AB25: Jet Airways chairman, Naresh Goyal

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By: Naresh Goyal

Chairman
Jet Airways


"The airlines that survive in the years to come will have a sharp eye for the top and bottom lines" 

 

naresh goyal, billypix
 © Billypix

The 1960s, and to some extent the 1970s, were the age of innocence for our industry in India. Aviation as a business was less cut-throat, more a luxury, almost like a one-time experience to be cherished; definitely not a common man's choice of travel, the Great Indian Railways had then ruled the roost. Our world has since moved on. Our conflicts, our economics of operations and our demographic pressures have multiplied exponentially, giving any past semblance of innocence a harsh edge or, in more relevant terms, giving rise for the need of a serious business reality check.

Aviation today is the catalyst of our economy and of economies worldwide, an icon no longer of luxury but a significant logistical necessity in the field of transport of men and material. Lost innocence has sadly also included perceived absence of clear safety, so that airlines now have also become soft targets for terrorists, giving impetus to a vast global security business never before seen on our planet. If there were one single "worse" aspect of the changes that have taken place in civil aviation, it is this loss of the carefree element in air travel, where the only concerns once were air turbulence and nausea in unpressurised aircraft cabins.

Today's concerns have soared beyond mere cloud formations in the flight paths of aircraft. Airline managements have to be alert as much to the grim potential of damage and destruction to life and equipment from fundamentalist acts or deranged people as to the recurring red ink in their balance sheets.

The past decade has witnessed evolutionary changes sweeping across the face of civil aviation worldwide. While technology has long become the driver of change, newer factors have emerged. Imperatives of safety, security, environmental protection, fluctuations in the price of fuel, international conflicts, industrial unrest and, alarmingly, increasing incidences of disease and global pandemics have affected the aviation industry. I dare say we are likely to witness their continuing effects going forward, differing only in their degree of relevance from time to time.

But this is also an industry with equally dramatic recovery times; we slump into troughs only to bounce back rapidly thanks to global imperatives of travel, commerce and trade, which, in due course, prevail over the hurdles of wars, epidemics, the oil shock, cost spikes, 9/11, economic crises and their like.

Moreover, the better elements of progress are also concomitant with change. These have, and will continue to, alter the contours of our industry in the future. I believe these changes are here to stay and will evolve generically with the growth of knowledge.

The most obvious changes are those brought about by advances in aviation technology embracing the disciplines of avionics, electronics, metallurgy, food technology and information technology, including the current ground-breaking developments in in-flight entertainment technology among others.

The 1960s and 1970s saw the replacement of the vintage, non-pressurised craft such as the Douglas Dakota, the de Havilland Comet, the Sud Aviation Caravelle and the Vickers Viscount by the faster, larger products of Boeing, starting with that old workhorse, the 707, McDonnell Douglas with its MD-11s, Fokker with its F-27s, the Russian Illyushins, Topolevs and, among later arrivals, the Airbus fleet with fly-by-wire technology.

At one end of the equipment spectrum were the smaller short-haul Fokkers criss-crossing across Europe and in the Far East. At the other end came the transatlantic Boeing 747 Jumbos, MD-11s, the supersonic Concorde and the Airbus products, with their enhanced capacity, range, technology, multiple-class passenger configurations and increased freight capacity, in versions of passenger-specific aircraft, combis and freighters.

In between these and the supersonic travel of the future are the mega A380s and the 787, Boeing's environmentally friendly, fuel-efficient Dreamliner. These aircraft are not only more fuel-efficient but, thanks to the change in framework composition of the alloys that are used, tougher and lighter than any of the previous airframes.

Aircraft design, lighting, interiors and cuisine are an industry apart. From mood lighting, to exclusively appointed first-class cabins, to flatbeds that are now standard business-class equipment on all respectable carriers, to on-board chefs to pay-as-you-eat: the changes are here to stay and are breaking moulds of progress each year. We have seen the emergence of low-cost carriers for short-haul sectors, with no frills.

At the other end, there are all-business jets, both private and public, to provide standard luxury levels in the sky. I foresee the business jet and the helicopter segments as being a significant part of the growth of our industry, which will continue to galvanise governments to provide compatible infrastructure - witness the frenetic airport building/restructuring activity of the past five years in India.

We have seen technology eliminating paper tickets all over the world, the evolution of superior reservation systems that allow for processing bookings, exercising seat and meal choices and printing out a boarding pass at the click of a buttons, either at home or on mobile phones.

Reservation control is such a precise science, dissecting aircraft cabins into marketable classes, enabling advance bookings at unimaginably low prices with reduced inventory, leading to fare escalations closer to the date of travel. Track and tracing equipment for freight is so precise as to provide information on freight pathways in real time. Similarly, passenger baggage-track technology through radio frequency identification technology is more or less the norm with airlines and at airports worldwide.

Clearly, the story of the future is innovation - innovation to please the customer at the lowest cost. In the face of expensive fuel, the imperative to be lean will be overriding. There will, and must be, continuous research on alternative fuels. Until then, alliances will pool their resources to buy equipment and supplies based on economies of scale.

Mergers and acquisitions are running their course and will continue on this path, until economic balance and viability are reached. Ours is a high-cost, high-maintenance, labour-intensive industry with its attendant risks and uncertainties.

The past five years may arguably have been the worst period in modern aviation history. The airlines that will survive in the years to come will be ones with a sharp eye for the top and bottom lines and the ones that innovative - to what degree only time will tell; today it is a moot point whether to scorn the concept of stand-up short-haul seats or see them as another viable innovation.

In the end, it all boils down to asking the simple question: what does the customer want? The answers are likely to be safety, security, efficiency, affordability and comfort. Only the latter will vary in degree. The first four will demand standard applications to provide the highest degree of customer satisfaction. Only then will the red ink slowly start to fade and brighter, blacker bottom lines emerge.

The next 25 years of our industry? They will go in the blink of an eyelid. We have to move fast today, to collectively ensure that the elements of our business are realistically addressed and lead not just our customers laughing to the bank, but bring smiles to our faces too.

 

COVER STORY: DECEMBER 2005

naresh goyal cover

In 2005, Naresh Goyal spoke to us about his drive to lead his airline towards rapid expansion, focusing on domestic and international growth. Today, Jet Airways is one of India's largest airlines. 

 

FROM THE ARCHIVES

"Our future is linked to the our country's future. The economy is opening up so fast and civil aviation is taking pace even in the rural areas. This is very important. There are more than 300 million middle class in this country and yet still so many people don't travel.by air. In the United States you don't have that."