Mr Jhunjhunwala, who is considering investing US$35 million and would own 40 per cent of the carrier, expects to get a no-objection certificate from India's aviation ministry shortly, he told Bloomberg Television.
Akasa Air's management, he said will include a former senior executive of Delta Air Lines, and is looking at planes that can carry 180 passengers, he said.
'For the culture of a company to be frugal you've to start off fresh,' Mr Jhunjhunwala said. 'I'm very, very bullish on India's aviation sector in terms of demand.'
Even before the pandemic, airlines in India were struggling. Kingfisher Airlines, once the country's second-largest domestic carrier, ended operations in 2012, and Jet Airways, which was recently approved to fly again, collapsed in 2019.
While demand for air travel has been hit globally, India's aviation industry is at greater risk of delayed recovery as the threat of a third wave of infections looms. Airlines are feeling the impact.
Vistara, which Singapore Airlines jointly owns with conglomerate Tata Group, is in discussions with Boeing and Airbus to delay aircraft deliveries. IndiGo, India's largest airline, reported a wider-than-anticipated loss as Covid disruption crimped its revenue, said Bloomberg.