Logistics

‘It’s low-fare, not low-cost’

Chetna Mehra Chennai | Updated on October 30, 2013 Published on October 30, 2013

Mittu Chandilya, CEO, AirAsia India.



The boys were excited with a few just saying ‘hi’ and clicking a picture with him; the girls, though shy, asked for autographs as well. These were students from some of India’s top management institutes being swept off their feet by Mittu Chandilya, the dashing young CEO of AirAsia India.

Chandilya is all set to start the airline’s operations with its maiden flight scheduled to take off in December or January. At just 33, Chandilya, who has MBA degrees from INSEAD France and Singapore (the programme runs in parallel at both campuses) and China’s Tsinghua University in Beijing, is well on his way to becoming a youth icon in India. In a candid interview with Business Line, on the sidelines of an event organised by the Madras Management Association, he explained that he wants to change the way people fly.

How do you plan to tackle competition? For instance, Indigo, has adopted best practices in low-cost aviation such as minimum time spent in airports?

Now let me tell you a secret. In the low-cost world that is very normal. In the low-cost world, every player aims for not more than a 20-25 minute halt. The rationale is that planes are a fixed asset, so what the planes need to do is fly. The more your planes fly, the more you are utilising your assets.

What we do differently from others is our discipline and focus on operations. For example, today, I don’t have a PA. I can get a PA but that cost can be delayed. It’s a struggle for me but I have made a conscious choice.

Similarly, it’s about how we hire our team. I would rather go for talent that is young as opposed to somebody who is the best person I can get from IIT and IIM. I don’t need a star player who thinks ‘I am better than the team’. I need a bunch of people who are willing to learn as a team and complement one another.

Therefore, our strategy is a lot about people. It sounds clichéd but my employees matter a lot and I go to war every day for my employees. What keeps me going is that I have a staff of 300 and I want my licence.

You are very active on social media, connecting with people.

At the end of the day, it’s all about people I am very active on Facebook and Twitter and reply to everyone who writes to me.

Does low cost mean low-quality too?

Absolutely not. It’s a perception that needs to be changed. Our planes are brand new. They come all the way from France. We have leather seats, and a great-looking crew. We have spent a lot of time in their training. Every person who joins my crew goes through two to three months of training. It’s a lot of cost. I think the right terminology should be ‘low-fare’. For me, if you give a low-cost or cheaper product, you can make people try the product (but) after that they are going to say. “I don’t want a cheap product for its low cost.”

Have you taken any cues from Southwest, the world’s largest low-cost carrier?

Southwest runs a very good airline. They have chosen what is important to them and they kind of work on that. They are very disciplined about what they do. Our business is a bit different; when you walk into our plane, you don’t really think we are low-cost.

Would you like to share any winning strategies for students?

Be Bold. Do the things that nobody wants to do. In my career, I have walked into the President’s room and said ‘No, I think the strategy is wrong’. Be humble, don’t be disrespectful but be very confident about what you are saying.

Take risks. In today’s world, thousands of MBAs are coming up. How will you differentiate yourself? Go against the crowd. Do something; even if you fail, you will learn a lot. Never chase money, it will come to you. I have never made a decision about money. I have given up a bigger salary. I have made a comment about taking a pay-cut. It is true. What’s more important is to figure (this) out: do you enjoy what you are doing? Are you learning? I am young, I like learning everyday. I am not an engineer, I am not a pilot but I learn everyday. I study stuff, I read all our manuals. Does your company’s success depend solely on profit?

No. Success depends on the goals that you set for yourself and how you smash those goals. Now, in AirAsia, for us, yes, it is about profit, but not singularly. Profits (are) in addition to having great quality, great service, having a database of the people who fly, about my social media — Facebook, Twitter. All of that matters.

India as a market is a great challenge...

But my eyes are on the goal. India is the biggest aviation opportunity. It has a population of 1.2 billion and how many people fly today? Seventeen million people! Isn’t it outrageous? An airline is not a luxury service. It should be a service for the people.

We are targeting people who have never flown and I think it is very possible. I think we need to be able to give them a proposition to fly. So, get a product that is very affordable for people. It’s not cheap, it’s affordable. Think about a first-class ticket in the railways, get a product and a price which is little bit more than that. And show them; look, instead of taking a bus that takes you eight hours to get somewhere, take a flight that takes thirty minutes. Finish up your business and come back the same day. Save on your hotel cost, save on your transaction, spend time with your children.

What if the competition starts copying your strategy, the game will be neck and neck then?

Anybody can copy what we are doing but they can’t be sustainable. You will see on the first day when we launch that all the fares will go down, but can they maintain that for one year? I can because my costs are razor-thin.

You want to rapidly increase the number of flyers but do you think airports are ready for such a rush?

Airports today are underutilised. There is a difference between how you and I view airports. I look at airports like a railway or a bus station. People need to move in, get check-ins done quickly and board the plane out. People shouldn’t be loitering around in airports. Airports are to facilitate the entry of the passengers in a safe and secure manner.

It’s our job to create the entry of more and more passengers in airports. We are more than an airline, it’s our speciality. We look at us differently, we want to help our partners, and for us airports are partners. And we want to help them grow, so we will teach them our principles and what we have done in Malaysia, how we can rationalise the processes.

What is your typical day like?

I get up in the morning, catch breakfast with my boys and drop them at school. I run three km and do strength training every day. And then I go for meetings. I am very hard on my employees and like to keep meetings as short as possible. I give them three minutes. If you can’t explain to me what you want to say in three minutes, you don’t know your stuff. I tell them not to show me Excel sheets and numbers, I can read those myself (later). I also travel a lot.

Published on October 30, 2013
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