Chairman and Managing Director of Spicejet, Ajay Singh spoke to NewsX’s Senior Executive Editor about the measures that can be taken to make flying safe again.
Q. Before we talk of the aviation sector, a quick reaction on Delhi Chief Minister Arvind Kejriwal’s announcement not to ease any restrictions on the lockdown just yet, even though Prime Minister Narendra Modi had said some easing of restrictions would happen.
A. I feel that the Government of India has done a fabulous job in the way they’ve run this whole process. Kudos to them. What they’ve done is being greatly appreciated around the world. I would really not like to second guess what they are doing. So, if the Government of India believes there should be some partial lifting of lockdown post 20 April, if they feel that is safe enough, I would really rather hone into that point of view.
Q. Speaking of great jobs, I want to compliment SpiceJet for its role as a Covid Warrior. You have operated more than 400 flights, carrying more than 4,000 tonnes of cargo, 100 of these were to international destinations. I recall an interview where you said you were carrying cargo on passenger seats.
A. I think this is our responsibility and this is a time when it’s worthwhile to be an airline, when you can actually help. I think we’re just fortunate that we had the opportunity. Wherever we are called upon to help, SpiceJet will always be there.
Q. The airlines are going to be one of the worst-hit by this lockdown. First of all, any clarity on the dates of opening up? There was speculation of May 3, now the Civil Aviation Minister has said no such dates.
A. First, aviation has been the hardest-hit industry. Not only in India, but globally. There’s no doubt about that. It’s a terrible time—the worst ever time for aviation globally. Having said that, in terms of where India is, of course we fully support the government’s decision for lockdown. Things could have been much worse if not for the lockdown. In terms of a date for opening, I don’t think anyone knows the answer to that question. Not the government itself. I think what they’re trying to do is figure out what happens to infection rates with the extension of the lockdown and then they will take a call. Also remember, they need to make a protocol for how exactly flights will be conducted. What precautions are needed to be taken by the passengers, by the airports, and by the airlines. How we can manage relatively contact-less travel, when it does happen. So that’s a process I think the government will probably go through, and discuss with all the stakeholders, before determining a date. So, whether this is May 4 or an extension… it seems to us that there could be an extension beyond May 4 because with the precautions they will take, there are certain changes that will need to be made by the airlines and airports. Do we have enough time? Perhaps this might be extended beyond May 4 by another few days.
Q. One of the suggestions is airlines should fly with one empty seat in the middle. How feasible is it economically?
A. First, it’s not safe. If you think about it, the distance between the aisle seat and the window seat is about 2 feet. The safe distance for preventing COVID infections is 6 feet. So, leaving one seat empty in the middle serves absolutely no purpose. If you look at the two persons who will be on the aisle seats, on both sides of the aisle, that’s a distance of just 1.5 feet. So that’s not really a solution. Face masks are probably a better solution. We will have to look at what is actually effective and not at what is an eyewash, or something that makes people feel happier psychologically. We need to do stuff that is actually efficient. The aviation sector certainly does not want to be the one spreading infections. We will do our very best to propose to the government measures that will help minimise the spread of the infection.
Q. You had a meeting with the Civil Aviation Minister recently. Any measures discussed to get you back in air again?
A. No great discussions so far. What is being looked at is the check-in process—how will that happen? Can there be a more automated process? Can we have a more efficient process for baggage handling? When people stand in rows, how far can they stand from each other? Is there a way to disinfect them? What is it that people need to wear on-board? Is it a facemask and gloves, or is it more than that? Then what we’re looking at is how does the crew behave, what does the crew wear? Do we or don’t we serve meals on-board? Those are the kind of issues that we need to look at. What we do has to be sensible—there’s no point in doing something that looks good on paper but is not actually effective.
Q. India was facing an economic slump even before Covid hit us. This is just going to make things worse. You’ve been talking about reforms in the airlines sector, do you want the government to come in and help?
A. First, I think that India always reforms in a crisis. This is an opportunity for us to look at all the structural problems we’ve had in Indian aviation. For example, trying to get aviation turbine fuel under GST. This is done across the world, and therefore because people get input credit nobody really pays taxes on aviation fuel. In India we are paying 35-40% tax on average, when you count excise and the state VAT. So, this is something that needs to be done— include ATF under GST. This is a relatively easy time to do it. There are ways to do it where the government won’t really lose revenue. The second thing is—look at the way the airports are structured. You give the airport to the highest bidder—the person who agrees to pay the largest revenue share to the Airports Authority of India. When that happens, airports try and maximise the money they get. They then go and say to service providers—people who are providing ground services, baggage handling services, check-in services—that they will give services contracts to those who give them the largest amount of money. The service provider, in turn, goes to the airline and tries to charge the maximum amount of money possible. Because of that, aviation in India becomes more expensive. And increasingly, we have to compete with the likes of Emirates, Etihad, Singapore Airlines— all these regional airlines which have a completely different cost structure. So, this is the time to get our cost structures right if India truly wants to be an aviation power, if India truly wants to set up its own international hubs, and not have to transport our passengers through hubs in the Middle East or in the Far East. I believe this is the best opportunity. In terms of shortterm assistance, countries around the world have looked upon aviation as a strategic sector. You see what the Americans have done: they have provided $50 billion dollars to their airline; $25 million in grants, and $25 million in soft loans. In Germany, Lufthansa has been given a $8 billion package. Singapore Airlines is being provided with a $13 billion package. So, this is a global trend. People are trying to assist the aviation sector, understanding the economic importance and strategic value of it. Of course, India does not have those kinds of resources, but we hope that they will assist us as well and recognise that as the economy picks up, aviation will be a critical claim.
Q. Do you see the prices of tickets going sky high?
A. Fares are a question of demand and supply. There is no question that demand is going to be impacted. It’s likely that no international flights will happen for a period of time. As far as domestic flights are concerned, I think demand could be dampened for a period of time for sure. We do believe that India is one of those markets which will pick up faster than markets globally. India has a great advantage of having a pretty big domestic market. Today, only 3% of Indians fly. Certainly, that number will increase over a period of time. The pace of that growth might slow down for a bit. But India is still going to be one of the most exciting aviation markets in the world.
Q. But do you see habits changing? This work from home culture will ensure that flying to Mumbai for that one meeting and coming back in the evening will stop.
A. Yes, some of that is going to happen for sure. As people understand that some of these meetings can be conducted like we are talking right now (video conferencing). Of course, some of this travel is going to get impacted. But ultimately, humans are social beings. They want to be with each other. If you want to go on a holiday, there’s no way you’re going to get to a beach and enjoy it on a Zoom call. People would rather see each other in meetings. We go to conferences, it isn’t just to attend a meeting. It’s also to meet the people there. It’s also to visit the place where the conference is. So, there is going to be some impact. But we believe that with just a small fraction of Indians flying today, ultimately the Indian aviation market is going to be pretty large. It’s also a great tool to connect two cities. It’s not so easy connecting them through transport such as trains. We think that markets that will be aviation powers in the future are those which have strong domestic markets. Markets like China, India, Indonesia. The time for the dominance of European and American powers in aviation has probably passed.
Q. I read that during the meet between Rajnath Singh and other ministers, the Civil Aviation Minister brought up the issue of parking fees. He said that a lot of costs are building up for you due to parking fees. Are you hoping for a waiver?
A. That certainly should be provided. Planes are just standing at airports and there is a pretty significant parking fee. We’ve seen around the world that what people are doing is taking their planes and parking them at no cost. Let’s say in the desert in Israel or other such places. So, we need to find a way to look after our fixed costs. Today the revenues are zero. There is still some revenue for SpiceJet due to the cargo operations we are undertaking. But broadly, revenues are zero. We have some fixed costs—the lease of our aircrafts, maintenance and parking of our aircrafts, salaries. The greatest pain for airlines today is the fact that their employees are suffering. People don’t have work to do. We are forced to resort to salary cuts and leaves without pay, which is extremely painful. We are very proud that passion is high despite all this and people are being cooperative in the aviation space. But we need to start flying as soon as the medical experts allow us to do so. Meanwhile, we request the Government to share some of the fixed costs of airlines.
Q. During this lockdown, how do you spend your time? Any new skills that you’ve learnt, apart from being adept at Zoom? You were anyway the tech geek.
A. I’ve learnt how to jump on a trampoline with my three-yearold daughter. I’ve learnt how to be a little more patient, with having nothing to do with periods of time. I never thought I’d have to sit at home for so long. I’ve never done it in my life.