They went back and sent a large team comprising investment bankers UBS, lawyers from Amarchand Mangaldas Jain, and heads of flight operations, marketing, IT, and engineering. They did due diligence and agreed to invest in the airline if legislation was favourable and we shook hands. Unfortunately, the political weather changed and elections were announced. The BJP-led government was in a rush to pass several bills, including that permitting foreign airlines to participate in Indian airlines. The cabinet is believed to have decided that more discussion was needed on the legislation. The BJP did not return to power and the bill remained on the back burner, and the Congress-led government rejected it. Our hopes of a partnership with Singapore Airlines were therefore dashed, and the law also precluded another potential partnership for Deccan–with the legendary Richard Branson.
Interaction with Sir Richard Branson
Our quest for investment partners continued. After SIA, I got a call from Richard Branson’s office. Branson is a celebrity in more than one sense. He is a much loved entrepreneur with many facets to his character who has done myriad things. He has an abiding passion to push himself to the limits of the human, physical, and mental endurance. He has attempted a great many feats from the glossary of adventure sports. He attempted to cross the Atlantic, the Pacific, and the world at various times in various kinds of contraptions, including a hot air balloon, sail-boat, and speed-boat. He created a record for the fastest crossing of the English Channel in an amphibious vehicle. He has also acted in television serials and in films. He combines the persona of daring adventurer with a keen nose for pioneering businesses, that together form his eclectic character. He attracts the youth of the world with his charisma, aura, aplomb, and an irresistibly endearing manner.
Branson’s secretary said they would like to arrange a meeting for me. He owns a full-service airline, Virgin Atlantic, which he holds very dear, and which is one of the most successful in the world. Branson had however also set up low-cost carriers like Virgin Express and Virgin Blue before setting up Virgin Atlantic.
It was decided we would meet in Oxford where Branson lived. I asked my daughter Pallavi, who was studying in Liverpool at the time, to join me. I knew Richard Branson was easy on the dress code so I had decided to wear semi-formals but without a tie. Pallavi, however, insisted that I at- least wear a jacket.
Richard Branson was unstuffy, informal, wearing a white linen shirt and slacks. I was glad I had not put on a tie! We had hoped to see him at his Oxford house and chat over a drink before heading out to a restaurant. The London traffic however got the better of us and we called to say we would arrive late. Richard suggested we head straight for the restaurant. He was there to greet us; warm and affable.
Once seated, we got talking. Branson took out his famous black leather diary and began jotting down notes. His autobiography said he never used laptops or computers but relied entirely on his traditional paper notebook. He came across as a man brimming with ideas, ever-ready to seize upon any new idea that excites him and to take up a challenge.
Branson told me he had set up Virgin Express as a low-cost carrier in Brussels but the airline failed. His CEO from the airline, Bret Godfrey moved to Australia. Godfrey suggested that Branson should start a low-cost airline down under and Godfrey would manage it for him. Branson asked Singapore Airlines, which had a 49 per cent stake in Virgin Atlantic, to invest $10 million dollars in his new venture. SIA refused. It said that associating with a low-cost carrier would dilute their brand. Choon Chew Seng confessed to me later that it had been a big mistake. Virgin Blue in Australia eventually became very successful, and Singapore Airlines for its part launched its own LCC, Tiger Airways.
Virgin Blue did not initially make money but held out. When things seemed really bad and bankruptcy stared in the face, Anisette, Australia’s major LCC collapsed. Overnight, the passenger traffic shifted to Virgin Blue. Within two years, Virgin Blue became profitable and became a huge stock market success earning millions for investors, including Branson.
Branson wanted to hear the Deccan story. I told him about my dream to empower every Indian to fly and about the need to connect the interiors of the country. Branson said he would like to invest in Deccan. That was very good news for me but there was a catch. There was no legal provision allowing foreign airlines to directly or indirectly invest in Indian airlines.
Across the street from the restaurant was a students’ hostel, with boys and girls lounging around. As soon as they saw Richard emerging from the restaurant, they came running towards him, screaming ‘Richard, Richard!’ Richard said, ‘I must run for it now. Good to have met. Bye!’ and made a dash for his car. The girls caught up with him and were tugging at his sleeve. Richard’s trailing voice uttered something to the effect that ‘My wife will divorce me if you don’t let me go ….’ He managed to shrug the girls off his sleeve, got into the car, and sped away.
Richard Branson later sent across a team to do due diligence on Deccan. Everything was studied and they found good levels of synergy with us. However, as was the case with SIA, we were unable to shake hands with Richard Branson because the law did not permit us. That was indeed an acute disappointment for both of us.
Incident with Citibank
All the systems at the airline had gradually begun to fall into place. Our IT system was basic and had been a source of concern but soon we were able to resolve most issues. Money came in from customer to the bank and from there got credited to the company account. There was, however, a small problem.
The transaction of money—transfer of money from customer account to ours—was taking a certain amount of time. Citibank was managing the payment gateway. The transaction began when the call centre operator swiped a card or entered a number. The payment gateway took time to acknowledge the transaction, leading to a delay in issuing the PNR number. Rather than the three minutes we had specified, it was taking seven to ten. This was too long. Data showed that latency was high and customers were dropping off. People do not like to hold on for an extended period. Also, critical to our cash flow, Citibank was taking five to six days to transfer our money to us.
This was not acceptable. I called Citibank and demanded that their transaction time be reduced to two-and-a-half-minutes as I would be flying several million passengers a year. I reminded them that if any customer of their’s delayed credit card payment by even a day, they charged 2 per cent interest per month. So a similar rule should apply in this case as well. I said, ‘You are sitting on my money for eight days. I don’t care how long you sit on the money, but for each day I’m going to charge you interest at the same rate that you charge credit card defaulters.’
The Citibank team leader said the delay was due to reconciliation of accounts. I refused to buy the argument. It was their responsibility to devise a way out. I was angry but still had not considered any alternative arrangements. However, a remark of his infuriated me. He said, ‘Captain, we’ll try to do this, but you must know that only Citibank has this capability in India. Nobody else can do it for you.’
Very angry, I warned them that I would get somebody else. I said, ‘Whatever software it is, it is being devised in some back-office in Bengaluru or Pune or Hyderabad. You had better start working or I’ll get somebody else.’
He did not believe me. I called Ajay Bhatkal right away and said Citibank was not the right partner for us and that he should begin discussions with someone else. ICICI at the time was into retail banking. I liked their philosophy of going to small towns. I told Ajay Bhatkal to talk to them. Let us give customers the option of booking tickets with either ICICI or Citibank. I did not wish to be blackmailed; did not wish to do business with someone who was both complacent and arrogant. Ajay got ICICI working on the project and they had it up in 45 days. At midnight, on the forty-fifth day we switched to the new system that gave customers a choice between the ICICI and Citibank gateways. The transaction with ICICI took twoand-a-half-minutes, raising the energy levels at the call centre and enabl
ing them to close calls sooner.
With ICICI our money was transferred online so there was no question of any delay. The system worked perfectly for the fifteen-day trial period agreed upon so we put ICICI as the first option and Citibank as the next.
We positioned it in such a way that 90 per cent of the business went to ICICI and 10 per cent to Citibank.
People at the Citibank woke up. Top management called to ask what had gone wrong. I said, ‘You guys were smug. What I did was my only recourse.’ It was again a lesson for me. If Citibank could lose business with us, we would lose our business with a client if we were not sufficiently committed or not quick enough to respond to customer needs.
12
If a man does not know to which port he is steering no wind is favourable to him.
—Seneca
The Growth, the Challenges, the Changes
A
lthough we were low-cost and were offering low fares, we had among our passengers many high-profile individuals. Some of them were flying us because of Deccan’s novelty: new, different. Some used our services because we were flying to rural and small-town destinations where others didn’t venture. The great sarod maestro Amjad Ali Khan once tearfully acknowledged his sense of gratitude to us for flying to Gwalior, his home town. Among the other celebrity fliers were Azim Premji, Sunil Dutt, Vinod Khanna, and Raj Babbar. Someone in my team suggested that we could get one of them to endorse our brand. I however thought differently. We were aiming to fly the common man. The image of the star flier who flew occasionally was not the image I wanted to create. Secondly, a celebrity-branding exercise would add to the cost. Our cost-cutting had always been ruthless, and this new cost would have been incongruous. We would also have to raise fares. Fare calculations had been based on certain parameters, and changing one parameter would require us to rework the entire process. It did not seem advisable. I wanted the common man to identify himself with the brand.
A chance glance at a newspaper helped me decide what image to choose. It was a cartoon by R.K. Laxman, the creator of the ubiquitous Common Man. R.K. Laxman is one of India’s greatest cartoonists. In his early years, this Common Man was urban, male, and had all the qualities of being ‘common’. Laxman defined him through the logic of absences: he is not plebian, not philistine, not the element in the rabble, not a member of the Spanish philosopher Ortega Gasset’s ‘mass’, and not ‘working class’ as Lenin would have seen him. He is aware, alert, perspicacious, sensitive, able to discern hidden personal agendas in political rhetoric, possesses opinions of his own and is able to reason ‘why’, ‘what’, or ‘how’, and has an immense store of empathy for others of his kind. There is a cheerful resilience about the character. This Common Man has one major deficit: he has no voice: it is lost in the cacophony of the powerful. He, nonetheless, has one source of illimitable strength. Using it he can shake governments and move the earth. It is the power of silent comment. Laxman seems to be subtly autobiographical in acknowledging the helplessness of speechlessness of the Common Man while at the same time celebrating the power of silent comment in his own recreation. Over the years, the Common Man has gone beyond urban geography and shed his implicit gender bias. His constituency now encompasses the rural as well as the feminine. One might even read him as a metaphor of all things Indian!
I was reminded of the power of this silent comment when I saw a cartoon in the Times of India. It was a telling comment about what it means to be a common Indian and the snobbery of the not so common. Both had been juxtaposed as metaphors, and as people in flesh and blood, seated next to each other in an Air Deccan flight. Perched in the aisle seat, his one unshod foot pulled up and placed on the seat, the rustic traveller sits back expansively with arms thrown about in imperial abandon. A staff in hand, and like others in his rural fraternity, he is wearing a turban, a jubba, and dhoti. Placed next to his seat in the aisle and impeding the movement of people, there is a rail water jug with a lid that can be screwed on. Called ‘rail chombu’ in the south, this water jug was used by passengers everywhere before packaged water became ubiquitous. His bed-roll has been placed in the cabin baggage bay, but it shows.
Occupying the window seat is the self-effacing Common Man, wearing his characteristic chequered and dog-eared tweed coat and dhoti, and a bewildered expression on his face. He has his old-fashioned long umbrella hanging by the armrest. The Common Man is balding, avuncular, and amiable in a way that is both endearing and exhibits an eager willingness to please: if only you are willing to listen! The Common Man has his face turned towards his well-dressed, upwardly mobile fellow passenger. The passenger in the middle seat is sandwiched between the rustic and the Common Man. He sits plaintively, uncomfortably, arms folded, and wearing the exaggerated air of social claustrophobia. He makes it obvious he is not used to social milieus of the kind that Deccan is encouraging to fly. He desires exclusive company but does not wish to be seen as a snob. He says: ‘I am not really a snob, but if these airlines bring down the fares any further, I will start travelling by a train or bus!’
Having seen this cartoon, I thought that I must ask Laxman to let us use his cartoon as our brand metaphor. I knew the people we intended to attract as passengers would identify themselves with it. Deccan’s philosophy could have no better mnemonic and psychic association to equal the Common Man. When I suggested that we approach Laxman, I was dissuaded. The advertisement agency people said when they had tried to get him to agree to their using his cartoon character as a logo for a previous account; he had bluntly refused. I had better abandon the idea, they said. I, however, wanted to give it a try and therefore wrote to Laxman and he readily agreed to give me an appointment.
Laxman lived in a flat in Mumbai’s Worli suburb. There was something reassuringly old-world Mysore and middle-class about the flat. The furniture, the décor, the library and study where Laxman sat each day to draw his daily cartoon—he has done so without a break for over fifty years—and the uppittu that was served reflected comfort and quiet industry.
Hanging on the wall I saw a large framed cartoon by the artist—of a young boy who is surrounded by a plethora of all variety of calculating gadgets and mathematical formulae, and looking quite lost in their midst. It was a cartoon inspired by his son. I asked Laxman whether his son also drew. Laxman was quick to reply. With a stolid, deadpan expression on his face, he said, ‘Yes … he draws [long pause]. He draws money from the bank.’
Laxman and I talked about a variety of things: about my airline, my philosophy, and my dream to make the common man fly. Then I told him about the cartoon he had drawn and asked whether we could use his Common Man as Deccan’s mascot. Laxman was amused at the idea and without a moment’s hesitation he said ‘Yes’. I said we would paint our craft with the motif of the Common Man. Deccan would be known as the common man’s airline and would immortalize Laxman’s inspiration. Laxman agreed and we got to use Common Man as our mascot.
I returned from Mumbai armed with the mascot. We now had the mascot and the metaphor, but we needed to get in place the things they evoked. The power of the metaphor is that in a single flash the entire idea is revealed. Working systems are however made up of components, and to see the whole, one must make an effort to imagine and perceive the larger picture.
Our pilots, engineers, and managers were great at their jobs but they worked in isolation and were in their own individual silos. For a company to deliver its product or service, all departments must work individually, in tandem, as well as together. This requires cross-departmental dialogue and collaboration. On one occassion two departments whose heads had sent each other emails but had never sat across the table and spoken to each other even though their cabins were alongside had completely misread each other, and in consequence of this incomplete communication we nearly came to grief.
After the near-disaster, we decided that every Monday the department heads would meet. They spoke their views, shared their concerns, and made efforts to understand one another. We
had a similar meeting of managers from across the country once a month.
I took upon myself the task of ensuring that communication channels were open and people understood one another’s requirements. In the execution of this task I travelled to our eight bases: at Thiruvananthapuram, Delhi, Bengaluru, Mumbai, Ahmedabad, Kolkata, Chennai and Hyderabad. I undertook a tour of each of these bases once every two or three months. I spoke to people on the ground and at airports; to technicians and engineers, sometimes hearing appalling stories. Accompanying me on these trips were the head of operations, the CFO, and head of HR. I asked the heads to try and understand grassroot realities; to walk across to an engineer working all by himself at night or visit a logistics centre and speak to technicians about their difficulties.
I realized that no management meeting was complete without visiting and understanding the nitty-gritty at first hand and at ground level. The visits encouraged employees and raise their morale. I always returned from these visits with the feeling that we were not doing enough for employee welfare.
There were problems with infrastructure because of pressure exerted by the existing monopoly players on the AAI. While Indian Airlines and Jet Airways had multiple parking slots in Mumbai and Delhi, which allowed them to locate routine repair and maintenance facilities in two places and bring down their operational costs, we were given only one parking slot at an airport, so that we had to invest in the same kind of facility at each of these centres. This completely stretched my finances and managerial abilities, and resulted in my having eight operational bases across the country for sixteen aircraft.
Multiple slots at one airport base for five aircrafts would have been very useful. The number of staff and resources you require to maintain five aircrafts at one base is far less than for five aircrafts in five different bases. The number grew to sixteen aircrafts based in eight different locations and it became a nightmare. However, employee dedication and management commitment helped us overcome the problem. A year down the line it worked to our advantage because overnight we became a national presence and we were able to continually absorb and deploy aircraft coming in over the next forty-five months, one a month, at different location in the country.
Simply Fly Page 45
