditure associated        with it so Akasa has to make sure that it          can raise a large amount of money as and        when needed 

Reports state that Rakesh Jhunjhunwala is taking a big risk by entering this sector but he says that he is very bullish on aviation sector in India and he is preparing to establish Akasa Airlines in this business so it would be interesting to see that how this would go now.

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