Ex-Lehman Trader Seeks Fix to Capitalism in Crowdfunded Airline

An Artist's Impression Of Pop Air

An artist's impression showing the livery of POP Airline.

Source: POP Airline
  • Briton to raise 8.5 million pounds; pledges profit to charity
  • ‘People Over Profit’ airline to link London with Indian cities

As a bond trader at Lehman Brothers Holdings Inc. and JPMorgan Chase & Co., Navdip Singh Judge worked for spreads and bonuses at temples of modern-day capitalism. Now, he says the global capitalist system is broken and he’s looking to mend it.

The Briton of Indian origin isn’t your typical aviation entrepreneur. With business executives the world over wondering about the economic impact of Brexit, Judge aims to start a crowdfunded budget carrier by raising 8.5 million pounds ($11 million) that will fly a single plane between London and some Indian cities. He has vowed to plow most of the profits into charity. The plan is to raise 3.5 million pounds from the public online, and 5 million pounds more from wealthy individuals using a U.K. tax-saving plan.

“I am not trying to reinvent any wheel or criticize anything,” Judge, who’s now at BGC Partners Inc., said in an interview. “The only thing I am doing is to modify capitalism -- that’s the inclusive part, where businesses support society and the planet.”

Judge, 51, has little history of a crowdfunded airline to draw inspiration from and airline industry’s past is riddled with failures, billions of dollars in losses and low profit margins. Legendary investor Warren Buffett famously swore off airline stocks after his $358 million “mistake” with US Airways Group Inc. in 1989.

Loyalty Benefits

Judge says his venture hasn’t yet managed to get the desired response since the two-month crowdfunding campaign was kicked off on June 1. He declined to reveal how much he has raised so far. Backers won’t get an equity stake, but will get loyalty benefits and upgrades. He has less than a month to achieve his goal.

“Many come to this industry and they have ideas,” said Harsh Vardhan, chairman of New Delhi-based Starair Consulting. “But only after you get the aircraft flying can you claim that you’ve set up an airline.”

While few crowdfunded airlines exist, India’s first non-state airport was set up with the help of several overseas Indians, who contributed their savings to help build the facility in Kochi.

People Over Profit

Judge’s carrier, to be named POP Airline for ‘People Over Profit,’ plans to start flying this year with a 378-seater Airbus Group SE A330 jet wet-leased from a U.K.-based airline operator.

An artist's impression showing the interior of a POP Airline aircraft.
An artist's impression showing the interior of a POP Airline aircraft.
Source: POP Airline

Under a wet lease agreement, a lessor typically supplies an aircraft, crew, and handles all maintenance and insurance costs. Judge says the lessor, in his case, would take care of landing and parking charges as well. A brand new A330-200 jet would cost $655,000 a month to lease, while it is $240,000 for a 20-year-old aircraft, according to data provided by FlightGlobal.

Judge plans to use 3.5 million pounds for startup capital and lock up 5 million pounds in safety escrow with regulators.

The ex-Lehman trader says he’d model his business after AirAsia X, the long-haul budget operation of AirAsia Bhd. AirAsia X has reported losses in the past three years.

Formula One

Judge says he got the idea for his own long-haul, low-cost airline when he worked with Tony Fernandes, AirAsia’s group CEO, on the Lotus Formula One racing team a few years ago. Fernandes declined to comment. The philanthropy idea came about at a charity event organized by BGC Partners, he says, adding it won’t be fair to compare his airline to legacy carriers that failed to cut costs and ran up a pile of debt.

As many as 17 airlines in India, the world’s fastest growing major aviation market, have shut down in the past two decades, while accumulated losses of operating airlines have reached 600 billion rupees ($8.9 billion), according to a June research paper by consultancy KPMG and trade body Associated Chambers of Commerce of India.

But, Judge isn’t discouraged by those failures. He also has plans to set up POP hotels following the launch of his airline.

POP Airline will provide non-stop services for as little as 350 pounds between London and Indian cities of Amritsar and Ahmedabad, which produce a large number of immigrants who work in the U.K., according to Judge. He is also offering a “gold pass” for 500 pounds, which will qualify fliers for free, upgraded tickets.

Terming his brand of business as “Seva Capitalism” -- Seva meaning selfless service in Sanskrit -- Judge says failure to invest profits back in communities is the reason the global economy has collapsed.

“The global inequality is actually toxic for the world,” he said. “Protesting, marching, criticizing -- none of that is going to work. The only way is to do it better and set an example.”

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