An exclusive interview with Capt G.R. Gopinath, founder of India's first low cost airline, Air Deccan for the show Bottomline, airing on Headlines Today. Below are the views:
Q. Captain Gopinath, your supporters say you are a visionary who dreams big, but is often let down by investors, while your critics say you are a failed entrepreneur who comes up with good ideas you cannot sustain. But most people would agree that you never give up. What do you say to that?
A. I think perception is important and the truth is always somewhere in between. This company for example whose hangar you are sitting in was incorporated in 1995. It took me three years to get the licence. I started here with a tent and one helicopter as a small company but today it is the largest general aviation company in India to cater to infrastructure, high net worth individuals, and corporate houses. We also maintain 60 third party aircraft. We have been here for a very long time. I am a dreamer, as you said. But as I dream, I design. It has also sometimes led me to failures. There is also a burning optimism in me.
Q. And you haven't forgiven Vijay Mallya since…
A. Yeah, I haven't forgiven him because he killed my airline and I think he killed himself. Because the writing was on the wall…the future was in low cost. The market cap of Deccan - which is normally the yardstick - before the merger with Kingfisher had reached $1.2 billion. So every investor made mountains of money, so Air Deccan was not a failure from monetary point of view, and neither was it a failure from the point of view of the model because the dream lives on.
Q.Let me quote another Jet Airways employee about you: "He is the person who killed Indian aviation, bringing to India the concept of low cost flying without the backing of infrastructure. His principle of selling well before cost sent the entire industry into the red and the industry has not recovered since".
A. I think it's too elementary to respond to. It's like saying the Maruti 800 is not the right car for this county but the only the Benz is the right car or the Ambassador is the right car. Indigo is there, Spice is there, Go Air is there…even today you can buy a ticket on a Bangalore-Delhi flight, a week in advance, for Rs 5,000 as against Rs 12,000 a decade ago when salaries were one-third and oil prices were one-third of what they are today. And Indigo is in profit. Jet, 70 per cent of the aircraft of Jet are in the low cost model. All over the world it is low cost which is (flourishing).
Q. What is it that you are going to do that could potentially destabilize the sector…?
A. My idea is not to destabilize but to create a new market. Take TV channels. Imagine if someone wants to start a new channel and the existing channels go and say to the government: 'Look there are already 400 channels, we are already losing money, don't give one more licence because he is going to destabilize TV channels.' What should the government do? Should it protect the existing channels or should it protect the consumer? I am only going to do what any sane businessman does. I made mistakes last time…my mistake was selling under pressure from my investors. I was new. I was not honed in the skills of negotiating with hawkish investors just out to make a quick buck. But it is a lesson in life I have no regrets.
Q. You have a regional airline licence with you…
A. I have a regional airline licence but my investors are saying that if I have a regional airline there will be a conflict of interest. We will have one airline in which we will have the regional as well as the one-equity structure where one will feed the other.
Q. So what you are saying is another national airline like Air Deccan, the revival of Air Deccan…
A. (Laughs) Revival of the dream. As you know every investor made money with me. I don't think they have made money with any other airline. No investor has made any money with any other airline except Air Deccan. So people are ready to invest because I took care of investors' interests. The airline was clean, transparent and it was a national, people's airline.
Q. I can almost see the tag line for the new airline: the people's airline…as opposed to the 'simply fly'.
A. You can see that the most profitable airlines of the world are low cost airlines. Look at Ryan airlines, with 290 aircrafts, 75 million passengers…with lowest fares in the world and the highest profits.
Q. How big will this be when you launch in January or February?
A. We will obviously launch small we will ensure that we are in profit. I am not an NGO…you know some crack-pot said that I am selling my tickets below cost… nobody does that. It is an art and a science to sell tickets and fill the plane… some tickets go below cost, some go above cost… that is to stimulate the market. Even yesterday I came on one of the airlines; it had only 60 per cent occupancy. Seventy seats gong empty. It's a crime to fly planes empty. I don't think my investors will allow me to take the money and burn it because I want to kill Jet Airways. No, that's not the aim. The aim is to build a robust airline for the country which this country needs. And I'm sure all of you are going to root for it.
