Financial Daily from THE HINDU group of publications
Monday, Feb 13, 2006
`Simplicity, transparency will be our USP' Mr Bruce Ashby, CEO and President, IndiGo
The soon-to-be-launched low-cost airline IndiGo created a stir in aviation circles last June when it announced at the Paris Air Show its decision to buy 100 Airbus A-320-family aircraft. The airline's newly appointed Chief Executive Officer and President, Mr Bruce Ashby, moved from US Airways, where he was Executive Vice-President, for marketing and planning to join IndiGo. At US Airways, Mr Ashby was responsible for various key functions, such as corporate development, alliances, financial planning and analysis.
Mr Ashby brings with him years of experience, including a long and successful stint with Delta Airlines and being on the Management Board of Star Alliance, which includes 15 code-share carriers.
IndiGo, jointly promoted by InterGlobe Enterprises Ltd and Mr Rakesh Gangwal, who during his two-decade long career in aviation has worked in senior management positions with leading airlines, including United Airlines, Air France and US Airways, has been given the sign 6E. Mr Ashby spoke to Business Line about what IndiGo plans to do.
Excerpts from the interview:
What plans do you have for IndiGo Airlines?
Since last August, when I joined the IndiGo team, we have been busy finalising our agreement with Airbus Industrie. The delivery of the aircraft will start this July. We had the option of starting operations earlier than July with leased aircraft, which was tempting, but expensive. This is because you would have to lease an aircraft for three-to-five years and you could have got aircraft with different engine types. Since we are a low-cost airline, this would have been an expensive proposition.
We have now decided to launch the airline with purchased aircraft. The first Airbus A-320 should arrive between July 1 and August 5. It is difficult to give a firm date yet, though the exact delivery dates will be known soon. We are targeting a mid-July take-off.
What are the plans for induction of aircraft?
After the induction of the first aircraft in July, we will induct six more aircraft this year, followed by another nine in 2007. All the aircraft will offer 180 seats in economy class. Each aircraft will do about six departures a day, and we are looking at using the aircraft for 11-12 hours a day.
The airline has ordered 100 Airbus A-320-family aircraft that includes the Airbus A-321, A-319 and A-320 aircraft. What aircraft type will be inducted first?
It is likely that the first 20-25 aircraft we induct will be Airbus A-320s.
What amenities can a passenger travelling with IndiGo look forward to?
We will offer beverages but not hot meals. The cost of delivering hot food to the aircraft and keeping it hot pushes up the cost. Incidentally, this is similar to what several other airlines, such as Ryan Air, are doing. But we are open to the idea of offering a snack service on the flights.
There will be no in-flight entertainment. However, the aircraft have a provision for providing in-flight entertainment in case the management decides to offer this at a later stage.
What are the routes that the airline is looking at?
We are in the process of finalising the routes. We will be flying from metro to intermediary cities and there are so many routes that we could look at. We could fly, say, Delhi-Ahmedabad-Mumbai or Delhi-Indore-Chennai.
However, one thing is clear; the first aircraft will fly out of Delhi. In the first few months after launch we plan to service about a dozen cities including metro and intermediary points. Delhi and Mumbai will definitely be on our list.
We have submitted our initial schedule to the Directorate-General of Civil Aviation (DGCA).
What pricing model does IndiGo plan to follow?
We will offer fares that are quite a bit lower than those offered by traditional legacy carriers. We will be at the low end of the fares being offered today. Our fares are likely to be similar to what the existing low-cost carriers are offering.
There are likely to be three-four categories of fares with the highest likely to be if you report at the airport just before the flight.
What will be the USP of IndiGo?
We promise great simplicity and transparency.
Is the crew in place for the airline to take off?
We have enough pilots to fly the first few aircraft and also technicians and engineers. We have just started the process for the induction of cabin crew. We have also got space for handling the first year of operations. Besides, we have entered into `powered by the hour' agreements with manufacturers and for avionics, among others. We will undertake the line maintenance of the aircraft.
What will be the points of sale for tickets?
We are not planning to use any Centralised Reservation System to sell our tickets. The sales will primarily be through the Web and a call centre. For those who would rather not give credit card details on the web there will be the option of going to a particular place to pay and get the tickets.
Is the airline replicating the model followed by South-West Airline in the US?
We are not replicating it entirely but parts of it. Simplicity and fairness are two hallmarks of South-West Airline that we will be emphasising on very strongly in IndiGo.
However, some procedures will be different. For example, we will offer seat assignment to the passenger something that South-West does not.
The logo of the airline has not yet been unveiled.
We are in the final stages of finalising it.
What is your reading of Jet Airways' purchase of Air Sahara?
There are some concerns, but I do not think it is particularly monopolistic. It will not affect our business model. There is the issue of scarcity of resources and like all low-cost carriers we are interested in resources to get started. We are keeping an eye on this.
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