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King of no frills on good times
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G.R. Gopinath, the father of Air Deccan, tells ANAND SANKAR, though the airline’s livery has changed, his focus will still be cost cutting
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PHOTO: MURALI KUMAR K.
Time and tide Capt. Gopinath: ‘Deccan will be there a long time after I am gone’
Captain G.R. Gopinath’s office is as Spartan as ever. Dressed in his trademark half-sleeved shirt, he welcomes me apologising for the hour I had to wait for him.
Capt. Gopinath’s brainchild Air Deccan, fondly referred to as the “Udupi hotel of the airline industry”, was not so long ago subject to one of the biggest acquisitions in Indian aviation history by Vijay Mallya’s UB Group. The airline now sports a new livery with an identity similar to Mallya’s Kingfisher Airlines and has been rechristened Simplifly Deccan. The captain is all set to leave for Mallya’s party in Mumbai to mark the makeover.
Air Deccan’s logo of the two hands has made way for the kingfisher, but what about the effect on the common man the airline was created to service? “The common man was our mascot. We were using him wherever we wanted to convey an image of the company without putting it into words. He will always be there,” Capt. Gopinath says.
The Air Deccan story needs no introduction. “We have built a company which has changed aviation forever in this country. It will be there a long time after I am gone. It has touched the lives of millions and changed the landscape of the country. We are not a regional airline, we are a national airline going to the regions,” he says.
He goes on to add he gets his adrenaline rush from connecting the “other India” and points to the fact that he flies to 66 destinations across the country. The maiden flight was in August 2003, which infamously suffered an engine fire. But what took the airline to the masses was the “promise” of flying at just Re. one.
“One day I just said to the board I will sell tickets at Re. one. It was not a gimmick. If the seats were going empty, I might as well put someone in it. It trigged an implosion in getting people to travel.”
He says the maverick idea was one of his options to break the “cartel” of the full service airlines.
“As an entrepreneur you should be at the forefront of creating this consumer shift. We created a tectonic shift, even as I speak, less than two per cent of Indians are flying.”
Capt. Gopinath comes through an idealist. He says aviation is as crucial as roads, railways or the Internet. He says its growth and ability to touch all parts of the country is necessary to power the current economic growth. “There are 200 million middle class business people, they cannot travel over two days by train and be competitive globally. If I can make them fly once a year at least, its 200 million seats, five times a year, it is a billion. Aviation also gives a fillip to tourism, which in turn generates employment in the unorganised sector.”
I ask him whether he was trying to implement populist policy through capitalism and he responds: “I don’t know if you can use the word populist, but we broke the cost and caste barrier to flying. If you look at billion people as the hungry, your thought goes to dole. But it looks different when you look at them as a billion hungry consumers.”
He says he made it a mission to break the price barrier to flying, even if as analysts predicted, his balance sheet suffered. In addition to rock bottom prices, Air Deccan embarked on a furious expansion spree to inject capacity into the industry. The expansion rate at a point peaked at 18 new aircraft in just nine months.
“You need to scale up your business. If your topline remains constant your business will collapse. You need to create a carrier profile. You need the numbers to reduce your overall costs. But profit is sacred. I don’t think anything can survive today if there is no profit. You need taxes and taxes are paid only by people who make profit. But for having profit you need topline growth,” he contends.
What definitely made Air Deccan attractive was its urgent need for investment. Capt. Gopinath does accept he was vulnerable.
“If I was not big and vulnerable, I would have been small and vulnerable. If you are small, you are finished, killed. Why were people queuing up for us? In four years we overtook Indian’s market share, who are 53 years old.”
The airline reported losses in its last quarterly results but says it is on the road to recovery and he says “once the cashburn is over, we are a money machine”.
The initial approach by Vijay Mallya to buy the airline was met with nothing but open hostility. Capt. Gopinath says that was because he was not in favour of losing the Air Deccan identity.
“Initially he told me, why not join hands and we will merge the airlines into one Kingfisher. But soon it dawned on him that this is a great business model on the lines of SouthWest in the U.S. and Ryanair in Europe.”
The UB Group owns the largest selling whisky brand in the world and that according to Capt. Gopinath gives them experience with low cost brands. He says their deal now is all about synergy and getting the best out of each other. For example cues on customer service have been taken from Kingfisher while the logistics for the two airlines will now be headed by a person from Deccan.
“He swore that he believed in my model. I gave him what he wanted (market share and a fleet of identical aircraft) and he gave me the money without normal due diligence with a high valuation. I am who I am today because I trusted people and people trusted me.”
Independent market surveys affirmed the power of the Deccan brand. Thus Capt. Gopinath will head Simplifly Deccan as Executive Chairman and Mallya the Vice-Chairman with an independent board appointed by both. The day-to-day operations will be handled by a CEO.
“It will never work if we hold on to our egos. I will continue to cut costs and he can grow revenue. If he has a higher stake, he makes more money if I cut more costs.”
Though he is looking at moving on with different ideas, Capt. Gopinath says he will be “passionately” involved with Deccan in the near future and always “emotionally” attached to it.
As I am about to leave he excitedly shows me a cartoon sent to him by R.K. Lakshman to wish him luck on the re-branding. It depicts him standing shoulder to shoulder with the common man with many aircraft buzzing overhead.
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