‘Complicated but close’: Jet Airways CEO on relaunch of ‘fantastic’ airline
Jet Airways 2.0’s chief executive officer (CEO) Sanjiv Kapoor, a seasoned aviation professional who began his airline career in the United States in 1997, speaks to Hindustan Times on the growth prospects of the Indian aviation sector and his alacrity to relaunch the airline. Excerpts:
Q. What do you have to say on the growth of the aviation industry?
A. The growth in air traffic in India since the year 2000 has been nothing short of phenomenal. Let me illustrate this in two phases: 2000-2013, and 2013-2019 (until COVID). I got involved in Indian aviation in late 2013. In 2000, the total number of domestic passengers in India was 13.7M million. In 2013 it was 61.4 million and in 2019, it was 143 million. A tenfold growth in two decades.
To put this growth in context: In 2019, Kolkata airport alone handled 20 million passengers, which is almost double of what all of India handled in 2000. In 2019, Delhi airport alone handled more passengers than all of India in 2013.
In terms of aircraft, all Indian airlines combined had 113 aircraft in 2000. This grew to 395 in 2013, and 706 in 2019. Despite this massive growth, it should be noted that China’s three largest airlines each has over 700 aircraft, so there is still room for massive further growth in India.
Also in the last few years, the regional connectivity scheme, UDAN, and various other schemes have helped the sector to grow.
Very importantly, in the last few years under the current government, many of the states have reduced or eliminated the VAT ATF taxes, which were 25 to 30%; the majority of the states have brought it down 5%, some even 1%, and this has been one of the biggest positive moves that has been done to not hurt the industry. It has driven growth in the airports. The number of flights and our passengers have actually grown significantly.
Q. How do you see the expansion of airports in the country?
A. From 2005 to 2015, airports at major metros such as Mumbai, Delhi, Kolkata and Chennai, besides the new greenfield airports in Bengaluru and Hyderabad, were significantly expanded and modernised with large new terminals.
However, the number of independent or simultaneous use runways at the Top 10 Indian airports, a must-have for slot capacity expansion, has remained almost unchanged since Independence.
In fact, until this year when Bengaluru opened a second runway, there was a net addition of only one simultaneous use runway, post-Independence, at Delhi.
Now with new greenfield airports being built at Jewar (Noida) and Navi Mumbai, which will coexist with the existing airports, as well as addition of the new parallel runway at Bengaluru, airport capacity at the Top 10 airports will once again expand to handle the continuing growing demand.
The expansion at Delhi, Mumbai, Bengaluru, Hyderabad and proposed new airports at Chennai and Kolkata will also allow much more capacity to handle flights from Tier 2 and Tier 3 cities, including more RCS flights and flights from new airports that have been opened in recent years in smaller towns.
Q.Is it a fallout of Covid that we are seeing more air incidents?
A. I don’t think that India’s incidents have gone up. We look at the overall safety record of Indian carriers, especially given the growth over the last 10 years, and we do it on a per flight hour per flight basis and I can tell you that we were up there with the best of the world.
Q. It’s been about six months since you are planning a first of its kind airline revival in India. Are you as optimistic as you were six months earlier about it?
A. Yes, I’m very optimistic. It’s not easy. In some respects, it is much easier to start a new airline, but what we’re trying to do is revive a fantastic brand, give another option for many former Jet staff as we grow, provide customers a refreshed value proposition, and bring back more competition in the segment.
I’m waiting for the day we open for sale, when we can announce our business model and our customer value propositions that will bring real, meaningful change in the Indian airline industry. Yes, it’s taking a little longer than we had hoped. But I don’t think there’s any airline in India, or maybe in the world, which started within exactly the time frame that they had hoped to start in.
When you’re talking about billions of dollars’ worth of investment, a delay of a few months is not uncommon, and at the end of the day, it does not matter in the grand scheme of things.
Q. Are you facing any roadblocks in terms of funds?
A. No, that is not the issue. Whenever we start an airline, contracts that we sign today are going to be with you for 10 years or more, and it’s better to take time to sign the best possible contracts now rather than act in haste and repent later. So, we will take the time required to get the best contracts we can.
Historically, some airlines in India have focused a lot on the aircraft contracts, which is important, but only to realise later that they did not spend as much time or make as much effort to finalise IT contracts, distribution contracts or ground handling contracts, or very importantly engine and maintenance contracts.
Because everybody thinks airlines are aircraft and focuses disproportionately on that, those other contracts eventually end up really costing a lot, so we want to make sure that we get every contract right.
This is also the first time in India an airline is being revived, and it’s a bit complicated, but we are very close. So these two forces together are resulting in the delay relative to our initial internal target of October.
Q. India currently has only two full-service carriers and majority are low-cost carriers (LCCs). What is your take about it?
A. The volume growth is going to come in the low-cost or price sensitive segment because a large portion of the passengers don’t care about the frills, they don’t care about free meals. But at the same time, the segment where the higher end and other customers who actually are willing to spend for full service, is going to grow.
So, there would be growth having both segments. Obviously much bigger growth is going to happen in the low-cost or price sensitive segment because that’s India’s demographics.
Q.What is your view on your paperless travel, which is one of the targets that India has been working on?
A. Mobile boarding passes for domestic travel have been a revolution and boon in India for passengers, airports, airlines and all stakeholders involved.
Right from the entry into the airports to security, and further on to boarding the aircraft, one can use the mobile boarding pass – no paper, no stamping anymore for domestic flights. It helps save huge amounts of paper, further helping save hundreds of thousands of trees. It saves time; if there is no luggage, one can go straight to security and to boarding with no paper in the process whatsoever; passengers don’t need to stand in queues to check-in unless they have luggage, and it also makes kiosk check-in obsolete. One simply does not need a piece of paper.
Kudos to all involved in making this happen, a result of Digi-yatra along with COVID-induced changes to processes that eliminated the stamping of paper boarding passes.
In terms of using mobile technology or mobile boarding passes for domestic travel, we are at par with the best of the world. Some airports in internationally have also started using facial recognition, and it’s fantastic that India is heading in that direction by starting to trial the technology.
However, the changes thus far in India have been for domestic travel only. For international paper boarding passes and stamping are still required. Immigration in most parts of the world still requires interaction with immigration officers and physical passports.
However, some countries and airports have moved to electronic scanning of passports and in some cases even a passport is not required, just facial recognition is used, for example in the US for arrival immigration for those who have enrolled in Global Entry.
In some other countries facial recognition along with kiosk passport scan for digitally-enabled passports is used. There is no human interaction required. These speeds up processing tremendously. One looks forward to these technologies being deployed in India too to make international travel as seamless, paperless, and hassle-free as domestic travel is today.
For arrivals of foreigners into India, we still need a paper arrival form to be filled. It would be great if we can ease this process and digitise this, to make international arrivals for foreign visitors too paper-free.
Q. Recently the government is keen to make India an international transit hub . What are your thoughts on it?
A. There is a lot of interest and desire expressed to make airports in India international hubs like Dubai or Singapore. Certainly, India is very well-located, many of our airports today are on par or even better in some cases than many airports abroad with great infrastructure.
However, in order for them to become more competitive as hubs, it is important we do two things: Ease D2D (domestic to domestic) and D2I (domestic to international) transfer of passengers, in line with major transit hubs around the world.
In India, passengers still need to go through a security check for the second time when transferring between two domestic airports or when connecting to an international flight from a domestic flight. This could be looked into as passengers have already been screened by Indian security at the originating airport, therefore a second scan in India may not be required.
In most major hubs abroad, there is no second security scan required for D2D or D2I passengers, allowing more seamless and hassle-free connections and shorter connection times, which is a win-win for both passengers and airlines.
Another important way in which India can build connection hubs is by enabling seamless airside connectivity between terminals at major Indian airports.
Passengers in India, when transferring from one terminal to another at an airport like Mumbai or Delhi, are required to claim their luggage and exit one terminal and commute on the landside by bus, taxi, etc. to enter another terminal, and go through the check-in and security process once again.
This impacts not just international connections but also domestic connections, and this complicates the passenger travel experience, adds to travel time, and makes it inconvenient for passengers. Terminals are not always physically connected to each other, not just in India, but in many parts of the world. But there are buses or trains or monorails that take you from one to another on the airside (no need to exit the airport), without one having to claim bags and change terminals landside.
If our regulations allowed this, it would allow our airports to build airside connectivity and close a big gap relative for foreign airports in terms of being attractive hub and connection airports.
Q. How do you think social media have changed the flying experience? Has it empowered citizens more?
A.Social media is interesting; it has certainly empowered everybody by giving a voice. I think it has helped the consumer industry, it has possibly become more responsive to customer needs, where earlier, they could hide anonymous emails.
Now, customer complaints are a default to see this and the world can judge when a complaint is frivolous or when it’s genuine and therefore consumer companies of his companies have to act.
So, those who had under invested in customer experience and in addressing genuine problems of customers, have been forced to act, which is the positive.
Q. By when do you think you will be able to re-launch Jet 2.0?
A. We get closer every passing day. I’m not able to share any more specifics, all I want to say is, all of us at Jet can’t wait to announce ‘open for sale’ and to reveal our strategy, network fleet and customer value proposition that day. We are all waiting for the day when we can share all of the good stuff we have been working on.
Q. Have you been in talks with the aviation regulator, DGCA, for your preferred slots for the winter schedule that has already been prepared? How are you dealing with the situation?
A. We are absolutely in close contact with all key stakeholders, partners, and service providers regarding our plans, business model, network, and supporting services, and it will all get revealed in due course.
Q.What is the update on your recruitment process?
A. We have been recruiting staff, but at a measured pace, because we want to be sure we have the resources we need at the time they are needed. At the same time, we don’t want to have them prematurely so that, if the start is going to be ‘x’ months later, from the time we recruit, the next months you bear extra cost.
So we’re just trying to time it so that the resources are on the property at the time when they can be deployed rather than wait to be deployed. And obviously, it’s not easy to get it 100 percent right, so we’ve been fairly conservative.
The ramp up in hiring for operational stuff will happen when we announce the firm dates for when the aircraft come in, and we re-start. It should be noted that the majority of staff we have today are former Jet 1.0 staff.