“Fly As You Are” – The 737-8 in AIX livery, new visual identity and heritage textile tailfin design
Manisha Singhal
There was a vibe and it was the right one!
The rebranding and livery unveiling of Tata Group’s low cost carrier Air India Express in Mumbai on October 18th not only put the airline as the lead ship in the integration process of airlines within Tata fold but also re-positioned the carrier away from low cost tag to a ‘high value carrier’ and a modern tagline of ‘New India’s smart connector.’
Rebranding is another step closer to merging Air India Express and AirAsia India, as the latter is sunsetted and will cease to be a separate legal entity soon. The integration process is most likely to be completed by the end of March next year. The two airlines will operate under single Air Operator Certificate and a common schedule for summer flights likely to be submitted.
With this merger complete, Air India Express is looking at an aggressive fleet and network expansion plan for both domestic and international markets. It aims almost doubling its fleet by inducting 50 aircraft over the next 15 months thereby consolidating and creating a formidable low cost airline of the Tata Group in a market where IndiGo’s position has largely gone unchallenged with over 60 % market share.
Air India Express though steers clear of commenting on the largest player as its competition, one of its executives said, “not competing with IndiGo as we are not a low cost carrier, but a high value carrier.” Air India Express operates 700 flights per week and with AirAsia India it flies to over 40 destinations domestic and international. IndiGo operates nearly 1900 flights daily connecting 84 domestic destinations and 32 in international. Air India Express does have its work cut out.
The merger gives Tatas an opportunity for a renewed push to their low cost offering with unbundling of fares, hot meals on board with seamless connectivity, strength it feels is a better product offering and differentiator as many budget carriers are pruning services and offerings.
With the induction of two of the 50 737-8 aircraft into the fleet now and more to join , the airline will be able to target markets that are within seven hours of flying distance from India and look to expand in the southeast Asian markets, CIS countries, Middle East apart from the India – Gulf route where Air India Express enjoys leadership position .
As the airline build its network and adds aircraft with an aim of taking its fleet size to 170 over the next five years, it might look at a hub, “it’s a possibility going forward,” an executive said. Air India Express looks at focusing more on connectivity between Tier 2 and Tier 3 cities as it expands in the domestic market.
planestalkstravels.com caught up with Aloke Singh, Managing Director, Air India Express, on the sidelines of the event for his take on rebranding, how they have succeeded to pull off a merger without culture issues as a road block and its network expansion plans. Excerpts.
“We got the rebranding right,” Aloke Singh, Managing Director, Air India Express.
Q: Did you get the rebranding of Air India Express Right?
Absolutely, we have got it right. It’s a good mix of what we already have because one cannot suddenly change your branding and take a 360° turn. There has to be some familiarity with the old brand which is very much there. It is really refreshed. It is modernised and it is contemporary.
Q : By when is the merger likely to get completed?
The integration process with AirAsia is fairly advanced. We are now heading into a full legal merger. The process usually takes 6 to 9 months (from the date of filing of application) our application is filed. We are anticipating that to happen by the end of the financial year.
Q: Then rest of other processes entailing this merger on way to getting completed ?
What we have done is that we had started the integration program much in advance and all the back end systems and processes platforms, bulk of it is already in place covering a common website, common call centre and all other things. The leadership team is common. The organisation has been mapped. All pieces are in place. As soon as the legal merger happens, we are good to go. On that front, we are fairly good.
Q: How did Air India Express and AirAsia India crease out culture challengers and leadership issues as two separate organisations without substantial roadblocks?
The culture issue is really important and the way we have addressed it is that we brought it up front. We tackled this in many ways before we started the integration roadmap. We identified some 50 or 60 individual workstreams that were required for integrating the two organisations and the processes and put together teams which comprised of people from both the entities. We had one stakeholder each from AirAsia (India) and from Express so we actually worked together and that helped a lot. It broke the ice and then the teams started working together. And then when we announced the common leadership team rest of the things started falling in place. The leadership is common except for the regulatory part. The regulatory post holders continue to be separate because the legal entity is separate but other than that the organisation is aligned. All the other pieces are in place.
Q: What will the combined network look like?
In the initial period in the network development, we would be looking more towards the Tier 2 and Tier 3 cities. These are markets that we understand much better and also the nature of the market is more suited to our business model. So while in India we will focus on hub to hub, we will also look at the value segment, the leisure market, the VFR. But will still crossfeed and collaborate with Air India .
Its ugly in the courts between Akasa and its pilots. A year into operations, the airline has antagonized its pilots, aviation regulator and fliers. Has Akasa failed to live up to its promise of a ‘different’ airline? Or is Akasa just a symptom of the bigger malice plaguing Indian aviation? It’s a different market reality of duopoly with bigger players flexing muscles – will Akasa clear this turbulence? Read here.
“Money is not everything. Akasa is fooling itself if it thinks it’s about money pilots are going after and leaving. Pilots are leaving because there is no respect, promises not kept, no redressal mechanism and nobody bothers to listen. This airline has become a hub of favoritism and nepotism.”
This is just one of the pilots I quote here from the young airline Akasa. But the sentiment is echoed by a lot many of its pilots – some who left and some on way out.
It’s rather stark as till about a couple of months back Akasa was the blue-eyed boy of Indian Aviation and Vinay Dube, its Founder and CEO was sitting pretty with a dream take off. It created global aviation history as first airline to scale its fleet to 20 aircraft within first year of operations and a market share of 4.8% from 0.2%.
Didn’t Akasa come with a pedigree , a marquee promoter in investor Rakesh Jhunjhunwala and some of the best names in aviation industry like Aditya Ghosh, its Co-Founder? It seemed to have cracked that magic code that Indian aviation craved for long of keeping fliers, employees and stakeholders happy, all at the same time.
But, today, barely a year into operations, that dream run is turning into a nightmare. Akasa’s part of sky has turned turbulent rather early. What is unfolding in the Akasa story has three parts :
Pilot Strife : The ongoing court battle between Akasa and its pilots . Nearly 50 of Akasa pilots left. Airline claims without serving the mandatory six months’ notice period. It has sued its pilots for loss of revenue, reputation and inconvenience to passengers.
Roping in the regulator: The attempt by the airline to make pilots’ quitting Akasa without serving notice period as an industry issue. Tries lobbying with aviation regulator and aviation minister for support in penalising errant pilots. It did express dissatisfaction in the court for not getting adequate support from the regulator.
Aviation landscape: An evolving aviation landscape where duopoly is a certainty and bigger players are flexing their muscle , smaller ones being squeezed and fighting for the same pool of manpower resources, specifically pilots that are in short supply in India.
Pilot strife
Ripples of what is a legal battle today were there much before Akasa was to complete a year of operations on August 7.
A section of its pilots felt may be the idea of a ‘different’ and ‘employee-centric’ airline sold by Akasa management was nothing but mendacious and they were dealt a rotten hand. A few were deciding to quit, waiting for an opportunity.
When I interviewed Dube in the month of July (Planes.Talks.Travels – Unplugged: Vinay Dube The Interview), I asked him why Akasa’s pilots are feeling the way they are? And why some feel ,“the middle-management of the airline has failed to address their issues. There is favoritism. They are flying much more or the first officer’s flying less than contracted. Its weeks before they get to be with their families.”
The pilots had base choice issues, their flight meals were not up to satisfaction, they felt flight operations and other management pilots from the erstwhile Jet Airways weren’t playing fair.
A dismissive Dube then said, Akasa has the best aviation talent in its middle management and that he is approachable. Assumption being pilots are crying wolf.
Apparently not. Akasa’s pilots aborted a dream take-off.
Nearly fifty of its pilots handed over their resignations when the opportunity presented itself , reportedly with a rival Tata Group airline scouting the market for Boeing pilots. It has aggressive expansion plans and disgruntled Akasa pilots were there for a taking.
Unavailability of pilots to operate flights forced the airline to cancel and reschedule flights, fliers were irate slamming the airline for cancellations and for rescheduling flights.
In August , Akasa had to cancel nearly 700 of its flights. September average is 24 cancellations per day. If this continues till the month end, Akasa’s revenue loss for the two-month period will be near about Rs 96 crore.
The above figure based on assumption presented by Akasa in the court stating each of Akasa flight earns a revenue of Rs 6,80,400 per flight on 90% seat occupancy. It’s operating loss for the first year is Rs 602 crore.
Akasa’s healthily growing market share slid to 4.2% in August down from 5.2% in the month of July and Akasa had to cede the market position to another low-cost carrier SpiceJet, it settled for the sixth spot in a market where there are eight major airlines.
A singed airline assessing the number of cancellations it was staring at August onwards, decided the issue needs to be nipped in the bud and it’s pay up time for its pilots. The year-old airline chose to go legal.
Akasa math is simple, it seeks Rs 0.3 crore under training agreement, loss of operational profit of 7 crore, reputational loss of 14.3 crore, totaling to Rs 21.6 crore that each of its six pilots need to compensate the airline for. In its filing it also names 43 other pilots in exit mode to be subjected to same legal recourse.
The narrative thus changed for Akasa and its positioning of being an employee-centric airline with work-life balance as a corner stone of its employee philosophy is on a shaky ground.
The pilots on the other hand seem unfazed, they aryet to file their response in the court. But the fraternity largely agrees that contractual validity is when both sides keep their part of the bargain. They feel that their salary structure and flying hours have been unilaterally changed by the airline, thus the obligation to adhere to the notice period does not hold ground.
Aviation Regulator and Ministry of Civil Aviation:
As per information with me , Akasa , in the court filing has submitted two letters dated August 3 and August 18 addressed to the DGCA, that is the aviation regulator, and Minister Civil Aviation, Jyotiraditya Scinida as exhibits.
In the letter addressed to the DGCA the airline puts its case forth, “Request to take strict penal action against certain pilots and first officers under Rule 39A(2) of the Aircraft Rules, 1937 for violation of ‘Civil Aviation Requirement’ or CAR dated 16 August 2017 and terms of their employment agreements.”
This letter details abrupt pilot resignations which the airline had apprised the regulator in a personal meeting before writing the mail. The airline met Secretary Civil Aviation and the minister too for discussion of the issue on August 17. The letter to the minister mentions clearly that CAR empowers the Indian regulator to suspend/debar errant pilots on failure to adhere to the notice period of six months.
“The problem of pilots resigning without any prior notice to the airline is not new and has been lingering for decades. In the past, several other airlines also faced this issue where pilots quit their jobs overnight and joined airlines abroad. This reckless practice by the pilots deeply hurts the Indian aviation industry and public interest.” Akasa wrote to the minister.
But the airline lobbying to get the regulator and the ministry on its side on the issue did not cut ice . Truth be told neither the airlines nor the pilots or the regulator has dealt with this issue with any seriousness and if the precedents are anything to go by status -quo has been maintained.
The amended Civil Aviation Regulation, 2017, did fix the notice period between 6-12 months depending upon the experience of the pilot. At the time when the government was taking opinion of the stakeholders, that is the airlines , aviation company heads were divided over the six-month period enforcement. At that time newer airlines like Air Asia India, sources say, wanted the notice period to be three months, as in other jobs.
It is understood that bigger carriers, wanting to expand fast, opposed this and maintained that it needs to be six months as pilots are skilled resources and replacing them in three months is difficult. And that is where the amended CAR stands today.
But even for the stipulated notice period, enforcement lacks teeth as the regulator leaves it as a matter between the employee and the employer. And pilots contest this long notice period, more so when their service conditions or salary contracts have been unilaterally altered by the airlines.
Within the context given above, the regulator and the ministry refused to come to Akasa’s rescue or side up with the airline and get muddled with the issue which it felt is strictly between the airline and its pilots. It maintained Akasa has not been able to share sufficient and satisfactory data on flight cancellations due to pilot resignations with the regulatory authority so there isn’t any need for intervention.
DGCA said it is bound by pervious matters to not action upon pilots’ grievances , unless specifically directed by the court. Akasa was trying to turn this tussle, change of power equation between the airline and the pilots in its favour but it played out differently for the airline and definitely Akasa finds itself isolated and saddled with a massive setback.
The DGCA, on above grounds, argued in the court that Akasa’s plea need to be dismissed.
To be fair, pilots leaving an airline without completing their notice period and throwing schedules haywire, in some cases bringing the airline down on its knees, does merit a serious re-think and a resolution by the industry players and pilots.
But Akasa wasn’t talking of the industry issue, it tried to dovetail its own pilot challenge with the industry issue.
Duopoly and short supply of pilots:
Every growing or new airline in Indian aviation right from the 1990s when government allowed private players to start air operations has poached pilots and tried that pilots join without completion of notice period on any pretext.
It was early 1990s. An airline promoter was addressing a clutch of disgruntled pilots threatening to join rival airline for better pay and few more perks. “You are my diamonds, very precious, I will always keep you close to my heart,” said the promoter as he begged pilots to stay.
This issue became a survival threat to the industry 2010 onwards as Captains were hired by expanding foreign and Gulf carriers. The ‘exodus’ of pilots from India then forced airlines to either poach or hire expensive expat pilots to operate different aircraft types.
In fact, Akasa in its court filing refers to this exodus of pilots as an example and therefore a need to enforce notice period strictly.
Fact is India wasn’t licensing enough pilots then and it’s not doing so now even after more than a decade has lapsed. India is third – largest aviation market in the world today and Indian carriers have a large order book with nearly 1,500 aircraft on order and deliveries planned till 2030. Part of these deliveries will start from 2024 onwards .
The data in public domain puts number of pilots in the country today to 9000. India will need almost double this number in the coming years but the regulator issues not more than 600 or so commercial pilot licences per year .
Hemanth DP, CEO, Asia Pacific Flight Training Academy points out to a near emergency situation when he says that in the coming years, “India will need 150% more pilots than it currently has.” He also points out to issues like shortage of simulators or the availability of slots aboard for pilots to train, derailing training and thereby pilots coming into system .
Add to this the fact that DGCA itself is grappling with shortage of competent manpower to fill its vacant positions thereby increasing pendency time for issuance of commercial pilot licences.
Also, duopoly – dominance of two large airlines, low cost carrier IndiGo and four Tata Group Airlines – is more or less an established fact of Indian aviation. Between them they share nearly 85% of the domestic Indian market . They have multibillion-dollar aircraft deals, totaling to more than 1400 aircraft between them. Both have backing of big business houses and financial muscle.
With IndiGo on an aggressive expansion mode the race is likely to be fueled further as Air India tries expanding in domestic and international market as a catch up.
This development is essentially skewed against smaller players like Akasa who are trying to shore up market share and, in this case, pilots reportedly joined rival carrier. As big brothers try dwarf other airlines, young airlines will face the heat and the might as the pool of manpower resources, specifically pilots likely to remain constrained.
It’s a worrying development and also unhealthy for a market which is growing exponentially and needs more connectivity and certainly more players. Indians are taking to the skies like never before, an estimated 145 million passengers are travellin annually within the country and half as much to international destinations.
Way forward for Akasa:
Sources at Akasa say they had a successful roadshow for hiring pilots and Akasa offered joining bonuses, yet again. This is probably the fourth roadshow Akasa held for hiring pilots within a year of its operations. The airline maintains it currently has 400 pilots, sufficient to fly its fleet of 20 (planes go on rotational configuration change for uniformity so not all 20 might operate).
Putting up a bravefreont the airline sources say this issue is behind them. “We are looking forward to go international.” The airline got regulatory approval to launch international operations last week and had planned to fly international by year-end.
It’s in midst of a fund-raise with reports suggesting the airline is tapping the market to raise $400 million and the Jhunjhunwala family likely to dilute stake. It also is caught on the wrong side of supply-chain challenges and its deliveries might not flow as expected. Akasa planned adding an aircraft every month to its fleet with a waiting in wings three-digit aircraft order that it alluded to during the Paris Air Show in June this year.
It can hope that either the pilots who have completed type-rating for Boeing aircraft can fly with them soon or as Dube said, Akasa will curtail certain flights, operate a curtailed schedule till things come back on track.
As of now, Akasa seems to be the lone wolf fighting a battle which it might have do a rethink about . It’s a ‘walk through fire moment’ for the airline. The pilots might fly out of this turbulence. But has Akasa lost on the trust and goodwill that it hunted for?
Vinod Kannan , CEO, Vistara : The Man in The Middle of It All
‘Everyone is worried about the wedding, should be worried about the marriage’
(On Vistara and Air India merger)
Vinod Kannan, CEO, Vistara
BY Manisha Singhal
Defiant with a triumphant smile, sleeves rolled up too – all at the same time. Vinod Kannan, CEO, Vistara, is not exactly spoilt for choice. On one end awards and milestones that Vistara is bagging are celebrated, on the other, a niche and loved brand of eight years is being prepped for a merger with Air India. The government owned airline that Tatas acquired last year is receiving more brickbats than bouquets from the fliers as it revamps. Tatas and Singapore Airlines are common shareholders. B
“Netflix is merging with Doordarshan (public service broadcaster),” is the office banter as single combined airline entity goal pursued by the Tatas entails scrapping brand Vistara (after approval from regulators) and merging employees of legacy carrier like Air India with a more vibrant and younger airline that is Vistara. Standard operating procedures, processes and people are the biggest challenge of this integration as Vistara is expected to prop up Air India’s game.
Vinod Kannan is the man in the middle of it all. “We are not done and dusted, yet,” he quips as he settles down for a media round table at Gateway Room (Taj Colaba, Mumbai) overlooking the Arabian Sea. He is much more relaxed and forthcoming than in his previous interactions. Signs of stress that this mammoth exercise involves aren’t too visible. Vistara will continue to expand international operations, add more flights and get the aircraft as planned, he said.
Merger per se is not a worry but compatibility of the two entities and longevity of the enterprise is the challenging part, ‘Everyone is worried about the wedding, you should be worried about the marriage,’ he said. And perhaps that’s the nub of it all.
In a freewheeling chat, Kannan speaks in depth about his thoughts on the merger, about his India experience, Vistara’s hurrah moments, his role in the combined entity and managing his people and teams before the merger . Edited Excerpts.
Q: Are you ready to marry Vistara off?
Ans: To a certain extent it’s a wedding yes and as one of my board members said, ‘Everyone’s worried about the wedding, you should be worried about the marriage because it’s not the one day but everything that happens beyond.’ So, I hope the marriage lasts forever. But from our perspective, whether we like it or not, Vistara doesn’t belong to us, although we have built it. We have a strong view on Vistara and ownership of Vistara emotionally, but ultimately, it’s the shareholders who have to decide and they have decided. I am immensely proud of my staff – all 5,500 of them – for not giving up. And despite all the distractions we have, they will still make Vistara the airline of India.
And one will never be hundred percent ready because there will always be emotions attached. But till we are here we will continue to fly high. We will make sure that we will create a brand that others can emulate including the integrated entity.
Q: When you joined from Singapore Airlines (from low cost subsidiary Scoot) and came to India (2019) what were your thoughts?
Ans: When I came into Vistara, I was looking for excitement because at that time Jet (private airline Jet Airways) has just gone down and Leslie (Leslie Thng, Vistara’s second CEO who Kannan succeeded) was there. I came to see how we can help expand internationally. I thought it’s challenging. It’s India and I am Indian of course, so it makes things easier. But then I realised that working for Singapore Airlines in India, which I am from, is very different when you’re working in an Indian company. In the end the difference is made by the people and I got excellent set of people
Q: So, you say its different working for Singapore Airlines in India. Singapore is small but evolved aviation market and a very different corporate culture . So, was it a contrast?
Ans: Vistara may not be an ideal benchmark. Yes, it is an Indian airline and it is an Indian company but it is still 49% held by Singapore airlines. A lot of people who started this airline were from Singapore Airlines. Many of the processes and the way things are done are similar as Singapore Airlines does things.
Having said that working in India is never short of excitement. There are always things that are happening around every corner. Back in Singapore there is so much of structure. SQ is very mature airline because it’s been around for 70+ years. When you want something to get done, there is always an SOP and you follow it.
Whereas when you are starting something, not just in India, lot of things are being built on the flight, for example, nobody expected us to take the deliveries of the 737 (Boeing single aisle aircraft) on a short term lease when Jet went down. Nobody expected that we will take a short term lease of the 787 (Dreamliner, Boeing). Perhaps, to be very honest and to give credit to the regulator (DGCA), everyone supported us which may not happen in some other countries including Singapore with the same speed.
So there are positives but yes, it is not as organised or as set or cast because probably it’s not as mature. That is also part of the excitement as it gives you a chance to set the agenda.
Vistara Celebrates the landmark milestone of crossing 50 million customers
Q: At some level, post-merger, don’t you think fliers and Vistara employees might feel cheated? After creating a good full-service brand merge with Air India with huge legacy issues?
Ans: I look at it more as a compliment because they (at Air India) look Vistara as a role model for the bigger entity and which is going to be much bigger after this merger. Whether one likes it or not airlines need scale. Very honestly, as Vistara I would not be able to get a 470 aircraft order. So given that it is the same shareholders and the confidence that they are banking upon is also because of what we have achieved as Vistara. Its already a feather in our cap. We’ll try our best to make sure that everybody is aligned and we will make and bring the new airline up to the same standard.
Q: What was the exciting part at Vistara ?
Ans : We are not done and dusted yet….
Q: Of course! Yes, but how has it been at the helm and different phases of Vistara?
Ans : Since I took over as the CEO in January 2022 ( Kannan joined Vistara in 2019 as Chief Strategy Officer) it has been a rollercoaster. We had the third wave (COVID). We had lots of complaints because we had to cancel flights, sorted that out. Since then things have been positive. We hit a billion in sales , we hit 10% market share, we are now the second biggest airline, we won awards. There are a lot of positives.
I think the biggest achievement for me were all those projects, including Haj, which we did for the first time and we didn’t know how to do it, whole team rallied together. And the people is what makes a difference.
Q: So, what are you telling your people now? People are the toughest part of any merger.
Ans: So, this is not a merger for cost cutting. It’s a merger to grow. The first thing I said and I say it at every opportunity, there is no need to worry about your jobs because there is a job waiting for you. May not be exactly what you are doing (with Vistara) because it (merged entity) will be a much bigger airline. So it will be a smaller portion of what you doing but there’s definitely a role for you.
In fact, there is a role because they count on people in Vistara to bring up the level so that is the assurance that I have given to everyone. Second thing is it doesn’t mean that we are done and dusted, there is still a race to go. The approvals have not still come in and even if the approvals come in we will still be independent for another eight to 12 months. We will still have aircraft coming in. Therefore we have a certain pride and a social responsibility to not let the brand languish, that is something that my team is taken up very positively and I am very proud of it
Q: How difficult is it to keep employees motivated ? Isn’t there a certain laxity that creeps in?
Ans: So thankfully, it hasn’t happened like that. A lot of it goes with the tone that is being set by the leadership team. We are very clear and committed that we will celebrate little victories. We will make sure that we put our heart and soul in everything that we do, lot of the projects are still going on. We haven’t cut back and said we’ll stop things as there is a merger coming up. We had a great set up with the screens at all airports for celebrating 50 million passengers which came out very well. There are a lot of things for our customers as well as staff to be very positive about. And we will continue to do it. I think morale is a big thing. Mindset is a big thing but what people want to do apart from roles and money remuneration is dignity of labour want to have meaning in what you do and I am here to make sure that we give that meaning
Q: Is this merger a milestone in your career?
Ans: In any career mergers are always tough. In today’s day and age it’s not that something exceptional, mergers happen in every industry. But the biggest element of the merger, as you rightly pointed out is the people and how the people deal with it and how you bring the people along. I think that for me is going to be a challenge and hopefully if it comes out well, it will be a good achievement.
Q: What about your role in the merged entity? Are you looking at a bigger play at Air India?
Ans: I am neutral. It depends on what role I get , what role I am offered. It also depends on my shareholders Singapore Airlines because I am seconded to Singapore Airlines. I am more than open to it but we will wait and see what is in store.
Q: The hurrah moment for you?
Ans: Operationally breaking even (October-December 2022) was a big deal. Then Skytrax top 20 airlines list (only Indian airline in top 20, Vistara was 16th) which was a big deal. I think those two were big moments.
Team Vistara Celebrates World Airline Awards 2023 Skytrax
Q: When do you think India will get to the stage where it is a mature aviation market, as we see the airline industries globally?
Ans: A mature market is one where different businesses and models can survive independently. And a lot depends to a certain extent on the customer profile. Right now whether you like it or not the fact is that 80 to 90% of the people are still price shoppers and they are still looking for the cheapest fare. The value segment is not as big as what it should be and that is one maturity level and that probably will come in the next four to five years, as the economy improves further.
Second one is infrastructure and I think there is a lot of investment on that front. Many airports have come up and more are coming up so.
And the third is, I think the airline themselves. There is famous saying by an American airline head that says, ‘you are only as good as the most stupid airline cause it’s going to be a race down to the bottom as everyone wants to sell cheap.’ That maturity is definitely not there, at least at this time and you see price wars. So that will take some time as well. Hopefully, as the market is consolidating a bit it will get better but that will also take a few years.
“Akasa is bringing Asia’s first 737 – 8-200 to India this month”
BY: Manisha Singhal
He might want Akasa Air to be a magic airline – one that offers almost everything to everybody. Perhaps a tad bit ambitious in the world of aviation more so in India where airlines fall off the radar every few years.
But Vinay Dube, CEO Akasa Air, can’t be faulted for wanting a bigger slice of the sky as Akasa within 11 months of its launch has added 19 aircraft to its fleet and with a near five per cent market share has nudged bigger and older players to be the third largest in fastest growing Indian aviation market (after IndiGo and Tata Group Airlines in June) and carried 6.2 lakh domestic passengers.
Waiting to welcome the 20th aircraft , a 737- 8-200 (can have up to 200 seats and better economy), mandatory fleet size that allows an airline to fly international in India, Dube talks of what fliers can expect as they fly international on Akasa, how being employee–centric is non-negotiable and why Akasa aspires to be an airline that wants to connect with the vast majority of young Indian fliers (65% are 35 years and younger). These fliers not only look for experiences but have a different and conscientious outlook towards travel that matches Akasa’s corporate philosophy.
In an interview with me, he talks about how Akasa is positioned to be an airline for the generations to fly. Edited Excerpts.
Q:On August 7, Akasa Air, India’s youngest airline will complete a year of commercial operations. The hurrahs and the disappointments.
Ans: Over all extremely pleased. We had set our sights up to delivery of 18 aircraft by March of 2023. We delivered 19. Our 20th aircraft is just around the corner. So I think from where we are now, we would earlier talk in months, then we started talking in weeks, and now we are talking in days before it will be in our possession and hopefully touch the shores of India in the month of July.
And so I’d say very pleased with the fact that we’ve been able to execute a growth that no airline in the 120 year history of Global Aviation has ever done.
More importantly, with this growth, we’re pleased that the sanctity and reliability of the operation has been of the highest standard. So I think in June we closed, may be four consecutive months or three consecutive months of being India’s most on time airline.
Q: You have always spoken about Akasa being an airline not to be typified or boxed into any existing categories, carve out its own positioning, be the best in business. Have you been able to achieve that – with regard to employees and the brand offering?
Ans: We are very pleased with the response we’ve had from an employee perspective. You know, we’ve got 3000 employees and we have ventured to create this employee centric corporate culture. It was very important for us to, as an example, to have gender neutral uniforms where flight attendants were comfortable. We set out on this venture where we create an extremely diverse airline. We set out to create an airline that was very environmentally friendly and probably we are one of the most environmentally friendly airlines in the world.
And it’s not just the fact that we have new airplanes which are fuel efficient and new fleet, but our flight attendant uniforms are made out of recycled marine waste. The carpets are made out of recycled fishing nets, the fabric used for the seats and the packaging all contribute.
I would say if you want me to reflect back on the last year, it’s just with pride as we reflect back in terms of what this team has been able to accomplish. I say team because genuinely we’ve got an amazing bunch of people that have decided to come together to put this airline and take this forward and I couldn’t be prouder.
Q: But there were hiccups- The USB port issue? The fliers expected them to be there on each Akasa plane/seat? That was something they were looking forward to and supply side issue or vendor issues is not something they understand. What do you have to say to that?
Ans: So Manisha, first thing I’d say is we don’t want at this point in time, people coming into Akasa expecting a USB port. We’ve not advertised it that way.
Q: Ok. But somehow it got conveyed that way…
Ans: To be honest, if you go back and look at what we have said, we have been very forthright in saying that we don’t have USB ports on every aircraft and we will not have that for some period of time. We are on a route to having that. But as of today, we don’t.
And the reason as of today, we don’t is because you know of supply chain constraints where we haven’t been able to source these USB ports to put that’s also the reason why today you see some Akasa aircraft with larger seats up front. So we hope we’ve been extremely transparent in any conversation that we have in any opportunity that we have.
I don’t believe you are going to see or you can go back and look at the last six months to see if you can find one advertisement from Akasa that says we have USB port in every seat. That’s not our style.That’s not our value system, and that’s not the expectations we want to set.
So my view is it shouldn’t be seen as something to rectify. It should be seen as something to expect in the future. On newer aircraft that will start coming and delivering from next year onwards, we’ll have larger overhead bins that which would make it easier for our travellers. We think we’ve actually sort of changed what Flyers should expect on board a flight in India. We expect to deliver reliability of operation, on time performance, our pet policy those are the things that we advertise. Those are the things that we push. USB is not one of them. Not today. At some point , once we have consistently, then we will go and talk about it.
Q: You have a 76 aircraft order with Boeing for the 737MAX. You see an impact on Akasa’s expansion plan due to persistent issues with the aircraft?
Ans: Manisha, you know we said we’d get 18 aircraft, we got 19. We said we’d get our 20th aircraft. Now we’re getting our 20th aircraft. We said by the end of fiscal year we’ll have about 26 or 27 aircraft. That’s still on track. We said we’re gonna deliver, you know, 12 to 15 aircraft every year beyond that, that’s still on track. So I can tell you that we don’t see an impact at a Akasa
Q: Also, when do you expect the 737 – 8-200 hundred to be there in your fleet?
Ans: Well, if you stay tuned within 12 days, we should welcome the first 737 – 8- 200 into India.
Q: A section of crew that I spoke to – both cockpit as well as the cabin felt they are overworked and fatigued. Also there is a view that Vinay has always spoken about work-life-balance but somewhere down the line that ideal is not getting conveyed. Your comment?
Ans: So first, obviously I cannot address anything that’s hearsay of you spoke to somebody and somebody told you something. That’s not the way either me or anybody else would really operate and be able to address.
Let me try and address this question a completely different way. We are an airline that delivers 20 aircraft within 12 months from the start of commercial operation, which no other airline in the 120 year history of Aviation has been able to accomplish. In fact, we don’t believe anyone has been able to accomplish it, right? So when you talk about us delivering that, I can assure you that doesn’t happen because you got one Vinay Dube or, you know, two Vinay Dubes or a management team.
That happens because you’ve got execution excellence across the entire airline. This is not the type of industry that works because one person does something, or someone else does something. This works because you’ve got, you know, a vision that’s being translated down the line at a very, very detailed level. Think about the kind of planning it takes to hire 3000 people in this period of time to train them and get them up and running on the line.
So, to your question of, you know, a middle management, I’d say we’ve exceptional middle management, we got exceptional senior management, we’ve got exceptional junior management and we’ve got exceptional employees as a whole, pilots, flight attendants. So that’s the way I would address your question that I couldn’t be prouder that is an airline as a unit. We have been able to achieve what no one has been able to by a long margin.
And if any employee group has any issues they are welcome to raise it . And when they raise it, we will address it. Employee centricity is an absolute pillar. it is non-negotiable. And work life balance is the foundation of the airline on which the airline was built. Absolutely no question of wavering an iota from that.
Q: And so Akasa has no manpower issues that will impact expansion more so when the 737- 8-200 joins the fleet which requires more number of crew ?
Ans: We’re planning for multiple years from now. Literally a decade from now is what our planning is. And part of that planning entails the fact that there are going to be ups and downs. You have to plan for that. And so we have plenty of crew, you don’t have to take my word for it. You should go back and listen to what I said one year ago in terms of how many aircraft will be flying, when, and then you should match it to the number of aircraft we’re actually flying. And obviously, if we had a constraint, we won’t be able to do that.
Let me be unequivocal to say that we don’t have constraints, you know, in terms of flying our aircraft and we’re very much on track with our plan.
Q: As network development strategy are you moving away from the initially stated policy of connecting Tier2 to metros to more of metro-to-metro connectivity?
Ans : So let me go back and reiterate what we said in terms of our network development, we said always that we were focused on building a network that served the metros and Tier 2 cities, right? We also said in the same breath that this inevitably will mean some amount of metro to metro flight. You can’t create this network that doesn’t connect to metros because because of the technicality of the rotation of the aircraft, right?
So for example, we’ve increased our frequencies from one to three on Mumbai – Delhi.
So someone may say you’re in this metro to metro market, but look at what we’ve done from Mumbai to Guwhati, Mumbai to a Bagdogra, we have added Mumbai to Ahmedabad, Lucknow, Varansi we have added one more frequency.
So you know, one shouldn’t just say how they’ve gone from one to three on Mumbai – Delhi. One has to look at every aspect of the network and as you look at every aspect of the network, we very much on the lines of what we said earlier which is that connectivity between Tier 2 cities inevitably will be executed through some amount of metro to metro flying as well.
Q: What does the international expansion plan look like? Year end launch on track?
Ans: We are, we are. Our 20th aircraft will be here.That’s the magic number.By the end of the year we get 21 and 22 onwards as well.Very exciting.And then you know, some of the discussions that require the 20th aircraft to be here will start in earnest, but we’re on track.
Q: So these will be the obvious single aisle routes?
Ans: That’s right. Unfortunately I don’t have anything less obvious for you.
And it’s not because we are being coy or anything . The fact is, until we have our 20th aircraft here, which is a matter of few days, we can’t have a serious and engaging conversation with the ministry in terms of what traffic rights are available, what traffic rights are not available. That’s the first step. Then once we get the availability of traffic rights, then we got to make sure we have got slots at the other end.
So that process is unfolding and until that process unfolds, it’s very difficult to say which is gonna be the first destination, which is why we have to stick to this generality for the moment.
Middle East, Southeast Asia, you know, Nepal, Bangladesh, Sri Lanka, these are some of the obvious choices that an airline like us would love to partake.
On the one hand, they’re also super exciting, right?
Imagine for us. Imagine Akasa plane landing in Southeast Asia, with our seats and our livery, while the destination might be obvious, but that’s very, very exciting for us.
Q: What can passengers expect when they fly Akasa on international routes?
Ans: Akasa experience should be as good, if not better than any airline, period. Which means our seats will be more comfortable with more leg room, when we have the consistency of the USB port, when we have the consistency of the device holder, we will mention that it’s not too far away. And so that’s something that people can look forward to, then brand new aircraft, the best leg room, a pre order menu that is extensive, so great food. Flight attendants that I think are getting known for their warmth and their hospitality. We are sort of a category defining airline because on the one side we have extremely affordable fares but the other side, we want our experience to be compared with the best airlines that are known for the best experience.
We know exactly who we had to compete with domestically and internationally, we had our business plan three years into making before the launch..
Q: When you fly international you will be pitted againstfiercely competitive airlines with regard to fares they offer or some have top of the line products. So it might appear as a silly question but I need to ask you – where will you compete- on fares or on the product?
Ans: You’ll answer that question for me because I think we need to compete with not just those two, but a lot more, right? I mean, if I told you great experience, but you have to pay a gazillion rupees for it, you’d say forget that. If I told you $2.00 but we are going to beat you up every step of the way, you’ll say forget that as well.
So I think the consumers around the world want a balance of many things. They want the affordability of the fares, but they also want extremely good experience.
And that’s the reason why we are emphasizing the fact that we are a category defining airline and we have consciously spent money on things that really matter to the consumers.
But let me add another dimension.
You know, India has got demographic that is, you know some 65% are 35 years or younger.
For them, it’s not just the fare and the experience but they have got a different level of consciousness.
Q: When you say different level of consciousness what do you mean? And how does that matter to an airline?
Ans: Like my children. They tell me, ‘Dad, we got to go to that restaurant called ‘Ishara’ ( Palladium Mall, Mumbai, where the servers are hearing impaired and sign language is used to convey the order) and we patronise those kind of restaurants because the children want to.
And so there are multiple dimensions that go beyond just fare and service. It’s the consciousness of the airline. It’s our focus on the environment that we think will also pull people into a Akasa.
And by the way, different consumers think differently, right?
Not everyone has the means, you know, to go to an Ishara to patronize a restaurant with that kind of ethos.
And so some people will be a little bit, you know, choosing us based on the affordability of fares. Some people will love our experience. Some people will love our consciousness. Some people will love all three aspects of it, but just to tell you that this is where our focus is at.
Q: So then you would be that elusive magic airline?
Ans: Manisha, when your son was little, you told him to believe in good human beings, trust people, always think the best of them, believe that people can do good and make money.
Don’t choose between the two. Always be honest because it pays off. So we believe that.
Q: Are you well funded- for expansion, for PDP payments?
Ans: We are absolutely fine. We are a well capitalized airline.
You know, you talked about PDP and growth. We bought 4 aircraft. (At Paris Air Show in June in addition to previous order of 72 Boeing aircraft) It was something small, but you’re not allowed to do these kinds of things if you aren’t well positioned. So I’d say we are absolutely fine, no issues there.
Q: What is the mix of the three digit aircraft order that you said Akasa will be announcing by the end of the year?
Ans: If I were to say we are going to do this or buy that, then we would be weakening our negotiating position. So I would say you have to stay tuned. It’s not that far.
Planes. Talks. Travels. 