InterGlobe Enterprises Group MD Rahul Bhatia with CAE President & CEO Marc Parent at CAE simultation training centre in Greater Noida, Uttar Pradesh. PHOTOS: Shekhar Ghosh
Rahul Bhatia likes to keep a low profile but his frugality with words belies the success he has achieved over the past two decades. InterGlobe Enterprises, a company Bhatia started in 1989, operates India's most profitable airline - IndiGo. With a fleet of 71 aircraft, the low-cost carrier posted a six-fold rise in net profit to Rs 787 crore for the financial year 2012/13 compared with the previous year on the back of 65 per cent growth in revenue to Rs 9,458 crore.
But Bhatia is in no mood to rest on his laurels. He added another line of business - a pilot training facility - on Saturday to InterGlobe's wide portfolio of businesses that also includes hospitality, business process outsourcing, retail, ground handling and cabin-crew services.
The idea behind this new venture, says Bhatia, is the need for new trained pilots in the industry. According to some estimates, India needs more than 3,000 new pilots over the next five years. "There's an acute shortage of trained pilots, in-flight technicians and engineers in our country. If we have to take Indian aviation to become truly world-class, we have to address such needs," he says.
The new facility - set up in Greater Noida with a total investment of $25 million - is a 50:50 joint venture between InterGlobe and Canadian firm CAE. It has two simulators at the moment with plans to introduce four more simulators by 2017. Currently, the facility is providing training to IndiGo pilots. Next month, GoAir's A320 pilots will also be trained on the simulators.
India's aviation market has grown exponentially
over the last decade. By 2020, it is estimated that India will be the third-largest civil aviation market in the world behind the US and China. By then, India will process over 420 million passengers at its airports.
Bhatia says that over time India will need several thousand aircraft and trained pilots. "At its full capacity, it will be the largest such facility in India training about 5,000 pilots [a year]. It can also be used by neighbouring countries such as Nepal, Bhutan, Bangladesh and Myanmar due to its location in northern India," he says.
Bhatia's new venture comes at a time when India's aviation sector is witnessing a massive shake-up
with the entry of foreign carriers - AirAsia, Singapore Airlines and Etihad - and existing players including SpiceJet, Air India and Jet Airways are on their uppers.
Bhatia is quite welcoming of the new players
though. "India is an underserved market. There's room for everybody to survive and prosper," he says, adding that there are so many cities that IndiGo wants to add to its destination list but has not been able to do so because of lack of aircraft. "We are adding roughly one aircraft per month."
IndiGo, which began flying in August 2006 and has become a poster boy of the civil aviation sector in the country, credits its success to its service quality. IndiGo's on-time performance at 95.3 per cent is one of the best in the industry with the least number of flight cancellations. Between June and October this year, the carrier has increased its market share
to 30.2 per cent from 29.5 per cent.
In recent months, the carrier has been at the receiving end of passengers, who accuse it of hiking fares as some of its competitors struggle to stay operational. Bhatia defends the hike by saying that input costs have gone up.
"The fuel price has gone to where it is. The airline business is highly dependent on currency cost; it will have its impact. The religion of IndiGo is to keep fares low. I don't believe that IndiGo can continue to maintain a growth profile of 20-30 per cent a year if it continues to maintain high fares," he says.