Indian billionaire Rakesh Jhunjhunwala is the perfect investor and is proportionately involved with Akasa Air, CEO, founder, and managing director Vinay Dube told CNBC-TV18 in an exclusive conversation.
"Rakesh is the perfect investor...Rakesh and his team are the perfect investors...he is proportionately involved in matters he thinks necessary and where it is very aviation and technical, he lets us do our thing," Dube said.
Billionaire investor Rakesh Jhunjhunwala has said he has invested $50 million in Akasa Air for a 40 percent shareholding. The airline intends to start flights from the end of July with two aircraft. Bengaluru is set to be one of the first bases for the airline.
Also Read:
The airline CEO said that it is focused on customers and its employees.
"Main aspect of our target is our employees and our customers, profitability will follow,” Dube said, adding that the airline is well-capitalised.
"We are incredibly thankful to our investors. Our focus is on launching a good airline with happy customers and happy employees. We have spent the last two years working on cost structure and now our focus lies on customers and employees," Dube said. The airline had recently launched the cabin crew uniform which also showed the cabin crew wearing sneakers in place of heels.
The team behind Akasa also includes Aditya Ghosh who is the co-founder of the airline and is no stranger to the aviation world. He spent 10 years at IndiGo as the president and whole-time director. Ghosh added that they aim to have employee-friendly policies and want Akasa to be a listening organisation that acts on employees' feedback.
"During my time at IndiGo, the pilot attrition rate was 0.3 percent annualised...Our aircraft utilisation was among the highest...It is not a coincidence that good organisations far outstrip industry performance. There is a direct co-relation between happy employees and a great business. You need to respect each and every colleague around you. In the aviation business, everyone is equal and everyone just has a different role to play...Leaders have to walk in the shoes of employees," Ghosh added.
In an interesting revelation, Ghosh said he was approached by both Dube and Jhunjhunwala within a span of a few months.
"Vinay called me in August 2020…Vinay said it is going to be difficult…I told Vinay it is such a great idea…A few months later, got a call from Rakesh Jhunjhunwala," Ghosh said, adding that the deal was sealed within minutes as all three of them were on board.
"I was jumping with joy when Rakesh called me about Aditya...Felt like there is someone looking over me when heard about Aditya coming onboard," Dube said.
As the airline enters a crowded low-cost carrier space, Dube said that while they want to offer affordable fares, affordable is relative to what is being offered in the market.
"There is a difference between strategy and tactic…we have cost structure under control to a large extent but pricing and fares are very market-driven,” Dube added.
The airline has factored in the biggest headwind of steep fuel prices and intends to get the competitive edge on the back of fuel efficiency.
"My mentor and CEO at Delta airlines said many times hope is not a strategy. For us, we have chosen the world's most fuel-efficient plane. We also have the youngest fleet Hoping for lower fuel but have planned for higher fuel as well. My first spreadsheet in August 2020 had fuel at $40 per barrel..there is no static number in fuel planning. Focus is on getting a competitive advantage by being fuel-efficient," Dube added.
The airline has ordered 72 Boeing 737 MAX airplanes and hopes to get 18 of these by end of FY23. So far, one aircraft has been delivered. The airline also recently received its air operator certificate from the Directorate General of Civil Aviation.
"The current order book for India is extremely healthy. We have 72 aircraft orders from Akasa. SpiceJet is our major customer for 737MAX. We have a wide-body order from Vistara. Folks at Tata and Air India have also talked about placing a large order in the future…Supply chains are still emerging from covid slowdown. If we miss commitments, there are operational consequences for airlines so we are being cognizant of supply chain issues while giving delivery schedule," Salil Gupte, president of Boeing India said.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
