It’s not often you see the CEO of a low cost airline in a tuxedo. But that’s exactly what Aditya Ghosh was dressed in, when I last met him at the CAPA Aviation Awards for Excellence in Singapore last month – where Indigo Airlines won the Best LCC award. This was the second time we had met, after meeting at another award ceremony in London earlier in the year, where he carried a trophy home too.

Indigo has been on a streak. After starting operations just five years ago domestically and recording one of the best on-time performances in India, we predicted three years ago that the airline would end up being one of the best in the country (watch interview with CCO), and indeed they’ve gone on to become the second largest in India. They have recently started flying international and recently placed the largest aircraft order in history.

With such  growth comes the need to raise awareness internationally, which is what their latest advertisement seeks to do.

A Runway Musical – an original, or is it?

Touted as the world’s first Runway Musical, we found out from our good friends at Bangalore Aviation that “the ad was produced in Los Angeles, under the direction of Steven Antin, director of the Christina Aguilera musical feature ‘Burlesque’ and choreographed by Denise Faye of ‘Chicago’ fame.”

It’s got an edgy feel to it. Very much like Virgin Atlantic’s early advertisements – which puts the Indian airline on the global map. You have to watch the advertisement to get a feel for it.

Click here to view the embedded video.

While I personally liked the latest campaign for being bold and unlike most other airline advertisements we’re used to in Asia, I was also sent another video from which the Indigo campaign is clearly inspired from. So while the concept is not completely original, I’d give credit to the Marketing folks at Indigo and their agency for at least trying to be different and standing out. After all, they’ve clocked almost 7,000 views on Youtube just a couple of days after releasing the video.

Click here to view the embedded video.

The evolution of the “on-time” airline brand

You’ll appreciate the latest campaign even more when you see what the brand has evolved from. You’ll see (below) that the 2009 campaign was animated and about on-time performance. In 2010, it was still about on-time performance, but had more of a Broadway musical touch to it. And the latest (above) still retains that brand consistency of on-time performance, but certainly catered towards an international market.

Indigo Airlines 2010 advertisement – catered to a domestic market

Click here to view the embedded video.

Indigo Airlines 2009 animated advertisement – touting on-time performance

Click here to view the embedded video.

We like the brand evolution. What’re your thoughts? Let’s discuss in comments and on Twitter (@simpliflying)

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I flew from Mumbai to Delhi yesterday on Indigo Airlines, a leading domestic budget carrier in India, known for its tongue-in-cheek branding.

I have a habit of being engrossed in a book or a newspaper during the take-off and landing sequence on every flight I take. On the flight yesterday, once the safety demonstration was done, the stewardess walked down the aisle checking our seat-belts. As she passed me, she realized I was reading and reached out to turn on the reading light for me.

Let me write that again. Without even me asking her for anything, or even making eye contact with her (remember, I was engrossed in reading), she turned on my reading light, gave me a smile and walked away.

It was an aha-moment for me. Having taken over 20 flights in the last couple of weeks (including flying First Class), this was the only thing that stood out. Thanks to such a simple gesture, which made me feel special, I can say with confidence that I’ll be inclined to fly Indigo when I’m in India. Of course, they greet me by my name too, when serving food – as I wrote last year.

Driving customer loyalty isn’t that difficult after all, isn’t it? Just do the small things right. Great job, Indigo!

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• How AirAsia is rocking it in India, and how airlines in India can leverage their entry

How do you think Air Asia permeates a market and wins it? Some interesting anecdotes?

When it comes to new market launches, AirAsia is one of the most innovative, not just in the region, but in the world. And I can say that confidently, having worked with a lot of airlines around the world. They don’t just have advertisements, but connect with the customers at a deeper level, having conversations about topics relevant to them, and yet creating a splash.

Take the recent Mumbai flights launch, for example. Not only was there pomp and show during the first flight, and even Bollywood was invited, at the same time, over the last couple of months, AirAsia built up a lot of interest about Mumbai and India through candid articles on its very popular blog, Planely Spoken, like “Mumbai in 3 days and 2 nights“. On the day of the launch, there was even a special Twitter hashtag #AAroxMumbai where followers could participate in the happenings.

Moreover, when AirAsia enters a market, it tries to dominate it, first by entering multiple cities, then by adding frequencies to those cities such that it is the dominant player. Trichy, AirAsia’s first Indian destination has three flights a day to Malaysia. The airline will have almost 150 weekly flights to India before the end of the year, which will make it the 2nd most dominant airline in India, after Emirates.

It is this out-of-the-box marketing strategy, coupled with complete route dominance that makes AirAsia a formidable player in any market.

They have openly admitted loss in Middle East market entrance. Do you think all other next door markets are pretty exhausted by them so India will be key to there future?

Personally, I don’t think they’ve “admitted loss”. What they’ve done is retracted out of the market – for now. That because just a single route to Abu Dhabi couldn’t be sustained on its own, without dominating other nearby destinations. They will probably re-enter when their new A330s arrive. So, it’s not really exhaustion, but the opportunity that’s leading them to India. They’ve already conquered Southeast Asia, China and even the Australian cities they’re in.

India is the next logical choice, with AirAsia’s destinations like Bangkok, Singapore, Bali and Kuala Lumpur already popular among Indian tourists. The Indian tourist is price sensitive, and time insensitive. This means they will hunt down the cheapest bargains, even if the journey takes a little longer. This fits in very well with AirAsia’s model.

How can the Indian government promise a level playing field?

I think AirAsia entering India is a double-edged sword. While its entry is a boon for the Indian traveler and tourism in India, it might spell doom for some of the Indian airlines. Already, Air India and Jet Airways have had to slash prices to destinations AirAsia flies to. The onus now lies not on the Indian government, but the individual airlines themselves, to innovate and come out on top.

Two airlines I have confidence on are SpiceJet and Indigo. Especially the latter, given its grandiose growth plans for the next couple of years. Both airlines can soon fly internationally, and though SpiceJet is muted about its destinations, Indigo has expressed clear desire to head down to Southeast Asia – where Air Asia and Tiger Airways loom. On the west, it’s the threat of Air Arabia and FlyDubai.

A smart move by the Indian budget carriers would be to forge some sort of an alliance with AirAsia. Though code shares to India are a remote possibility, assuming the purist LCC models, a much more likely scenario would be to synchronize timings of their flights, or have a marketing tie-up for destinations beyond those the Indian carriers will fly to. For example, a passenger might fly Indigo from Delhi to Singapore (a route AirAsia is not authorize to fly), and AirAsia from Singapore to Bali. This becomes a win-win situation then.

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Consistency not only in the sky, but also on the ground

When someone flies Indigo Airlines, what he looking for? Sanjay believes that it’s not a five star flying experience. He’s looking for an easy, hassle-free travel experience. And Indigo lives up to the expectation. Not only do they have Queue-busters – mobile check-in counters that Sanjay mentioned in the first part of his interview last week, but they are also the first airline to have welcome announcements on the “coach” that takes passengers to the aircraft. It makes them feel that the journey has begun.

Why low pricing isn’t sustainable?

Sanjay feels that the current spate of low airfares in India is a short-term phenomenon and it’s a ploy to get people in the air once again. Such prices cannot be sustained in the long run. Hence, once the prices rise (this has already started happening), the challenge will be for airlines to keep the passengers in the air. And how does Indigo make this happen? By delivering a consistent brand experience, over time.

As for Sanjay’s predictions for airlines in India in 2009, he feels it’ll not be an easy year for the airlines in India in 2009, but those who keep their costs low, and keeps the customer coming back for more will emerge stronger in the long run.

I invite you to listen to the second half of Sanjay’s interview right here, on SimpliFlying.

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SimpliFlying: India has a lot of first-time fliers. What’s different about marketing to first-time fliers vs frequent fliers?

Binit: First time fliers may be quite apprehensive, and they require reassurance that the experience will be a pleasant one. Apart from the actual act of flying, in a market such as India flying for the first time can involve crossing social barriers which can in itself be quite daunting. Low cost carriers have made flying affordable for some who might otherwise never have dreamt that they could fly, something which was once a preserve of the elite.

However, apart from Air Deccan, which pitched itself as the common man’s airline (see video below), it is not obvious that any of the other carriers have made an effort to specifically appeal to first time fliers, but end up getting them anyway. Air Deccan’s ethos was built around first time fliers and their marketing included a wonderful television advert that captured the mixture of nerves and excitement that a first time flier feels and portrayed itself as the airline that understood and would take care of such passengers.

SimpliFlying: India is well known for disorganized retail and non-traditional channels. Which are the key channels through which Indian airlines build its brand awareness among the target markets?

Binit: Indian carriers have generally pursued quite traditional channels for brand building, namely print media advertising and outdoor billboards. Television has not been a major medium due to cost. Kingfisher has probably adopted the most diverse approach – the airline has been associated with sponsorship of the Indian Premier League and Formula 1, whilst it also benefits from the fact that Kingfisher is a brand beyond the airline and it benefits from the spin off of initiatives such as the Kingfisher Calendar and promotion of its water and beer. Air Deccan when it first launched made efforts to promote its presence in the smaller towns and villages by sending branded vans into rural India, which also doubled as booking locations.

SimpliFlying: Do you think a strong brand can soften the impact of downturns on airlines?

Binit: In an economic downturn, where people are reducing consumption it’s questionable whether strong brands will prevent travellers from flying less per se. However, individual airlines with strong brands may benefit in two ways 1) they may be in a position to maintain stronger yields because of the value of their brand and 2) in times of uncertainty, passengers may prefer to travel with a brand in which they have greater confidence and trust – therefore a strong brand allows them to increase their market share even though overall industry traffic may be declining.

SimpliFlying: Which Indian carriers will be the first to emerge out of the crises. What puts these in such a strong position?

Binit: At present all Indian carriers are losing money and have weak balance sheets. However, amongst the 3 full service carriers, Jet Airways and Kingfisher, have excellent product, strong brands and loyal followings. Air India on the other hand is facing severe problems with its integration with Indian, and political interference and lack of direction mean that the national carrier is likely to continue to struggle. Amongst the low cost carriers, as most are privately held it is difficult to know the exact state of their health. However, Indigo and SpiceJet have established themselves as consistent and reliable operators.

SimpliFlying: What role does the travel agent play in the Indian Industry?
Binit: In the full service space, travel agents control about 90% of sales. In the case of low cost carriers this figure is probably closer to 70-75%. In fact it is understood to have dropped lower, however aggressive promotion by Online Travel Agents saw the travel agent community reclaim some its market share.

SimpliFlying: How big a constraint is infrastructure in Indian carriers’ growth?

Binit: Airport infrastructure has certainly been a constraint in the last few years – many airports are operating at well beyond their design capacity resulting in delays, congestion and a poor passenger experience. The delays mean that airlines are unable to operate efficiently which increases costs. However, a major upgrade and modernization program is underway and improvements are being seen. It will still be a couple of years before all of India’s major metros have world class airports, but we are on the way.

SimpliFlying: What role will foreign carriers have to play in the Indian market, given the regulations?

Binit: At present foreign airlines are barred from holding any equity in an Indian carrier – although foreign non-airline entities may take a shareholding of up to 49%. In light of the poor financial health of Indian carriers, there is a desperate need to raise capital. The most likely investors in the current environment are those that have a strategic interest, namely airlines. As a result, the government appears to be set to relax the restrictions to allow foreign carriers to hold up to 25% in Indian carriers. There are likely to be a number of interested parties if this was to happen, which apart from capital would bring in much needed expertise into the sector.

SimpliFlying: Do you see more consolidation in the Indian aviation industry?

Binit: There are too many airlines in India at present and with their current financial state, consolidation is inevitable and desirable, either through merger or through market exit.

SimpliFlying: What do you see as the biggest threat and the biggest opportunity in the Indian market?

Binit: The biggest threat is that airlines do not take the necessary steps  to reduce capacity. If they fail to do so, the likelihood is that there will remain an urge to discount heavily to fill seats, the result of which will be to diminish overall yields and revenue. The biggest opportunity is the fact that we are only at the beginning of the growth curve. Even today, after domestic traffic has tripled in the last 5 years, it is estimated that only 2% of Indians travel by air in any given year. The growth potential is enormous.

SimpliFlying: Your predictions for aviation in India in 2009?

Binit: 2009 is going to be another tough year for Indian carriers with demand expected to remain soft for the first half and picking up from around Q3. However, fuel prices are low, airports are improving and if airlines can remain disciplined about capacity they can at least stem losses, even if they can’t return to profitability. The key is to stabilising the situation, raising cash cover to cover requirements and being ready to take advantage of an expected upturn from 2010 onwards.

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When the stewardess, Neha Shenoy, came to ask me if I wanted any drinks or sandwiches, she greeted me by name. Yes, you read that right. I was asked, “Mr. Nigam, how’re you doing today? Would you like to have some sandwiches…?” I was bowled over. It was the first time I was being greeted by name, in an Economy Class on a domestic sector in India. Something that’s usually a feature of international Business Class on reputed carriers like Singapore Airlines had somehow made its way to this Indian budget airline. And very simply too. Neha was carrying a copy of the passenger list on her cart, and just read out my name from there. A simple method. But very, very effective. I got a drink from her.

But that was just the beginning of my fascination with the airline. I managed to get in touch with a senior executive at Indigo and had a candid chat with him about what makes the airline so successful that it has captured 15% of the Indian market in just a short time.

Three tenets of success for Indigo Airlines

Sanjay Kumar has been with Indigo Airlines for almost two years now, having previously made SpiceJet a runaway success upon launch in India. Sanjay is the Chief Commercial Officer at the airline and is responsible for generating revenue and building a sustainable business model for the airline.

When I asked him what makes Indigo so successful, he mentioned three key tenets for success: affordable fares, on-time performance and hassel-free travel. These may seem like big words, but I personally experienced this while flying the airline. The fare was the second-lowest on the sector I flew, and I picked the flight because of its superior on-time performance as compared to others on the same route. In fact, even in-flight, there was emphasis on these three tenets, especially on-time performance. As for hassle free travel, I found the planes to be extremely clean and soothing music was being played upon boarding and alighting from the plane.  Even the turnaround in Ahmedabad was extremely efficient, which took less than 15 mins!

Focus on excellent customer service pays off

It’s Indigo’s emphasis on ensuring a great customer experience during interactions with the airline that is doing wonders for the brand. Sanjay shares that special attention is paid to ensuring consistency in service across the A320 fleet and the experience at the airport matches that on-board the plane. In congested Indian airports, Indigo has roving “check-in counters” where passengers with only cabin baggage can check-in with an Indigo official with a handheld device, rather than lining up at the check-in counter. Another simple, yet effective measure.

Personally, I feel Indigo is on track to be one of the best airlines in India, especially with such experienced professionals like Sanjay at its helm. And I’m not alone in this thinking.

For now, I’d like to invite you to watch Sanjay’s interview and hear straight from the man himself, on how he and his team of less than 20 have created an airline in India that everyone seems to be talking about. Do turn up the volume a little.

What are your thoughts about Sanjay’s strategies? Are they easily duplicatable around the world? Why is it that some airlines like those in the US seem to have stopped caring about customer service? Let’s discuss…

Do look out for Part 2 of this interview this Friday, when Sanjay talks about Indigo’s brand strategy and the Indian aviation scene.

• Building a strong Indigo Airlines brand, and outlook for 2009
• CEO reveals what makes SpiceJet a leading airline in India in a frank interview
• Indigo Airlines goes international chic with latest brand campaign – the model of a modern global airline
• Little things that make an airline brand stand out. Good job, Indigo!
• Building the “spiciest” airline brand in India: Interview with SpiceJet COO

…

Jet Airways recently hinted that the worst is over for them and they expect to break even again in the middle of this year. And this is mostly because of the drop in fuel prices (obviously!) as well as the prudence shown by the management in cutting unprofitable routes, including that the San Francisco. And I don’t see this as an isolated case.

After my recent interactions with key airline executives in India, including the CEO at SpiceJet, it is my belief that airlines in India will not only be one of the first few to emerge from the recession, but also come out the strongest. Here are three key reasons for this conviction.

1. Airlines that stand by their customers in bad times win hearts – brand matters

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Just look at what’s happening in the western airlines in this recession. US Airways recently started charging for blankets, and they already charge for water (which can even be a health hazard!). Ryanair is famous for being the most hated airline in Europe, since it hardly takes care of its customers. Interestingly, bad times have not resulted in a disregard for customer service in Indian aviation.

Recently when I flew from Bangalore to Jaipur on Indigo Airlines, I was greeted by my name before being served soem beverages. Now, that’s a first. I’ve never been greeted by my name in an Economy Class on any airline before, let alone on a low-cost carrier! Jet Airways recently won the Best First Class award, and Kingfisher does everything it can to uphold its 5-Star Airline status.

Did someone forget to tell these airlines that “we’re in a recession”? Probably not. But their focus on keeping the customer happy will pay off in the long run. Those who’re still flying will never ditch them. And when good times return, these same happy customers will generate enough brand awareness through word-of-mouth to bring in new passengers.

2. Being nimble and resilient pays off

Unlike other airlines that’re expected to do well in the recession, especially Middle Eastern ones, most airlines in India do not have any special privileges like reduced oil prices or backing from a government with deep pockets. This has forced them to act on their own to cut costs to remain aflot in these difficult times. And they’ve done so smartly too. Instead of bothering the customer with frivolous charges like in US airlines, Indian carrier have cut costs where it matters.

Kingfisher Airlines has swiftly postponed plans for more overseas route launches (Singapore, Hong Kong) – since they tend to be resource heavy at the beginning. Jet Airways too has not shyed away from cutting glamorous but bleeding routes like that to San Francisco. Moreover, they’ve both either delayed the delivery of new aircraft, or leased them to airlines like Turkish and GulfAir. Most airlines in India have switched to focused marketing efforts, rather than blanket campaigns to get more bang for the buck. And Kingfisher and Jet Airways have set aside their competitive aspirations to forge a code-share alliance to save costs – as Lisa Markovic explained in a recent interview with SimpliFlying. It is this resilience and fast action that will pay off well in the end.

3. It’s the economy, stupid!

In the last 50 days, I’ve spent a considerable amount of time in New York, Singapore and Delhi/Bangalore. And the word “recesssion” has disappeared from the local vocabulary in that order too. India’s GDP will grow 7.1% this year, according to data released today. In what way is this a recession? At best it’s a slowdown from previous years’ growth of close to 10%, but c’mon guys…this is not a recession. And if anyone has any doubts, just head over to Marthelli in Bangalore or Gurgaon, just outside of Delhi, to dispell all the myths. And this economic growth translates to the aviation industry too.

Talking about the Indian operations, Kenji Sugino, Director – Sales, Administration and Marketing, ANA recently said “Despite the global slowdown, India is one of the growing markets for ANA. We are positive about this year and are expecting good load factors and sales margins. We are going to play strategically in the Indian market this year.”

More than anyone else, it’s the Indian carriers that will reap the best rewards of a still-active Indian economy, if they play their cards right. And till now, they haven’t let most people down when it comes to crises handling.

What do you think? Are Indian carriers indeed doing it well, or is this a mirage? How soon do you think airlines in India will recover, and which international airlines would give them competition? Let’s discuss…

Feel free to share this article with your friends if you thinks they’ll find it enriching. At the same time, I’d like to invite you to subscribe SimpliFlying by email or RSS as well.

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