India's largest airline IndiGo hogs the limelight for both good and unpleasant reasons in the aviation sector. The airline recently had to go through a tough phase when the tiff between its promoters Rahul Bhatia and Rakesh Gangwal came out in the open. Before that, a few months ago, the airline struggled with pilot shortages that led to a series of flight cancellations. In a candid conversation, Raj Raghavan, senior vice president of human resources at IndiGo, talks about a host of issues, which are keeping the low-cost carrier in the news. Edited excerpts:
Business Today: How the management has handled the crisis at the leadership level? How have you managed to keep the morale of employees high and let them concentrate on the work rather than reading newspapers every day and feeling something or the other about it? What has been the communication?
Raj Raghavan: I think the good part is that differences between promoters have predominately stayed at the board level. This is a management-run company. On a day-to-day basis, the board doesn't interfere at all. They basically sign off on strategic vision and long-term investments, but predominantly we run the company. One of the things that Rono (IndiGo's CEO Ronojoy Dutta) does is to communicate by way of his emails which also get picked up by the newspapers.
What we've also done internally is to split ourselves into various teams. We as in the leadership team. We have a concept of station sponsors. For example, I'm a station sponsor for Bangalore, Ahmedabad and Colombo. Like that, a lot of my colleagues have picked stuff up. We go to these stations. The intent is to go to these stations once in every four months, spend a day, and talk to people, do group meetings, do individual meetings, be around, and see people work. We're trying a lot of these things.
The good part is that the board has pretty much kept it to themselves. They haven't pushed it down. I'm sure that it will get resolved. These are two big boys. We have kept the company's operations completely secluded from the bigger issues. It is, of course, an interesting read when you see it in the newspapers. In fact, a lot of non-IndiGo people keep asking me that there must be pressure. I'm saying no, not really. I don't get to see any of this.
BT: IndiGo was dealing with pilot shortage some months ago. The airline had to cancel flights because there weren't enough pilots to fly planes. What was the problem, and what led to that situation?
Raghavan: Last year, Boeing wrote in their annual report about how the industry is going to face a pilot crunch over a period of time. There have been some interesting stories of how large airlines just couldn't fly their planes because of the lack of pilots. In my mind, it's a combination of two things. If you say pilot, it's not so much a generic pilot. It's about a captain that you are lacking. Not so much the first officers because there is a lot of feeder pool that comes in. Then the question is how do you develop a captain - not just hire the captain from the outside, but how do you develop from within.
In India, even if I were to hire a captain from another Indian airline, there is a six-month mandatory notice period. It used to be one-year. Now after the court gave a stay; and the stay has been extended for a long time. I can go to another airline and poach people. There can be another airline come and poach our people; but the six months notice is long enough for the captain, his manager and the company to talk and kind of stay back. Often times, at the very last moment, you will have people not showing up.
We need to be planned for all of these things. IndiGo does this in a structured way. At the first officers' stage, we have a unique cadet programme. The entry barrier to being a pilot is surprisingly simple. You don't need a higher (education) degree. You need to be a 12th standard pass student with maths, physics and other skills. Then it's about how you get trained. It's a fairly expensive proposition and also intense.
From the beginning of the supply chain, we have collaboration with three flying schools in the US, Australia and New Zealand. We invest our time in terms of selecting these people. We give a letter of intent. They need to finish the flying course. They get type-rated, they get CPL (commercial pilot license), and they start the programme as a junior first officer. So there is a fair amount of initial investment, time and money it takes. The crunch comes when they become a senior first officer and almost getting upgraded to a captain, and which is when lot of others get interested in them. Till then, they are not a saleable commodity and one among several hundreds.
I need to know, as an HR leader, what are those things we need to do to keep the person. We have internal upgrade programmes and our intent is to see how much more internal upgrades we can do.
Thankfully, in the last six months, Jet Airways' failing has helped. We hired 400 pilots from Jet out of which 250-260 were captains which is a good thing because we would never be able to hire 200 captains from one airline otherwise. This was a blessing in disguise in some ways. But that also takes time. They need to get type rated onto A320 because Jet flew Boeings. Their A330 (pilots) ones also need to go through a A320 programme which is a 90-day type-rated programme. But if they are a Boeing 777 or 737 pilot, it could take six-seven months. This is a unique and expensive resource for the airline. We need to be able to use them well, and to be able to give them the right career.
BT: How you have been sort of able to resolve the issue? IndiGo has a cadet programme to induct pilots on an ongoing basis, then how did this problem arise?
Raghavan: There are a lot of factors that contribute to the availability of captains. It's just not about hiring. It's about how long the plane flies, and how many hours a pilot is available to fly. How much training is required, how many off-days a person has, and how many temporary medical unfitness people have. There is a tremendous amount of factors. The big factors are at least 15. If by statistical coefficient of even 20 per cent going wrong with that, which means that out of 15 factors about three-four factors are going wrong, you have an impact.
I think as a company we have tried to understand and we are working on it. The other one is Jet certainly has helped. We also have a steady inflow of our own upgrades. There is no other airline in India that does so many upgrades. That's basically because we have huge bench strength. Some of these investments that we make on cadet programmes are long-term. If I'm a cadet today, by the time I become a captain, it's easily eight-nine years because it takes a long time. Now the cadet programme only came in about four years ago. For us to think that the cadet programme is going to resolve all captain issues was far-fetched but I think it was a great step.
I can tell you for sure (that) four years from now (because of) our cadet programme, JFO (junior first officer) programme and our lateral inductions - from both military and other airlines - we'll probably be in the best position that any other airline will be in awe of. We have a strong military recruiting programme. If we were to go to the Indian Air Force or to the Indian Navy where people fly, we are the first port of call for them when they retire.
Raghavan: That's because we are seen as the best place to work for pilots. We treat people well, and we train them well. We are still a homogeneous, people-loving kind of company. We don't treat you as objects; we treat you as people, as they often say. Even today when a military pilot takes a premature retirement and she or he still has 20-25 years of flying (left), among private airlines, and even including Air India, they would most preferably come to IndiGo.
BT: I recently got a chance to speak with one of the Jet Airways' pilots, and I asked him what are his options in the face of airline shut down? He told me, which was also the view of his pilot father, that there are two airlines in the industry right now where pilots build careers - Air India and Jet - the rest of the airlines are primarily jobs?
Raghavan: That's a perception and I don't know the person. It may be true for them. If you look at Air India, they've been around for almost 60-70 years. Jet was around for almost 30 years. IndiGo has been here for 13 years. I can show you at least 100 pilots who started with us as Junior First Officers who are captains today. If you go and talk to them, they will tell you that IndiGo is a career and not a job. It's all about perceptions. It's all about what you've seen till now and what you have not seen. I'm hoping in the next 30-40 years of IndiGo's existence, we will also be like that.
Today, when Jet went down, I can firmly tell you that we have hired the maximum number of pilots, and not even picking up the Junior First Officers. People didn't come to us because we were the only option. There were other options. They came to us because we went and spoke to them in a way that was welcoming. There are still Jet Airways' pilots here who are (undergoing) training, and they come and tell us that 'we did not know this about IndiGo. We only knew you are an efficient and operationally strong airline. But there are lots of parts that we did not know about you.' Perspectives depend on who you speak to at that point of time.
One of the things I tell my recruiting teams is that we want outstanding candidate experience. Whether they get a job with IndiGo or not is secondary, but I want them to know that in this place they will get treated extremely well. I'm not even talking (about) captains or senior First Officers. I am talking about JFOs. When we do open hiring for JFOs, at any point of time, we have about 1,000 people coming in and taking tests.
BT: What is the time period of the cadet programme?
Raghavan: To get a CPL can take about two years - give or take a few months. A lot of it is outside of India. If you have to be flying [in India], you have to have a CPL. For example, in the Middle-East, you don't need a CPL. It's not difficult or less difficult here.BT: The ground handling regulations have changed recently. A lot of companies are hiring people on their own? Do you plan to focus on hiring more in-house talent?
Raghavan: The regulations basically said that you can do one out of three. One is that they have identified some companies like AISATS and Celebi Aviation who can be your ground handlers. Secondly, they said you should run your own ground handling function. Thirdly, they said you can set up a separate company and do your ground handling.
We were initially going down the path of giving it to a large player. Then we said that it makes sense for us to do it by ourselves because we can do it much cheaper. The baggage handling is such a secret sauce. About a year and two months ago, we formed a company called Agile Airport Services. We have been doing a thoughtful launch over the past year. We haven't covered everything completely but almost all the big metros and tier-II cities are covered with Agile. Agile is 100 per cent owned by IndiGo. They have their own management structure; they have their own leadership team.
They run the computerised baggage handling system from the time passenger checks-in. It is almost like a supply chain in an e-commerce company. You come and give your bag that needs to get tagged and the tag needs to be scanned, the scanned tag needs to talk to the baggage handling equipment, and then the ground handling equipment takes it to the belly of the plane. If it is a multiple point plane, it's a manual exercise. That needs to be segregated properly. If you don't have technology to resolve it, you will have errors. What we have done is that each of these people have a scanner to make sure that even unintentionally, your Bangalore-bound bag does not get offloaded in Hyderabad. All of this is handled by Agile.
BT: How big is the size of Agile? Is there enough talent available in ground handling side?
Raghavan: There are over 10,000 people who are permanent employees of Agile. The technical talent that we need in that area also needs to be trained. We need to go to ITIs (Industrial Training Institutes) and engineering colleges. We don't need bachelor engineers but we need diploma engineers.
BT: When the Jet Airways collapsed, a lot of people were saying that mid- and senior-level staff would not have problem in finding a new job. But ground handling staff would find it difficult to get new jobs because of the talent supply glut in that area...
Raghavan: It's all about skills. At the end of day, how skilled you are for doing a certain operation, and how you can be cross-skilled are important. If I'm a baggage handler, can I also be cross-skilled to drive? Can I also be cross-skilled not just to drive the buses but also the pushback truck? The pushback is a technical operation because you need to place the fork of the truck in between the tyres in the front. It needs to be pushed back exactly in a certain way. You cannot slow it down because the engines are already on.
BT: IndiGo is expanding its international operations, how do you manage the workforce requirements for the international side?
Raghavan: There's no time at all. Our international stations which were nine in April 2018 are almost 22 now. The regulation is that the security chiefs in these airports, and the airport managers have to be Indian. So imagine, in 13 more international locations, I have at least four-five of our India employees who have gone on two-year assignments. We have outsourced the ground-handling work to our GSAs and ground handling agents.
BT: What about the Indian scenario?
Raghavan: Delhi is our largest airport. We do 170 departures a day. The six metros for us have more than hundred flights (a day) which are Delhi, Bombay, Bangalore, Hyderabad, Kolkata, and Chennai. In Bangalore, for example, in addition to our airport operations, we just launched an ifly Academy. Outside of Delhi, the large employee base is Bangalore (where we) have probably about 4,000 people including base staff of pilots, cabin crew, engineers, and airport staff. It can be as small as Dibrugarh (that) has two departures (a day) and it probably has 20 people. It's wide range.
BT: Is it getting difficult for you to manage three terminals at one go at the Delhi Airport? Is it creating some issues for the airline?
Raghavan: We have started segregating the flight series in a way that is easily distinguishable. This is for communicating with the passengers. It's very important for us to get our passengers to understand. There are two sides to a coin. If it is complexity on one side, the opportunities are on the other side. We look at it as an opportunity. It is more complex, and more labour intensive. We certainly need more people. At the end of the day, you need to be able to have that kind of conviction to make things work. Terminal 3 was not new to us. To be fair, we were flying International (from there). It's just that we have added another 20 domestic flights. It is more people than we need if we were operating from a single terminal but we are okay with it. What else do you do?