SimpliLeader: Sanjiv Kapoor, COO at SpiceJet, on Bombardier Q400 Fleet, the Brand and the Future of the Airline.
As part of our SimpliLeader series, in which we showcase the best minds in aviation, we met the Chief Operating Officer of SpiceJet, Sanjiv Kapoor. Sanjiv discussed matters ranging from social media to running of the airline and branding in Part 1 of this interview. Here he talk about the challenges facing SpiceJet; the Q400 fleet; and the resurrection of the brand itself.
Here’s Part 2 of our conversation, followed by edited excerpts below the video:
SimpliFlying: When SpiceJet launched Q400 operations, there were high hopes from it. There were plans of connecting smaller cities with bigger metros, and now we are hearing about those operations possibly being shut down. What went wrong?
Sanjiv: Well it is not shut down, all options are on the table. Strategically I think Q400 plays a useful role. It allows us to fly to bases that jets don’t fly to, allows us to grow markets which are small, allows us to fly where others don’t fly to. So there is a strong strategic rationale for having that aircraft. But of course it also adds complexity. It brings the mantra that an LCC should not have aircraft of more than one type. Those are the negatives, but the biggest challenge we have had with Q400 is maintenance costs. The maintenance contract that we signed with Bombardier in hindsight wasn’t the best contract for us.
The reliability of the aircraft in earlier years also wasn’t up to what we had hoped, which forced us to fly a lot less, apart from technical groundings, delays etc. We have resolved much of that and we are in discussions with Bombardier and hopefully close to resolving and fixing the contract. And if all goes well, I think the aircraft will stay. If we leave aside our maintenance costs — if we can fix those — it is not a bad aircraft. But if we are unable to fix those then I think all options are on the table including exiting the fleet.
Strategically the Q400 plays a useful role. It allows us to fly to bases that jets don’t fly to, allows us to grow markets which are small, allows us to fly where others don’t fly to.
SimpliFlying: Tell us about SpiceJet’s initiatives on Social Media. We saw the other day the Holi video that you uploaded, and similarly there are many other festivals that SpiceJet celebrates. How does that add another dimension to the brand?
Sanjiv: We want to humanise the brand. We want to convey the message that look SpiceJet is an airline like other airlines but we are not robots, we aren’t machines, we are actually human beings who want to reach out to other human beings, in providing the service to the people. It’s by the people, for the people. So we want to demystify this whole thing, we want to connect more directly, and we want to convey the warmth and the passion we all feel for the airline directly to customers and social media allows you to do that.
The Holi dance we did at the Delhi Airport this year captures the spirit and confidence of our group. Three months ago people said we are gone, but not only are we back, but we are also confident and passionate. The crew is committed. There was a period for a couple of months when salaries were delayed because of the crisis, and that did not break the spirit at all. Twitter is a great way to get that commitment out and share it with the public.
Similarly, we have done many campaigns on twitter. For Women’s day we had our staff, two pilots and two cabin crew do an interactive Q&A with people on Twitter and it was fantastic. Last year, we had from people IT and other areas. Twitter is fantastic for us to convey our brand characteristics. Facebook is great too but Twitter is more immediate and more unforgiving because you can’t control who comments, so you are open to all kinds of feedback, bouquets and brickbats. But it keeps you grounded and real.
There was a period for a couple of months when salaries were delayed because of the crisis, and that did not break the spirit at all. Twitter is a great way to get that commitment out and share it with the public.
SimpliFlying: How would you describe SpiceJet’s resurrection as a brand?
Sanjiv: SpiceJet has always been about bringing flying to the masses. In some sense that’s what every LCC says, but I think after Air Deccan, we have been closest to actually representing that — we are bringing flying to everyone. I know it’s a slogan used by another airline but it is an English phrase. Our actions over the years have proved that we are a true LCC. We have front 5 rows with more legroom, called SpiceMax because there are many corporates flying and we want to make the product a little more attractive for them, for a small premium. At the end of the day, SpiceJet stands for providing value and affordable service. Now we have become a market trendsetter in terms of pricing, promotions, branding. It is interesting and amusing that whenever there is news about airlines in India, the photo is of a SpiceJet aircraft. Even if the topic is as generic as fuel prices. We punch above our weight in terms of media presence.
SimpliFlying: Tell us about the Holi dance. The DGCA took exception to it. Last year you did it in the aircraft and this year in the airport. Tell us about your consumer connect strategy.
Sanjiv: We want to represent a brand that conveys the passion we feel for it, and the passion is expressed in every possible opportunity. The passion with which we celebrate festivals, the way we connect with our passengers, and the delight of saying that this is a fun airline. Spice is in our name and we are a spicy airline. Last year, we did the Holi dance onboard — many airlines do similar events. In all honesty, we did it as a surprise, and we surprised even the DGCA. In hindsight, we could have taken them into confidence earlier, which we should have. Eventually the concerns they had were addressed and there were no safety issues. They understand that, it’s just that it was done for the first time in India so they were taken aback.
This year we did not want to do it onboard because it would have been too predictable. We did a semi flash mob at the Delhi Airport and it was fantastic because it was held in the waiting area and 70% of the passengers were travelling in other airlines at that time. The way the dance was done was so passionate, colorful and lively that I had passengers coming up to me to ask does SpiceJet fly here, is that your new uniform, so I really think it was a huge success. We love it, and now under new ownership, Ajay Singh loves it too. One of the things he doesn’t want to change is the passion and the spirit of the airline. This is uniquely SpiceJet. During Diwali we also had an a Capella group roaming around the Delhi Airport singing. We are truly an airline with a difference, with colour and with spice.
We want to represent a brand that conveys the passion we feel for it, and the passion is expressed in every possible opportunity. The passion with which we celebrate festivals, the way we connect with our passengers, and the delight of saying that this is a fun airline.
SimpliFlying: What’s next for SpiceJet?
Sanjiv: We need to get back to the path we were on until about October 2014. We were gaining passengers, gaining market share, and very importantly, cutting our losses significantly year over year. I think we ran into crisis that primarily occurred because of funding which was suspended. We had two years of record losses previously, the funding which was expected did not come through and we got into a crisis.
But prior to the crisis we had become the no.2 airline by market share in India, across all airlines. We had recused losses by 60%, had improved our brand, our product and we had been innovative in various things. From food to the uniforms of the crew, to advertising and everything else. We were getting a lot of feedback from corporates saying that you guys are like a new airline and we would like to fly with you, etc. We lost some of that during the crisis in October, and especially during November 2014 to January 2015. So now we need to return to the path we were at, while rebuilding our fleet. We need to rebuild confidence with the public, especially the corporates. Leisure travelers come back to you if they get a good deal but with corporates you need to rebuild that confidence.
We are working really hard on that. We are re-launching the on-time guarantee; we will be launching SpiceMax, offering seats with extra legroom. We have just introduced a new menu on-board, as well as rejigging our network to suit corporates more. We are not a corporate airline but we need to make up for lost ground. We will also be going to 26-27 Boeing 737s during the summer, increasing that to 34-35 by the end of this year — and we intend to keep growing after that.
Editor’s note: SpiceJet introduced weekend uniforms which had attendants wearing jeans (not supplied by the airline) and official airline t-shirts. Besides making the crew more approachable and friendly for passengers, it also reduced uniform costing for the airline through an innovative and interesting measure.
SimpliFlying: Do you think flash sales are here to stay?
Sanjiv: Absolutely. It is a standard tool used by all airlines — not just LCCs — all across the world to fill seats that otherwise would go empty. The airline seat is the ultimate perishable commodity, once the aircraft takes off, the seat is gone. But you need to do it right. As long as you do it right, and don’t dilute seats that would otherwise sell at a higher fare. And you segment your customers so less price-sensitive customers should not be the one benefiting from it. It should be the people who would otherwise not fly who benefit from this. You make sure you maximise your yields closer to the date of travel. It is an integral tool that needs to be leveraged; and ultimately the proof of the pudding is in the numbers. Our unit revenue has increased sharply, year-over-year. Proof is also what our competitors do, as during crisis from October 2014 to January 2015, we did no sales as we were going through our challenges, but every competitor of ours continued to do them. While they first criticised us, when we started last year, I think they saw the numbers and figured it worked really well for them, because it’s the right thing to do. Right thing to do, if done right.