Modern-day mega corporations are like empires. They are no exception to the failings of imperial hubris. When they become too big and powerful, most morph into blind, rapacious monsters. This may explain the fall of IndiGo, an iconic airline until a fortnight ago.
With 400-odd planes, well-turned-out cabin crews, on-time performance, a large network with over 2,000 flights connecting India every day, and no fatal accidents over 19 years of operations, becoming an airline of global standards was no mean achievement. The two founders, Rakesh Gangwal and Rahul Bhatia, deserve accolades, though the former exited three years ago over an internal dispute.
But today, after two weeks of mayhem and uncontrollable flight cancellations, the airline stands disgraced. It took less than 19 days to destroy a seemingly unassailable reputation built over 19 years.
The initial trickle of delays began on November 1, when the new rules promulgated by the Directorate General of Civil Aviation kicked in to provide more rest to pilots and reduce fatigue, thereby improving aviation safety by increasing weekly rest hours, redefining night duty hours, and limiting the number of night landings. It was a long-pending demand from the Indian Pilots’ Association to bring the rules into line with International Civil Aviation Organisation norms, which the airlines initially resisted adopting.
Low-cost airlines typically fly more hours—hopping from city to city with quicker turnarounds—than full-service carriers. That should translate into more pilots per aircraft for IndiGo than for Air India.
It’s also true that there is a huge shortage of captains in India. Recruiting a foreign captain takes 4–6 months, as they must obtain security clearance from intelligence agencies. That cannot be compromised on, especially after 9/11. After Home Ministry clearance, foreign captains must take the DGCA examination.
Even retired Indian Air Force pilots take substantially longer to be cleared to fly our civilian aircraft than a Lufthansa or Air France captain takes under European regulations. These cumbersome regulations are systemic issues that our regulator must simplify, in line with global standards, to lower costs and enable faster recruitment. Thousands of young Indian pilots are languishing without jobs—that remains a separate but urgent discussion.
But the ground reality today is that Indian airlines have to plan keeping these bottlenecks in mind. While Air India, SpiceJet, and Akasa complied with the new rules in time, IndiGo cocked a snook at the regulator. Why? Simply because it thought it could, and sweating fewer pilots for longer hours increases profits—and stock prices.
But after being chastened by the horrific fatal crash of Air India’s Ahmedabad–London flight earlier this year and increasing minor accidents reported across airlines, the new Director General of Civil Aviation refused to budge on the new rules. IndiGo was caught flat-footed.
The initial trickle of disruptions turned into a flood and soon into a tsunami, with about 1,500 flight cancellations on December 5, impacting a staggering million-plus passengers over just a few days. Thousands of bags are still stuck at airports across the country.
The scale of anxiety, stress, and suffering it caused—for missing funerals, exams, job interviews, and weddings—cannot be fathomed. The hapless IndiGo ground staff at airports were abandoned to face a mob by the airline’s senior management.
What is glaring is that the CEO, the chief operations officer, and the head of the operations control centre—all expats—did not appear on the scene for a full five days. The expat senior leadership is on a few-weeks-on, few-weeks-off contract. But managing director Rahul Bhatia was missing in action, too. The ship was caught rudderless in the storm without its key leaders.
Finally, after a week of misery inflicted on passengers, the IndiGo management apologised and explained the combination of factors that led to the chaos.
The IndiGo board has a stellar composition, packed with high-profile civil servants, a former highly regarded corporate honcho as chairman, a former Air Chief, and a couple of foreign airline CEOs. But, as is well known among many large Indian companies, board membership is often treated as a mere statutory requirement. It helps to pack a board with honourable people who can open doors.
But the managing director should have been at the forefront, holding himself accountable instead of remote-controlling. Legend has it that when Napoleon rested in his bivouac during his imperial campaigns, he would tell his aide, “Don’t disturb me to give me good news. It can wait. But when there are bad tidings, rush to me and wake me up. There is no time to lose.”
Had the managing director and his CEO heeded such advice, they would have held town hall meetings with the pilots, the pilot rostering staff, and the software professionals who provide the crew roster software. And then IndiGo could have averted the worst of this disaster.
The bigger question is: how could one company’s breakdown bring India’s entire aviation sector to a screeching halt? The answer lies in how little competition there is.
Monopolies and duopolies are indifferent, arrogant, and extortionist in nature from a customer perspective. They also pose a significant risk to a giant economy like India’s, which, despite its glaring inequities, is one of the fastest-growing in the world.
That means if the monopoly or duopoly fails, the country’s economy—or an essential sector riding on the ability of one or two players—fails. Neither is it in the long-term interest of the monopoly itself, which can eventually fade into oblivion.
The example of the Ambassador car, which thrived during the licence raj of the Nehruvian era, is illustrative. The few old Bombay Club titans who survived, like Bajaj and Mahindra, faced the onslaught of global competition from Japanese, South Korean, and Western companies that set up shop here and tried to match them in quality and price; as a result, the Indian companies gained market share. But the earlier Birla monopoly, which made the Ambassador, bred inertia and failed to foster innovation.
Let this be a fitting lesson for our policymakers. A vibrant private sector with competition and without cartelisation is the best way forward.
G R Gopinath | Founder, Air Deccan; former Captain, Indian Army
(Views are personal)