Vijay Mallya (L), United Breweries (UB) group chairman, and G. R. Gopinath, managing director of low cost airliner Deccan Aviation, pose during a news conference in Mumbai June 1, 2007. United Breweries (Holdings) Ltd., which runs Kingfisher Airlines, said it will buy 26 percent of Deccan Aviation Ltd. for 5.5 billion rupees and launch an open offer for a further 20 percent. REUTERS/Stringer (INDIA) - RTR1QC3S
Air Deccan founder Captain GR Gopinath is making a big-splash return to Indian aviation by launching on Saturday regional flights under the government’s Udan scheme. Network 18's Binoy Prabhakar interviewed Gopinath on WhatsApp at intervals through Friday — he was busy with meetings owing to the impending relaunch — on the airline’s strategy to return with Re 1 tickets, the challenges and strategy. Here's an excerpt:
Captain, on tomorrow’s relaunch. Great chatting with you after long. So what are your expectations this time round?
Let me speak of my dreams. A huge part of the country is completely unconnected by air and many parts are very poorly served. It’s now largely a Bombay-Delhi driven (air) economy. That doesn’t lend itself to equitable growth. It’s also not a sustainable model for aviation. So I wish to connect nearly 67 small regional towns in the next 5-6 months along with our strategic partner Air Odisha across India.
There’s a pent-up demand there and those people are cut off from being part of the larger economic growth. So I plan to do it under the Udan regional connectivity scheme.
Air Deccan had connected many of these towns in 2003 itself but they are now sadly disconnected after the discontinuation of Kingfisher which acquired Air Deccan (in 2007). So in a sense, it was an unfulfilled dream which I’m fortunate to be in a position to do again.
You were expected to launch operations under the scheduled airline category rather than under the regional air connectivity scheme.
Those plans were overtaken by events. Udan fell in our lap by fortunate and fortuitous circumstances when my team bid and won 86 out of the 126 routes in partnership with Air Odisha because no one (then) was interested in regional connectivity. Now, of course, everyone is jumping in.
Ah, ok. But many experts doubt the sustainability of the regional connectivity scheme because of poor infrastructure, shortage of pilots, higher costs, etc. What do you think?
Yes, these are very valid points. And there are huge challenges. Udan, as the expansion of the acronym (Ude Desh ka Aam Nagrik) suggests, is a visionary and transformative policy that will change the economic landscape of the country as it will drive investments deep into its bowels and knit areas together which are alienated by subduing geography.
But many stakeholders like the monopoly private sector airports are not aligned to the vision of Udan. In fact, they are working at cross purposes. Also, there have to be reforms in DGCA (aviation regulator) and AAI (Airports Authority of India) rules and regulations to realise the dream of extending low cost air travel to the hinterland. It will also boost tourism and create jobs in those areas as all our major tourist attractions are in remote regional towns. But it’s sustainable because Udan provides subsidy and other tax sops for the initial three years.
What does your current operations look like?
We will be linking around 60-odd small regional towns across India in the next five-six months — Kolkata to Cooch Bihar, Jamshedpur, Durgapur, Shillong and from there, all of North East, and Ahmedabad to several regional towns such as Pantnagar, Kullu, Shimla, Ludhiana, etc and similarly remote towns like Rourkela in Odisha. We are launching with one 19-seater Beechcraft 1900d aircraft. Three more will be added next month and another eight in four-five months.
How does the arrangement with Air Odisha work?
We have combined to get economy of scale in aircraft procurement, leases, maintenance, IT systems , pilot and engineer training and flight operations, inventory, etc and Deccan which has experience and expertise will handle all that at the back end.
You are back with the Re 1 tickets that Air Deccan was famous for. Will such tactics work in the current business environment?
It’s just to stimulate market and thereby enlarge the consumer base and create awareness through social media. There are always some seats that go empty on certain days like on Diwali or Sundays…. so you give it away. And there are days before a big holiday like Durga Puja or a cricket match when you charge more. There’s a method to the madness.
Ok. Anything different passengers can expect in this foray?
You don’t want me to give Re 1 tickets away?
I didn’t mean that. I was referring to new tactics you plan to entice passengers with.
We will offer many packages to make air travel hassle free as we are going to remote destinations which are not connected and many are tourist destinations or industrial cities like Rourkela.
Your return to aviation coincides with (Kingfisher Airlines promoter) Vijay Mallya’s mounting legal troubles. Did you ever anticipate such a scene when you sold Deccan to KFA?
No, who did? Everyone thought he has enough moolah to burn! And he did. He could have been smarter and managed the political environment better. He became a victim of his flamboyance and devil-may-care attitude and insensitive ways...more than the debt — because his debt is very small compared to the debt of some corporates. He made good copy as a poster boy for NPAs. For example, he was not able to roll over his loan or restart when he came with a revival plan to relaunch.
Look at how other corporates who kept rolling over their loans or SpiceJet, which successfully revived when given an opportunity. Or when he begged for foreign airline equity but was denied due to Jet (Airways') lobbying. But the moment KFA collapsed, Jet was allowed foreign airline equity by a hasty policy change. I’m not defending fraud, if any. That can be investigated. But the airline should have been saved and he could have been removed from management. If they could pump Rs 50,000 crores for AI (Air India) why not a couple of thousand for Kingfisher and save 10,000 jobs?
Is this your first WhatsApp interview?
Yes.Thanks Captain. All the best and happy holidays.