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.
(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.
On the SpiceJet flight SG622 from Kolkatta to Chennai on the evening of August 24th, I witnessed something remarkable.
I was absorbed in reading a magazine when suddenly, I saw an air-hostess run across the aisle. Then very quickly, I saw all the 6 air-hostesses rush to a passenger about 10 rows in front of me. The gentleman had severe shivering and could not even speak. So bad was the shivering that it looked like he was having a uncontrollable fit.
The air-hostesses quickly swung into action. While one of the air-hostesses closed the air vents, the other quickly collected their own uniform jackets and covered the shivering passenger. One went on to phone the pilots in the cockpit and update them on the emergency situation. One other air-hostess, made a public announcement asking if any of the passengers were a doctor. There was a doctor on board and he quickly swung into action. Two other air-hostesses got him a bottle of water to drink and did cold towel treatment to this forehead.
The crew raised the in-cabin temperature to a level that there was practically no chillness. It started to get a little uncomfortable but not a single passenger complained.
The crew messaged the on-ground staff and arranged for medical staff to be ready. They picked up the contact number of his brother in Chennai and phoned him in advance to tell him of his condition.
I will never forger how alert and sincere all the 6 air-hostesses were. After the plane landed, many of the passengers as they were disembarking showed their appreciation to the crew.
Years of flying has taught me which seats to pick and which ones to avoid. Its helped me make my journeys better and figured it might be useful to you too.
The following advice is intended for aircrafts like Boeing 737-800 ( Jet Airways, SpiceJet ) and Airbus A320 (GoAir, IndiGo, KingFisher and Indian Airlines) but may be applicable to many others.
The Best Seat: Want to get an Economy Class seat with as much legroom as a Business Class seat? Then use these three magic words when you check-in. ‘Emergency Reclining Aisle‘. Now Repeat that 10 times loudly.
Don’t just ask for Emergency seat, ask for Emergency Reclining. This is the second row of emergency seats that not only has the leg room but its also reclining.
As a bonus, a good looking air-hostess will come to you to read out the emergency exit instructions.
The Worst Seat: Its the row just before the emergency seats. Not only is the leg space cramped, the reclining is disabled as well. So is with the seats in the very last row. To make it worse, you have two toilets to deal with. Now you know what to avoid.
Trust that was useful. Do you have any aircraft tips to share?
I have always been flummoxed by this behavior. After the aircraft lands and the Milli-second after the seat belt sign goes off, people get off their seats as if its an emergency evacuation. They grab their luggage and stand uncomfortably in the aisle.
Everyone who stands in the aisle know that the doors don’t open for another 10 minutes. So why bother?
There’s no time advantage either. At best, they save 2 minutes but that immediately gets evened out when they are made to wait in the transfer bus and even more so at the luggage carousel.
I’ve seen this habit mostly in India and wanted to figure out the reasons behind this behavior. Here’s what I could come up with.
1) Wanting to stretch their legs after sitting for long.
2) Having a false sense of saving time.
3) Herd mentality. When you see others standing up, you do too so as not not lose any competitive edge.
But by far the best explanation I heard is from a fellow passenger who traveled with me in yesterday’s flight. He’s a Mumbaikar who now stays in Bangkok. He says its a habit that we have acquired from our days of traveling in Buses and Trains.
We usually get up from our seats much before our destination comes because we have to weave and squeeze our way through the standing crowd to edge closer to the exit door. Its a mentality that has sunk deep into us. He says we involuntarily do that even in flights.
Its the strangest answer I heard but it makes good sense.
What do you think are the reasons?