Tuesday, 8 May 2018

Aditya Ghosh and Beyond

If there is any Indian airline that could proudly say that "we made profits", it is Indigo. When all other Indian carriers were reeling under losses and huge debt burdens, (mind you, even Spicejet was in doldrums), it was Indigo which reported the best on-time performance, efficiency and profitability. It did not take much time for it to become the largest market share garner as there was no significant competitor within its business model. The person who kept the airline focused on its way to become the number one airline of India was its CEO Aditya Ghosh, a person who does not need an introduction.
Changing times call for changes as well. As Indigo plans to move from short-haul to long-haul flights, covering more international destinations, it was considered incumbent to have someone who is experienced in handling large airline operations. This, along with a number of follies that Ghosh reportedly committed in past, led to his ouster. The ramifications of this move could be felt for a long time to come, despite assurance from Indigo investors that the airline will move ahead strongly.
Was Ghosh so incompetent to handle an airline that was set for expansion? Are the reasons for his ouster merely eyewash? Were there other reasons which could have led to the ouster that have not been made public? Was there a difference of strategic approach in expansion plans? Were the expats considered to be a lot more competent that Ghosh and team to lead the airline in the future?
There are many questions which will be answered in the near future and the way Indigo expands begins to unfold. Whatever may be the outcome of the move, two things are for sure. One, the new entrants will have a lot of pressure to prove their mettle and herald Indigo in new phase. If they are able to achieve it, the decision to oust Ghosh would be marked correct and bygones will be let to be bygone. Second, this move reinforces the supremacy of investors as against a powerful CEO. Investors have proven that they rule the board.
As Indigo plans to expand into the medium and long-haul aviation segments, it will have powerful competitors. Will it be able to turn the tables on them? It will require a lot of doing and a careful product differentiation to beat the best in the field. We can speculate it to now have a frequent flyer program, more cabin choices, associations and alliances with other airlines and enlarged bouquet of services.  Though it does has a lot of goodwill and market share to bank upon for the next phase, and this will make things a lot easier for it, it shall not squander the advantage away.
For a long thought, will it be able to do to the Gulf airlines what they did to the American and European airlines- make India the preferred aviation hub for long haul flights?

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