‘We just want to run a good and strong airline’

Jet Airways will complete 25 years of operations on May 5. The airline, which was started by former travel agent Naresh Goyal with just four Boeing aircraft leased from Australia, now plans to embark on the next leg of its journey. CEO Vinay Dube discloses how Jet proposes to grow profitably, maintaining 8-10% CAGR for the next five years, acquiring new generation aircraft and cutting costs.

What Mr. Goyal had in mind to start the airline was his vision. And that part still lives on today. His vision was to develop a world-class airline. It is his passion for service and hospitality that makes him different.

So, the journey of the last 25 years is the journey of building something that is world-class in operations and world- class in hospitality. It is not easy to start from nothing and then build a $4 billion enterprise. And he did it. He gets the credit for it as do few thousand people who had worked for Jet Airways.

As I look at the history of Jet, it was his strong vision of who he wanted to be. It was an articulated vision of providing world class customer experience. Second was the actual execution of that vision and it has two elements. He does not know how to give up and he had hired top class professionals. He was never been afraid to pay good money to attract talent. You can look at the history of the all other airlines and the management teams of the airlines and where they came from. Mr Goyal had a history of hiring several hundred top class people who then built the fabric of the airline.

So I would say what made him survive is a very strong vision, a determination that is unparalleled and willingness to get professional help.

It was a genuine rags to riches story. Starting an airline does not require that much money. But for running an airline, your operations need to throw cash. And that is the difference here. It is not a question of how much wealth you have to start the airline but it is the question about how much wealth you have five years into the airline. And the trick was that Mr. Goyal knew that the way you throw cash from operations in running a good and professional well-oiled machine. And that’s what he did. It was consistent service delivery of the highest order. He created an airline that could throw off money from operations and the business generated money.

Starting international operations was one of the high points because we could showcase our product. His vision was having a world class airline not based in India. This is for me is the original Make in India story. It was a brand made here and taken to the rest of the world. One of the low points was the terrorist attack in Brussels in which our people were harmed. Luckily, nothing happened to the people under our care.

Our debt level today is ₹8,300 crore. The peak debt was ₹16,634 crore as on March 2009. Over the last three years we had cut down our debt very significantly.

Honestly, just running a good and strong airline and continuing to serve our customers well as we did when we started the airline. We want to run a good operation that throws off cash and to have a healthy, sustainable, profitable business. Even our debt level today, in my view, is high and we need to cut them down. We want to grow and want to grow profitably.

We will grow at 8 to 10% CAGR for next five years. Today, we have 80-plus narrow body 737s. Six years from now, we will have a 150 brand new Boeing 737 MAX aircraft flying. So, we will close to double our 737 fleet in the next six years.

When I came here nine months back, Nivaan, Mr. Goyal’s son, was working at Jet Airways. He still does. Namrata, Mr. Goyal’s daughter, is not working with Jet Airways. She has several other interests. They are both wonderful children. Nivan is 25. He is an extremely smart capable young man. He has got good strong work ethics. He does not wear his legacy in his sleeves. He comes to work everyday ready to make a difference, ready to learn. He is ready to absorb. When I came in, we moved him under Captain Nikhil Ved in our transformation team. Nivaan is now working under Capt. Ved who is looking at ways [on] how we can continue to transform our business and make it healthier. He has done an amazing job. He has got all the makings of a fine leader and I look forward to following his career prospects.

Before I came the airline was transforming without necessarily calling it a transformation office. When I came in I called it a transformation office. The pillars are cost, customer experience transformation and the third is the winning in India. We clearly have an international footprint. But no airline in the world had thrived or survived that long when it has lost its domestic consumers. So we have set this as part of the transformation process.

We are getting 150 Boeing 737 MAX. In six years, all the old planes will be gone. We will have a fully-new 737 fleet. We own ten 777s and six 330s. Rest are on operating lease.

The first new aircraft will come in July. We will be getting approximately 10 a year. These will be 737 MAX 8 [planes].

Not 9 but by 2021 we will look at MAX 10.

Etihad, of course, helped in different ways. Firstly, there was a financial injection into the company that was used to cut down debt. It also helped in terms of know-how and help in terms of partnerships.

Etihad has not given us any indication that they are ready to exit their investment. I don’t think they will. India is a very big market for them so I don’t see logic in it.

Certainly not. Given the conditions that the government has put around. Based on that, we have declined to participate in the disinvestment.

We are very excited about that. We have participated and we think it is a good scheme. We have got a few routes. We will be managing with our existing fleet.