Sitting now in the middle of 2012 and reflecting on the past three years gives me both a sense of achievement and anxiety. Achievement on account of how much our business has grown, and anxiety about the future, as our industry has undergone structural changes on account of the withdrawal of capacity by Kingfisher Airlines and the hike in fares by other carriers. The combined effect of these resulted in negative growth in domestic air passenger traffic in May 2012, for the first time in seven years.
One thing which helped our business more than double in the past three years was our focus on investing in core areas like brand and technology. Traditional wisdom would suggest that we should have scaled back on these activities. But after an initial cutback in 2009/10, our board recommended that we scale up investment rapidly. On the brand front, this had a multiplier effect as advertisement inventory rates were lower due to the recession and other advertisers had cut back. Also, given less clutter, our campaigns had better "cut through". On the technology front, we could attract talent as larger organisations were laying off people.
Investment in new product development helped us gain market share when the markets bounced back. It worked because that slowdown was relatively short-lived. Current macroeconomic and structural issues point to a more sustained slowdown, so one might need a different approach.