Indigo has shown in the six years since its inception that it is one smart company (the only profitable Indian airline). In an interview with ET, Rahul Bhatia, the cofounder, reveals a smart executive at the helm who not only gets his business, but is eloquent at verbalizing it too.
Below are some excerpted highlights for the long haul (discounting the political undercurrents of the moment). Businesses in different industries may glean a thing or two from his sharp insights.
“Our competition is from ground transport – buses and trains. IndiGo is built on creating a new market.”
“People who fly once a month now fly thrice a month because of great fares. People who never flew want to fly. That’s our market and that I think it has great opportunities. Our business is not to poach on other people’s businesses. It is not the way this company works.”
On a ‘decisive competitive edge’ based on operational excellence:
“Fly the airline on time. Experience on board should be very fresh and very clean. And the customer should get whatever is the service definition –from booking your tickets to collecting your bags. If we hang on to these three simple principles, people would like it.”
On the role of technology:
“We have a fully automated process, which doesn’t need human intervention and knows how much inventory we have. Flights get opened several months in advance and the machine decides how the inventory is to be sold the day it gets opened. As you get closer to the day of departure, the machine determines what the fares would be. The machine develops artificial intelligence over a period of time.”
On laser-sharp focus:
“We are looking at other things too. But we also have to be realistic about management bandwidth and obviously we can’t have businesses that have a long runway.”
On innovation anomalies in over-regulated markets:
“Allow companies to have opportunities to blossom. In the process, of course, some will make it and some won’t, but that’s life. Don’t constrain and constrict the industry.”
On asymmetric business models:
“It is not unknown that in certain geographies of the world, certain carriers deliver profitability all the time and some don’t… An airline may be getting several months worth of credit from a fuel company but that credit comes at a cost… I can show you results of airlines of the past few years and it doesn’t take rocket science to understand that the cost structure varies dramatically. When people say there is no cost difference, the math speaks for itself. ”
And finally, he truly nails it:
“Would you be like to be on time or would you like to be three hours late and have the nicest champagne or caviar on board?… Keep it simple, tight and consistent.”
Click on the link to go over to ET and read the entire interview for the full context of his comments. Highly recommended!
Contributed by Rukesh Patel