Indian Aviation Sector Going to Be Better

Aditya Ghosh, President and Executive Director of IndiGo, was interviewed at the NASSCOM India Leadership Forum 2013. He had plenty to say about how an airline should be run. The Flying Engineer felt every pilot should read the main points, because a boom can turn into a slump if an airline is not managed well. What follows is a summary of his views, grouped under the questions he was asked.

What IndiGo saw

Ghosh said that as most businesses grow and their industry matures, they drift away from the basics. Companies forget the difference between what the customer really needs and the long list of things the customer merely wants.

Do customers want glamour?

Customers want many things, he said, but they do not want to pay for them. The real task is to work out what the customer needs, what the customer will pay for, and then to deliver that again and again, very well. In his words, there was nothing uniquely different about IndiGo except its consistency.

Investing in technology

For a low cost airline that watches every rupee, big investments do not come naturally. The instinct is to save small amounts in many places. But Ghosh warned that penny pinching can be pound foolish. Because IndiGo knew from day one that it would receive 100 to 150 aircraft, it invested up front in anything that could scale and that had a clear effect on productivity.

India's Southwest Airlines?

Ghosh rejected the comparison as unfair to Southwest. He called Southwest an amazing airline and a legend that had been successful for 40 years.

What is wrong with Indian aviation

His diagnosis was blunt. Ego gets in the way of wisdom, people forget that cost is a major driver, and airlines lose focus on themselves. The industry, he said, must look within.

Is regulation the problem?

External problems exist everywhere, he said. A large part of the trouble is internal, because many airlines are simply not run as businesses.

Why so few airlines?

Ghosh argued that the number of airlines does not matter; the number of aircraft does. Fifty airlines with one aircraft each still add up to fifty aircraft. Six or seven sound, sustainable airlines with a hundred aircraft each would make a very different industry. He added that there should certainly be more competition.

Market outlook

He expected the sector to do better than in the previous couple of years. There was a lot of demand and not enough supply, which meant a large opportunity for airlines to grow. He was certain that the big growth and the big success stories would come from the low cost segment.

The consumer's point of view

Fares, he said, should absolutely come down. Airlines would have to do their part, and the government would have to do its part. The final cost of travel for the passenger must fall, because that is the only way the industry can grow.

The original post embedded a YouTube video of the interview. That video is no longer available in the archive.