How do you turn around a business that incurs a loss of Rs.3 crore a day, into one that makes a profit of Rs.1 crore, every single day? The quest for answers to this single question led me on a hunt to meet up with Ajay Singh, the CEO of SpiceJet and get the answers straight from him.
I was amazed that with absolutely no background in the aviation industry, he decided to buy ModiLuft a company that even Lufthansa airlines failed to run. When the Maran brothers of the SunTV fame bought the company from him, they drove the company to near bankruptcy. Ajay Singh bought back the company and turned it around to be one of the most profitable airlines in India? I asked him how and he replied, “Well, we were all young and foolish, and at that point, you feel like you can do anything,” he laughs, adding, “But I did fundamentally believe that there was a market and there was talent to run a business of this sort.” He delves deeper into his turnaround experience and shares a lot more details in the podcast.
Ajay was also the brain behind Narendra Modi’s election-winning slogan, ‘Ab Ki Baar, Modi Sarkar’.
Do listen to the podcast to peek into the wonderful mind of one of India’s savviest businessman.
Listen to my podcast with Sunita Rajan , the Head of Advertising Sales for the Asia Pacific Region at global TV and media network CNN. She has over 25 years of experience in media including roles at Star TV and BBC Worldwide.
At CNN, she oversees an extensive client base across the Asia-Pacific region and leads teams in Hong Kong, Singapore, Tokyo, Delhi and Mumbai, in addition to a network of representatives across Asia.
In this podcast, we discuss her career path, her passion for sales, what makes a great salesperson and how she manages to run a distributed global team. This podcast was recorded just before the CNN Asia Business Forum that took place in Bangalore. Listen to the conversation with Sunita Rajan.
(The article below is part of my weekly column that I write for the DTNext Newspaper)
Technology is bringing in changes to the way we travel and stay. Business models are changing in the transportation and hospitality industry. There used to be a time when you had to own a car to live a comfortable life. It gave you freedom of movement and afforded you the flexibility. However, did you know that our cars remain idle for 90% of their life? Think about it. We mostly use it for the commute from home to office and back and at other times, it remains parked at the car park at the office or at the garage at home.
John Zimmer, a student of hotel management at Cornell University, saw an opportunity to put to use the idle hours of the cars. He along with his friend created an app called ‘Lyft’ which helped car owners offer rides to others while having the ability to earn money. Now, that simple idea has spawned a company that is worth over US$ 5 Billion dollars.
The hotels have a curious case that has baffled me for long. Most people who book a hotel room only stay a few hours during the day. Most use it to quickly take a shower, dress up and rush to series of meetings. Even though you only use it for a few hours and you were never physically in the room for most of the day, you still have to pay for the entire day. That’s the way hotels operate around the world.
Vinil Reddy, who was earlier a CEO of a real estate company, saw a mismatch in what the business travelers wanted and what the industry offered. Being an entrepreneur at heart, he sensed a business opportunity. He created an accommodation space, aptly titled ‘FreshUp’, where people can stay at the hotel for a few hours and only pay for the hours they have used. He realized that there are business travelers who are day travelers. They are the ones who travel to another city in the morning, finish their meetings and leave back to their home at night. For such people, the important things are a place to rest a couple of hours, take a nice hot shower, get dressed up, use the WiFi to get some work done and head for the meetings. Vinil’s concept of FreshUp is minimalism with purpose.
We notice the same ‘minimalism with purpose’ concept with Airlines. Recently, I got to sit down with Ajay Singh, the founder & CEO of SpiceJet. When he founded the airline, most of his competitors were full-service carriers (think Jet Airways and Kingfisher Airlines) which offered meals on board. Ajay created a ripple when he began to charge for food. He realized that passengers wanted cheaper airfares and hence detached the cost of food from the ticket cost and made is optional. He focused on the bare essentials of on-time arrival and lower cost. Now, SpiceJet makes a profit of Rs.One Crore every day (yes, Every Day!) while Kingfisher Airlines is defunct.
These three case studies teach us an important lesson. By using business common sense, leveraging the power of technology and thinking outside of the box, you can create new businesses that work.
Kristie Lu Stout, the award-winning host of ‘News Stream’ on CNN is a familiar face. When I met her at the CNN Asia Business Forum in Bangalore, I was very curious to know what made her successful in her field and how she sculpted her career to become a well-known broadcast journalist. I recorded a half hour long conversation for the Leadership Podcast which I host at The Hindu Businessline. While the Podcast will eventually be published in a few week’s time (my column is a fortnightly one), here are some interesting takeaways from our conversation.
Kristie studied Journalism at Stanford University and graduated at a time when the Internet book was just happening. She got her first break at the celebrated new age tech magazine, Wired.
My Takeaway: Have clarity of what you want to do in life. Kristie clearly loved journalism and picked up a course she enjoyed.
Kristie moved to China where she freelanced for the South China Morning Post and later worked at Sohu. She started to learn Chinese at Tsinghua University. Remember that, even though Kristie is a Chinese American, she spent most of her early life in the United States.
My Takeaway: Kristie could easily have built her career in the US. After all, the rest of the World is trying to get into the land of opportunities. Yet, Kristie realized the opportunities in China and stepped out of her comfort zone to move to another country. She took the effort to learn the language and dove into studying the burgeoning Internet space which proved to be a turning point in her life as seen in the next point.
While she was focused on print journalism, her breakthrough in broadcast journalism happened serendipitously. She gave a speech at the Foreign Correspondents Club on the state of Internet in China. As part of the audience was a senior member from CNN who was impressed with her. He invited her to come over to CNN and that’s what resulted in her first break.
My Takeaway: Breaks like this one is rare. And Kristie knew it and she was determined to make it count. During our conversation, she mentioned that the learning curve was very steep. After all, she was brand new to the TV medium. I loved how she was open to learning from others and constantly improved herself that made her now a name to reckon with.
Look out for the full conversation I have with Kristie Lu Stout in a fortnight.
The 2nd edition of CNN Asia Business Forum took place in Bengaluru recently. The event had two clear focus areas. The first was centered on the burgeoning Aviation industry and the second focused on Digital & Technology.
I was particularly looking forward to the panel because I had an opportunity to study in-depth the three panelists that were part of the panel. 1) Ajay Singh, Chairman and Managing Director of SpiceJet, 2) Phee Teik Yeoh, CEO of Vistara Airlines and 3) Kanika Tekriwal, CEO of JetSetGo.
Earlier in the day, I had recorded interesting conversations with Ajay Singh of SpiceJet and Phee Teik Yeoh of Vistara Airlines as part of the ‘Movers & Shakers’ Podcast that I host on The Hindu Businessline. This helped me get an inside view of their businesses and their career growth. To me, listening to the panel discussion looked like a seamless extension of our conversation.
Here are the key takeaways I gained from the panel discussion.
Richard Quest, the ebullient business anchor at CNN, kickstarted the panel by saying the Airlines industry is a good way to become a millionaire. How so? Well, if you are a billionaire and you start an airline, you’ll soon lose enough money to become a millionaire. And am sure everybody in the audience was thinking of Vijay Mallya.
What I loved was how Ajay Singh countered that. SpieceJet is an example of success. True, SpiceJet was losing Rs.3 crores a day (yes, a day) under SunTV’s Kalanidhi Maran. But after Ajay Singh bought back the company he founded, he was able to turn it around in less than 3 years to a stage where the airline is now making Rs.1 crore profit every day. That is a fantastic turnaround.
Phee Teik Yeoh, the CEO of Vistara, the airlines founded by the collaboration of Tata Group and Singapore Airlines mentioned how external factors destabilize the growth of an airline. He took the example of airline fuel. India has one of the most expensive airline fuels and this year alone, the cost has increased by over 50%. This can eat into the profits of the airline and wipe away the thin margins.
Phee Teik agreed that the market for high-end business travel was not as high as they had expected. Vistara launched a few years ago and they positioned themselves as the choice for corporate executives. They had allocated a significant number of seats for business class and premium economy. Due to poor demand, they now had to cut back on the premium seats and increased the number of economy seats. This proves the fact that India is a price sensitive market.
Ajay Singh added a very valid point. The discerning Indian flyers want the following: 1) Fly from their city or town directly. 2) Pay as little as possible. 3) Fly on Time. If these three factors can be met, then they are happy. Anything else, like gourmet food, leg space, good looking staff is not as important as one would think.
Kanika Tekriwal, who built an amazing business on leasing the private airlines, was bullish on the future. It is interesting how she runs her business. She found that many rich individuals who had private airplanes were finding it very expensive to maintain them and they were losing money. That’s when she approached them offered a solution that will not only take care of the planes but also earn them a profit from their planes. She has her own set of pilots, mechanics, and crew who take care of the planes. The people who hire the private planes can do so without the need to invest high capital for the planes but yet enjoy the luxuries of private travel. With the number of millionaires mushrooming in India, and with not much competition, she sounded very positive on future prospects.
Overall, it was a thoroughly enjoyable session. What I loved was the display of entrepreneurship and street smart approach that the panelists displayed while narrating their story.