CEO of the Month: India
SpiceJet, India’s favourite domestic airline, provide low-cost flights to 41 cities across India and international destinations. Working at the helm of this highly successful company is Chairman and Managing Director (CMD) Ajay Singh, who we caught up with to highlight the success of his company and how he has revitalised it to the highly successful company it is today.
In an interview with the firm’s Chairman & Managing Director (CMD) Ajay Singh, he reveals that they are India’s favourite airline, “delivering economical air fares with a high perceived customer value across all touch-points. An emerging India is providing people the means to be airborne and SpiceJet wishes to be at the harbinger of this wonderful opportunity.” With India’s economic and business growth, the percentage of traveling population is burgeoning.
More and more Indians are traveling for both business and pleasure and everyone needs to save both time and money. SpiceJet’s vision is to address that and ensure that flying is for everyone. Singh stresses that the firm are a low fares budget airline, connecting important city pairs across the length and breadth of India, and indeed neighbouring countries. “We maintain an excellent on time performance with a clear customer centric approach. With majority of the 400 plus airports in India not able to handle even a narrow bodied aircraft, we choose to additionally operate a turboprop (Bombardier Q400) to cater/connect to dozens of tier 2 and tier 3 cities” he explains.
“This provides additional feed to metro routes. With the turnaround of the airline, we are also planning to add ancillary services such as door-to-door cargo, and pitching further for ground-handling for self and other carriers” he adds.
Giving some interesting background as to how the firm took off, Singh reveals that SpiceJet Ltd’s first take off was eleven years ago when a commercial flight operated between New Delhi and Ahmedabad. “We currently operate 300 plus flights to 41 destinations, including 35 domestic and 6 international ones. With a young fleet of 25 Boeing 737NG and 14Bombardier Q-400s; and a smart expansion plan, we are comfortably placed to deepen our footprint within the Indian market and gradually expand within short-haul overseas markets” he goes on to explain.
Across their company, whether it is crew or ground staff, the focus is on performance. Each SpiceJet employee is groomed to be smart, friendly, efficient and well-informed, ensuring that any interaction will make our passengers feel welcome and looked after. Experienced pilots, well-trained cabin crew will make every flight a comfortable one. Above all, the philosophy is no-frills but high-performance.
And of course, SpiceJet invests heavily in safety, impeccable maintenance and a high level of expertise. Experienced pilots, engineers and maintenance crew go through rigorous training and are hand-picked for their technical knowledge and expertise. So passengers can rest assured that there is no cut-back in this key area of modern day flying.
In order to ensure that they reach the high standards they set themselves, SpiceJet’s key management personnel are all senior, seasoned professionals and have significant international experience in both launching and managing low-cost airlines. With thousands of cumulative hours in the industry, the management is committed to bring to customers in India all the benefits of the global revolution in the skies. SpiceJet aims to make travel comfortable, affordable and refreshingly efficient experience for all.
As Chairman and Managing Director (CMD), Ajay Singh is no exception to the experienced professionals working at SpiceJet. Alongside his role at SpiceJet, he serves as Chairman of Argentum Motors Private Limited, and Indian car manufacturer, and also serves as a Director of Intel Constructions Private Limited, Crosslink Finlease.
When quizzed as to how the business is faring and the challenges he faces at the helm of it, Singh reveals with relish and enthusiasm that SpiceJet in its life has played two innings - using a cricketing analogy. “The turnaround story of SpiceJet since the new management took over in 2015 is well recognised” he stresses. Developing this point, he goes on to say that in FY16, they posted the highest ever annual profit in the entire history of their operations and with a significant increase in revenues from former years - all attributed to Customer Excellence, exemplary on-time performance and a rapidly growing Ancillary Income Stream.
“Unit cost reduction was also achieved through contract renegotiation, higher resource productivity, and restructuring of operations. This is the fifth consecutive profitable quarter for us and we have been recording a load factor of over 90% consistently over the last 12 months, the highest ever in the industry. We have the best utilisation of fleet in the industry. The morale within the organisation is at an all-time high and so is the confidence of our partners, suppliers and (aircraft) lessors” he goes on to explain.
“Our adherence to operational best practices has won back our lost glory. The challenges we face today are to further prune costs by renegotiating many erstwhile contracts related to aircraft leasing, engineering, maintenance and other departments” he adds.
But prior to the undoubted success in his current position, Singh tells us that he has been exposed to a wide variety of sunrise sectors in a resurgent India post liberalisation of the country. “I was fortunate to be given leadership positions within the government in telecom and IT, and information and broadcasting sectors. The inheritance of learning through both planning and execution roles helped me replicate that in aviation. I have also worked in leading Indian companies with an entrepreneurial ethos and execution demanded from a professional” he explains.
From an education perspective, Singh graduated with a Master’s in Business Administration from Cornell University and holds undergraduate degrees in Law from Delhi University and a Bachelors in Technology from the Indian Institute of Technology.
Ultimately, Singh’s work in rescuing the company has been a phenomenal success, and the continued growth of the airline is certainly something to keep your eyes open for in the future.
Turning to the future, Singh says the firm would like to add 15 aircraft a year from 2017 and thinks that they can easily do that. “We plan to embark on a major fleet expansion and increase existing frequencies. Wet leases that expired recently are being replaced by dry-leased aircraft” he reveals.
“We are working on a sizeable manufacturer order. While we are in talks with both Airbus and Boeing, they are mindful of the fact that we need early deliveries. As the competition is expected to become bigger, fuel efficiency and maintenance of the aircraft will be the key elements of success from a technical perspective.
“Apart from fleet expansion, we are subsequently targeting for the next level of financial growth, hence regional connectivity will continue to be one of our key focus areas as we increase frequency to existing routes and create new ones” he adds.
And finally, in terms of the challenges that lie ahead for Singh in 2016 as a Chairman and Managing Director (CMD), this concerns “rebuilding customer loyalty, further network rationalisation and a clear focus on revenue has worked well for us. Oil prices are a looming threat to offering competitive fares as they have increased almost twice over the last five months” he stresses.
The last word goes to Singh, who concludes: “Additionally, India’s infamous position as one of the highest tax regimes for ATF only adds to the burden. Attracting good talent and upskilling existing staff are some of the soft investments we would need to make to
enhance our product.
“We would continue to innovate on our product through both capacity up-gradation and soft interventions. The customer experience needs to be seen as one in a constant state of evolvement whilst additional revenue generation opportunities need to be explored both on-and-off ground. A budget airline may offer lower fares but introduce indulgent opportunities for customers at a price.”
Name: Ajay Singh