Simply Fly

by Capt G R Gopinath

  One of the surprise discoveries of the channel exploration process was the Indian post and telegraph department. Perhaps the oldest colonial institution, the Indian P&T used to, till recently, have a very visible presence. I remember the red letter-boxes that hung from poles and pillars or stood at street-corners. All these boxes all had a little black window with space for three numbers and two letters to indicate the clearance time. I would never have considered the Indian post and telegraph as a potential channel for Deccan but for the post-master general of Karnataka, Meera Dutta.

  I met Meera Dutta on a flight. She seemed to be an extremely innovative and energetic woman and very dedicated to her work. She told me that Indian P&T had plunged into a crisis with the arrival of the Internet and the mobile phone. The department initially had considered closing down many post-offices but decided against it when someone suggested that they could sell other instruments such as insurance and savings bonds, also make use of technology and re-train and infuse new blood into the organization. She told me a story that opened my eyes. She was travelling on a Deccan flight from Hubli to Bengaluru. Her neighbour was an ordinary village woman who no-one would ever have imagined, would fly in an aeroplane. Meera asked her where she was from and how she had bought her tickets. The woman told Meera that she lived in a village near Gadag, an hour by bus from Hubli. She asked her son to buy a ticket and he went to Hubli and bought the Air Deccan ticket. Meera said, ‘Then it occurred to me that there are post offices even in small towns where people can buy your tickets. Some of these have now been Internet-enabled, so Deccan can definitely benefit from us.’

  The Indian posts, as I discovered for myself, has 1,55,000 outlets across the country and 10,000 in Karnataka. Meera had told me that Karnataka would eventually have 1000 Internet-enabled post-offices: 500 were already in place. The P&T can actually reach out to one billion people in the country and is perhaps the greatest channel for any socially relevant government scheme or for any business that has the ambition to target the entire population. The discussion with Meera Dutta eventually led to an agreement with the Indian Posts to allow the sale of Deccan tickets at their outlets. We installed vinyl backlit displays saying ‘Air Deccan tickets sold here’. Deccan now had visibility in the remotest corners of the state.

  We had pioneered many routes and were the only ones flying to those cities and towns and enjoyed 100 per cent occupancy on those routes. On routes where we competed with the regulars, we managed a good 90 per cent occupancy. These were sectors like Bengaluru–Hyderabad, Bengaluru– Chennai, and Bengaluru–Mangalore. We were offering half the fare charged by Jet Airways and Indian Airlines. I never missed an opportunity to fly these aircraft and talk to passengers and acquire a feel of the pulse of people.

  People liked the ATRs. The aircraft were small and check-in and boarding time was short. The aircraft had its own ladder and passengers did not have to wait for a step-ladder to arrive or a high-loader to load baggage. The plane had an informal ambience, which made the passengers feel comfortable and at home. At the point of arrival, passenger baggage was rapidly sent to the conveyer belts.

  Competition had spread a rumour about the safety and reliability of our aircraft. People had gone about saying the aircraft we were using were old and unsafe, and this did serve to scare away some people who were new to air travel. People believed the rumours because, on the face of it, they thought that if you were running an airline at half the usual cost, surely there must have been compromises with safety. However, gradually the facts of our business model became well-known and we gained credibility as a safe and reliable airline.

  A week after the inauguration, I received a call from the BBC in London who were excited by our emphasis on the ‘unconnected parts of India’. The BBC producer said they wanted to interview me on board the Bengaluru– Hubli flight and also wanted to speak to passengers on board. They planned to spend the day in Hubli and visit the chamber of commerce. They were also keen to speak to small and medium entrepreneurs to find out what people thought about air connectivity and the impact they thought it would have on their businesses. There were other national and international media representatives who came and met me and wrote about the new airline.

  We also had to dispel rumours about Deccan that our aircraft were noisy and shaky. That was not true, but it was true that our flights were getting delayed because we had a huge logistics problem. We were ramping up at the rate of an aircraft a month and had deployed seven aircraft in seven months, and at the end of six months we were operating sixty flights a day. Our original plan was to have seven aircraft in eighteen months, but having inducted seven aircraft we also needed seventy air-hostesses, seventy-five pilots, and thirty-five engineers. Some of the problems stemmed from managing growth but some came from poor access to airport infrastructure.

  We had, however, to quash doubts about the safety of our aircraft immediately. Aircraft, new and old, are safe or unsafe depending on maintenance and observance of safety procedures. Flying discipline is another contributory factor. We were not compromising on any of these. Airlines like British Airways or Lufthansa fly aircraft that are ten, fifteen, or even twenty years old. It is only the low-cost airlines that have a fleet of relatively new aircraft. Being cash-strapped, we had begun with relatively older aircraft but would maintain them to perfection: this was our mantra.

  The rumours were swirling around in my head. What if there was an ounce of truth in them? I spent a lot of time at the airport and in the workshops. I terrorized my people. I did not want them to cut corners, and wanting them to realize that low-cost did not mean low quality and low safety. We also put out an ad: ‘We are cutting costs not corners!’

  Water was the source of some initial dissatisfaction among passengers. Indians expect water to be served free and passengers asked us how we could sell water when it flowed freely. Our crew had to convince passengers why we could not serve water free. We ran advertisements in our in-flight magazine explaining why we don’t provide complimentary water and catering on-board. Some showered compliments and some complained. Some told us what Deccan must and mustn’t do. Deccan had become a people’s airline.

  I publicized that we could not give free water. I argued, ‘You don’t get free water on a KSRTC bus or in AC II Class train. You get free water in AC I Class.’ Some suggested factoring in the price of a bottle of water in the ticket.

  My energies were, however, focused on two fronts: engineering and flight safety. No compromise, no cutting corners. I told passengers we were committed to four principles of LCC: fly safe, be on time, deliver bags safely and quickly, and offer lowest fares. All these promises were measurable.

  Regarding newspapers, I stuck to the original decision. We, however, allowed some publishers to place their issues on board; they paid us for it. We got a publisher to produce our in-flight magazine Simplifly. I used the magazine as a vehicle to explain the low-cost model to passengers and to convey messages. We also put our schedules, advertisements, and updates in it. Most importantly, it helped generate some revenue through the advertising.

  Vijaya Menon, who joined me in Deccan Aviation, helped with media handling for Air Deccan, looked after the magazine, and handled customer relations. She did such an excellent job of the media relations that we were constantly in the news. People enquired about the PR agency they thought we had hired to manage our media relations, finding it impossible to believe that one woman was handling it all. It was truly a tribute to Vijaya Menon’s acumen and ability.

  Creating a brand image that has good recall is a tough task. How can one brand name stand out among thousands? Not more than twenty companies in India have that kind of evocative power. A company requires both media and marketing effort to achieve that. We wanted to achieve visibility and recall at the lowest cost. What we managed to do, with the help of the marketing team and Orchard, was to capture the imagination of the people. People recalled Deccan readily because they became brand owners and stakeholders. The
y identified with it as their own airline.

  The reach of Deccan as a brand was phenomenal. Once, Renuka Ramanathan, CEO of ICICI Ventures, India’s largest venture capital fund, who eventually invested in Deccan, told me a story about her son. Whilst she was at the dinner table, she asked her ten-year-old if he knew the meaning of low-cost airline, and before she could finish framing her question, he shot back, ‘You mean Air Deccan, mamma?’ On another occasion I received a very warm letter from one of our passengers who regularly flew my airline, a gynaecologist attached to the famous Manipal Hospital. She wanted to share an incident with me. ‘I have a big fan of yours in my family,’ she wrote. ‘He is only nine years old.’ She said she was tidying up her son’s study table when among sheaves of paper and notebooks she chanced upon a cartoon about Deccan. Her son had drawn the cartoon with an aircraft in the centre and me beside it with the Deccan logo prominently displayed on it. She said nobody had ever asked the boy to do anything like that. It was indeed a tribute to the power of Deccan as a brand that had triggered the boy’s imagination. She had enclosed the cartoon along with the letter.

  Deccan’s visibility as a brand and its widespread recall owed much to the creative inputs of Nitish Mukherjee, who took over as MD of Orchard Advertising when John left, Thomas, the creative director, and Nutan, accounts director. The three identified themselves deeply with Deccan.

  The in-flight magazine served two purposes for Deccan. It allowed us to explain our low-cost carrier model to passengers and answer the questions that had been raised about safety. It also brought us regular revenue on the strength of passenger numbers. I asked the editor of the magazine to keep in view four quality parameters: layout, paper quality, style of cover design, and tenor and content of articles. I took an active part in the content design and outlined articles that I wanted featured in the magazine. I suggested they carry articles on tourism; on spectacular destinations; on the cultural labyrinth that made-up India, and on entrepreneurs. It was a simple deal. The publishers of the magazine would give us revenue based on the number of passengers flying Deccan. As numbers rose, the revenue also rose. The publishers’ derived their revenue from advertisements.

  We gave the publishing contract to Radhakrishna Nair, a former editor of Business India and an associate of the Anand Mahindra Group. He published and edited the Man’s World magazine

  We signed a separate in-flight shopping contract. We allowed the contractor to sell branded goods on our flights and received a fixed commission on the sales.

  Our marketing team worked so hard, so creatively, and in such a focused manner that at the end of the first year we had 2000 points of sale across the country; at the end of three we had 7000 touch points. These were accredited and authorized sellers of Air Deccan tickets. In the first year we had one person handling these travel management accounts, and four at the end of three. We had managed to give the IATA travel agents a sense of confidence in our model and they began returning, realizing that the model was good for business and good for them. They all brought their boycott to an end and joined us.

  When they heard of the successful launch of Deccan’s regular flights to small cities and towns such as HubIi and Belgaum, chief ministers of various north Indian states began to call. Among them were Jharkhand chief minister Arjun Munda; Himachal chief minister Virbhadra Singh, and Uttaranchal chief minister Narayan Dutt Tiwari. They wanted to meet me on their next visit to Bengaluru. New states had been carved out from the old and large states of Uttar Pradesh (Uttaranchal), Madhya Pradesh (Chhattisgarh) and Bihar (Jharkhand). The political leaders were desperate for air connectivity to create conditions for economic growth. It was such a reversal of trend: political leaders were now wooing entrepreneurs because they saw the benefits that stemmed from creating new infrastructure. I was reminded of an incident in Bengaluru a few years ago when a chief minister and the chief secretary of Karnataka did not turn up for an appointed meeting with Ratan Tata for over an hour, compelling him to leave.

  The calls from political leaders and the bureaucracy were unceasing. They were from principle secretaries of tourism and infrastructure development, who wanted me to meet their CMs. It was a refrain that they had met Azim Premji or Rahul Bajaj, or Narayana Murthy, and the industry leaders were willing to set up bases in their states only if the government could provide air links.

  The enthusiasm of the political leadership for connectivity was both intense and widespread. At one point, I was often working simultaneously with twenty airports in unconnected interior regions of the country to have them ready for operations. I was coordinator between the different agencies and wanted to speed up official and statutory clearances.

  I wanted to scale up operations quickly. By working with twenty airports at one time, and at an implementation ratio of one in four, I would accelerate the early completion of five. My team made trips to remote places where nobody wanted to go, travelling by train or bus. As a team leader I was tough. Between a tough leader and an easy one, one would prefer to work for an easy boss. But a leader who is not a taskmaster will cause the net energy of the organization to be negative and employees will not feel motivated.

  This was my experience during the 1971 war. The Pakistani army deployed in East Pakistan was leaderless; their soldiers were degenerate, corrupt, and debauched. The Pakistani army on the western front was a fine fighting force, comparing well with the best in the world. That was because it was well led, disciplined, organized, and energized.

  There was a reason why I worked really hard to get the airports ready. We had to take delivery of three more ATR aircrafts, and an expanding fleet needed greater airport space. If we did not get them ready in time we would have to add flights on the Mumbai–Delhi or on the Bengaluru– Chennai or Bengaluru–Hyderabad sectors which went against my strategy and philosophy of opening new markets and creating customers rather than take on established airlines like Jet and Indian Airlines by going to metros. Someone gave me the analogy of a frog in water that was being slowly heated. The frog would die when the water reached boiling point, but throw the frog into boiling hot water and it will jump right out!

  However, not withstanding above, Deccan’s gradually increasing presence roused the existing carriers from complacent slumber. Jet injected new energies and initiated revenue management. It lowered its fares by 25 to 40 per cent and increased occupancy. The new growth was over an average base line and not in absolute terms. It, however, looked promising nevertheless because stagnation had overtaken the airline. Loads improved and it looked a promising upswing, with Jet adding more flights and more aircraft. Indian Airlines followed suit.

  It seems intuitive to think that monopoly protects a business from competition, but my experience is that it is competition that enlarges a consumer base and protects the business and not the other way around. I once holidayed at a seaside resort in an alcove along the Konkan coast of Karnataka. That part of the shore attracted turtles. The waters were pristine and the swimming experience perfect. It was a quiet and pleasant retreat, but when I pondered the business aspect, it was disturbingly quiet: a resort of that quality should have been busy with tourist arrivals. Why otherwise did tourists prefer to head for Goa, slightly to the north, and not come here?

  People travel to Goa in large numbers because it caters to the entire economic spectrum of tourism; it offers something worthwhile to everyone. There is no competition in exclusion. I had another experience of a similar kind in Hassan. I went to a pharmacy close to the district headquarters. There were a dozen pharmacies in the neighbourhood. I once asked this chemist, ‘Your shop is located in a place where there are twenty other pharmacies. Doesn’t that affect your business?’ What I heard from him is an unforgettable lesson in customer psychology. He said, ‘Sir, an isolated chemist’s shop in a residential area is far less frequented than twenty shops in the bazaar area. You will ask me why. I say it is so because people come there knowing that a cluster of shops together will have all the medicines
in the medical pharmacopoeia. Therefore someone looking for prescription medicine would rather go to the cluster of shops. What the customer does not find in one, s/he will find in another. Isn’t that convenient?’

  A similar principle operated in Hong Kong where the largest market for electronic goods used to be located in the cluster of by-lanes in Tsim Sha Tsui, on Kowloon Island; this is also true of Bengaluru’s Chikpet or Delhi’s Chandni Chowk.

  Competition can only kill business when the business is inefficient. Competition helps to improve quality and brings down prices and is therefore good for the consumer. Monopoly, on the other hand, invariably stifles business. It is good neither for the consumer nor the business nor the industry.

  I met Chandrababu Naidu once again to seek his help to start flights from Hyderabad to Vijayawada and Rajahmundry. Chandrababu Naidu was dynamic as a chief minister. Though not highly educated in the formal sense he was gifted with an intuitive understanding of the meaning of reform, technology, and infrastructure development. Politicians see that subsidies do not help the end user. They know that these are eaten up midway by agents and touts and the corrupt in the bureaucracy. Their populist plank does not however permit them to act to replace subsidies with core infrastructure creation. Chandrababu Naidu was different. He shrugged off populism and reformed the state at a frenetic pace. That alone did not help create jobs in small towns: he needed to build a business and economic ecosystem to do that.

  Vijayawada and Rajahmundry were two airfields I was planning to make operational and had met Rudy and BJP supremo Venkaiah Naidu about it.

  Although Chandrababu Naidu and Venkaiah Naidu were from different parties, they both realized the importance of air access to small towns and cities. Venkaiah Naidu spoke to Chandrababu Naidu and Rudy to expedite the repair of the airports at Vijayawada and Rajahmundry, and Chandrababu Naidu even gave a date when to launch the flight. This second launch was as important as the first launch for Deccan. It would reinforce the idea that Deccan was here to transform the country.