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The Flying Engineer

Tag Archives: Tiger

SpiceJet’s new management appointments: The Tiger is roaring

09 Sunday Feb 2014

Posted by theflyingengineer in General Aviation Interest

≈ Leave a comment

Tags

Airways, CCO, COO, Investor, Kaneswaran, Kapoor, Sanjiv, Spicejet, Tiger

SGQ400tigerFor a country where the mainstream media is expected to sensationalise any and every news related to aviation, it comes as a surprise how the otherwise over-enthusiastic media has not been able to connect the dots in the recent developments at SpiceJet.

In November 2013, SpiceJet “appointed” Sanjiv Kapoor as its Chief Operations Officer (COO). Sanjiv Kapoor held the position of Senior Director, Temasek Holdings for 1yr 8 months. Temasek Holdings, directly and indirectly through Singapore Airlines has a significant stake in Tiger Airways, which operates as Tigerair.

Now, in February 2014, SpiceJet announced the “appointment” of Kaneswaran Avili as Chief Commercial Officer, effective April 1st 2014. Interestingly, the position he holds today is Director-Commercial at Tiger Airways, and has held that position since October 2012.

Men with very, very impressive resumes are being “appointed” by SpiceJet, a sure sign of good times to come. Interestingly, men related to Tiger Airways, in the past and the present, are joining Spicejet, which seems less of an “appointment” and more of an insert. In simple language: Tiger Airways seems to be actively reforming the airline with its own people before it can invest in SpiceJet.

The experience that the COO and the CCO bring seem to be complimentary: Sanjiv Kapoor has had experience only with full service, legacy carriers. That is great from the operational perspective. Although successful low cost airlines have been known for streamlined operations, the experience Sanjiv gained at leading airlines can help transform the way in which the SpiceJet brand is viewed today. Dirty seats, dirty airplanes, and unhappy services are on their way out.

Kaneswaran, on the other hand comes with a solid experience of 12 years not the “airline” industry, but the low cost airline Industry. He was part of the start up team of AirAsia in 2001, played a pivotal role in Air Asia’s expansion into neighbouring countries. He’s been associated with famous low cost brands: Air Asia, and Garuda Indonesia Citilink. Importantly, he was engaged by Viva Macau, Macau first LCC start up, where he was tasked with the responsibility for re-engineering the commercial unit and implementation of new commercial and network strategies to return the airline to route profitability. Recently, Kanesh completed a short but intense commercial transformation project for Citilink Indonesia. These responsibilities and experience are what SpiceJet can do with.

Sanjiv’s full service experience in operations and Kaneswaran’s rich low cost experience can, if well leveraged, make SpiceJet the preferred low cost airline: based on fares, and on service. Something that IndiGo is already known for.

 “His deep domain knowledge on airline commercial across sales & distribution, revenue management, marketing, network planning, airline system and market penetration strategy would be key in transforming SpiceJet commercial capability and improving overall route and airline profitability,” said Mr. Sanjiv Kapoor, Chief Operating Officer, SpiceJet Ltd.

Interestingly, Sanjiv Kapoor, more than a week ago, said, “SpiceJet is also demonstrating that you do not need foreign airlines to show India the power of low fares and market stimulation; we are just as capable of doing it ourselves, and are committed to creating multiple opportunities for as many Indians as possible to fly.” That ambiguous statement was clarified by SpiceJet as referring to “Air Asia’s constant claims that they will stimulate demand.”

And now we have on board the airline the very man who was part of the start up team of AirAsia.

Says Sanjiv Kapoor, “Kanesh’s joining is part of an ongoing refresh of SpiceJet’s management team, with further announcements to be made in the coming weeks”

Spicejet: What it did, what it must do, and the Tiger it may very well get into.

30 Monday Dec 2013

Posted by theflyingengineer in General Aviation Interest, Operations

≈ Leave a comment

Tags

Acquisition, Airways, Bain, Co, Customer, Experience, Factor, Indigo, Kapoor, Load, Merger, Offer, Profits, Sanjiv, Spicejet, Tiger, Tigerair

SGQ400

This piece has 3 parts: the first entirely factual, the second, Spicejet’s offer and what it should do to make itself more appealing (based on actual feedback), and the third: a focus on Spicejet, its COO, and its investor: is a part factual and part well informed yet speculative section.

The Big Sale left no great Tale.

In the 3 months of February, March and April 2012, Spicejet had flown 838,911 empty seats that made up 25% of the airline’s average seat capacity in that 3 month period. Based on the airline’s past performance and future growth projections, 25% in that 3 month period, in 2013, was to have translated to 987,644 seats. Make that 1,000,000 (10 lakh) for the arithmophobic.

That’s the exact number of tickets that were on sale, mid January, for an all inclusive fare of INR 2013, during the airline’s Big Sale offer, valid for travel during February, March and April, 2013.

The numbers made sense; everyone was convinced, and the figures added up to a promise. The load factors were expected to lean towards 100%, by roping in travellers who otherwise would have preferred the Indian Railways. It should have made perfect sense.

But it didn’t. In that 3 month period, the airline flew 900,733 empty seats, 7% more empty seats than those in the same period, in 2012. Capacity had grown 17%, demand grew 20%, but the average load factor had grown a dismal 2.8% to 77.3%.

But did it have the effect of siphoning off passengers from other players, including its biggest, true low cost competitor, IndiGo? In the same period, Feb-April 2013, IndiGo’s capacity grew 24%, demand grew 27%, and load factors increased, eerily, by the exact same amount as Spicejet’s: 2.8%, to 82.7%.

And yes, both airlines flew 900,000 empty seats each in that 3 month period.

Focusing on the consistent, business traveller.

It’s that time of the year, again, and Spicejet has a new offer: the Spicejet Corporate Flyer Offer, which offers to corporate companies 1 free one way ticket  for every 6 completed one way journeys and 2 free one way tickets for every 10 completed one way journeys, with applicable T&C. This year, until probably any other offer is introduced, the airline has shifted focus from the Aam Aadmi, and focused on Corporates.

Will it pay off? Maybe. But unlike targeting the rail-going population, the corporate traveller needs something more: good service. And from what we’ve been hearing, including from a top management guy from one of the world’s largest manufacturers of computers, with a strong India presence, the service needs a makeover.

Agreed, India is a price sensitive market, but it’s  not always the fares and offers that attracts a passenger: promise must be met with delivery. Because everyone remembers the bad and not the good. And an airline wouldn’t want to risk that, if one of its passengers is a decision maker at a big, big company.

Pilot in Command: Sanjiv Kapoor

This small, yet deepened focus on the corporate traveller may be one of the changes brought about by the Sanjiv Kapoor guided airline. Sanjiv Kapoor, interestingly, was employed by Bain & Co for over 5 years, the last position that of a Principle. His profile spanned strategy, turn around, alliances, network planning, revenue enhancement, procurement, post-merger integration, and customer experience transformation.

His absorption into the company is very interesting. Customer Experience can do way, way better in the airline, and hopefully, he’s here to deliver. Alliances: he’s already entered Spicejet into an interline agreement with Tigerair.

And the most interesting part is here: procurement, and post-merger integration. Very surprisingly, Sanjiv appointed consulting Bain and Co. to restructure the airline’s network and return it to profitability. Sanjiv also held the position of Senior Director, Temasek Holdings for 1yr 8 months. Temasek Holdings, directly and indirectly through Singapore Airlines has a significant stake in Tiger Airways, which operates as Tigerair.

Some wonder if Spicejet hired Sanjiv, or Tigerair placed Sanjiv in Spicejet. The quarterly loss of Spicejet is eerily similar to that of Indonesian carrier Mandala Airlines, which was grounded in 2011, for a year, following debt related issues. The airline took to the skies again, reborn as Tigerair Mandala.

The winds point to Tigerair investing in the Indian low cost airline. The winds are strong and steady, and the dawn of 2014 will show us the airline and its investor, striped or not.

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