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With low-cost airline IndiGo launching its Initial Public Offer on October 27, the airline’s President Aditya Ghosh met with select newspapers including BusinessLine. Edited excerpts from the interaction:
What is the benefit the promoters see in going public rather than getting a foreign airline to invest in the company?
We do not really need a crutch from anybody else. We are already standing on our two feet and running, and have been running, for seven years. We have a relationship between the management team and promoters or founders, where we are able to take quick long-term decisions. That happens when there is complete uniformity of thinking and direction. We never even thought of that (foreign investments) option. This is not unique to IndiGo — it happens to a lot of organisations. If there are a bunch of conflicting thoughts or strategies then it slows down decision-making.
But when you go public you will be answerable to a lot more people…
That is not a problem for us. It is only that the strategic direction should not change.
That being?
Low cost and believing in the growth of India. Where in the next 10-15 years can we create a 300-400 aircraft airline network in a country the size of India which is low cost, sustainable and reliable?
Why the decision to go public in the 10{+t}{+h} year. Is it competition catching up?
No. We started thinking about it about a year or so ago. It is coincidental that it is in the 10{+t}{+h} year.
The decision to go public came when foreign airlines were again allowed to invest in airlines in India, so you had new players with deeper pockets…
Today our cost structure is so much lower even when some of our competition is sitting overseas. When they come to India and lose those advantages the cost structure actually goes up.
Our competition is with who we were yesterday. Can we keep driving down our cost structure? Can we keep creating efficiencies?
Is going in for financial leases on your radar?
No. For the next seven-eight years it is only operating leases. We may do a few financial leases but that will be eight-nine years from now. At the moment 22 aircraft are on finance lease and 75 are on operating lease.
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