'We want to build and compete on differentiated service'

In Conversation: Vinay Dube, CEO, Jet Airways

'We want to build and compete on differentiated service'

Jet Airways recently announced its Bengaluru-Amsterdam direct flight, declaring the capital of Karnataka as a hub for its flights. With this, Bengaluru is poised to become a major sector for regional, domestic and international air travel. In this candid interview, Jet Airways CEO Vinay Dube takes Hrithik Kiran Bagade of DH on a flight beyond the airline’s Bengaluru vision. Edited excerpts:

Jet Airways views Bengaluru as a hub for domestic and international operations. How important is this city for you?

Bengaluru is extremely important for us. As a city, it will continue to grow, and Jet would like to participate in that growth. You’ve seen a flavour of that with our Bengaluru-Amsterdam flight, apart from our flights to Colombo and Singapore. I think that trend will continue.

Would you be looking to connect major cities like London, Paris and New York directly from Bengaluru?

We are always looking to follow where the consumer wants us to fly. And passengers in Bengaluru and South India don’t just want to fly to Amsterdam and use that as a connecting gateway, but fly to other parts of the world. Also, let’s not be too focused on just international opportunities. People from Bengaluru want to travel to other parts of India as well, and we’re going to follow them, offering unique levels of customer service.

What drives Jet’s growth strategy in Bengaluru?

Intrinsic demand in a city is very important. While corporate customers are a big element while talking about Bengaluru, it’s not just them. It’s also the Indian diaspora that lives abroad, it’s also the person who vacations in Europe, or someone who wants to visit relatives within India – it’s a mixture of all of these elements on demand that makes Bengaluru interesting. The next facet is the airport infrastructure and if it allows expansion and efficient connectivity. Talking about Bengaluru being a hub, it must be capable of connecting passengers to destinations, or for originating passengers.

What traffic do you expect on the Bengaluru-Amsterdam route?

It’s a mixture of corporate, leisure, and transit. It’s tilted heavier towards corporate, compared with the other markets because Bengaluru is corporate-heavy in general.

It’s however not 80% corporate, and we need to fill a substantial portion of the aircraft with non-corporate traffic as well.

The airline market itself was in a rough patch, and only lately has it stabilised. How do you view the industry in terms of trends and challenges?

We’re in the early stages of growth. From Jet Airways’ perspective, we want to grow with the rest of the industry. To do that, we need to compete on the basis of customer experience, differentiate ourselves in terms of who we are, and that level of service is part of our DNA. We’re going to accomplish all that with a leaner cost structure, in terms of our operating costs, cost of sales, consumption, rates, maintenance, and so on. That’s how we are successful. We are very excited to be at this particular juncture of Indian aviation.

What role will differentiated service play to push your strategy?

When it comes to differentiated service, it starts with network. Today, we have the broadest network with our partners, and that’s a sort of a key element we provide for customers. The onboard amenities – the Premiere Class, the food, the streaming and entertainment quality on board are all special.

Finally, our people and service – I think, we’ve got the finest flight attendants, the seat assignments, the frequent flier programme, and digital experience. We’ve a growing middle-class that discerns a differentiated level of service. Jet’s key strategy is to build and compete on our differentiated service, with efficiency in cost structure.

How do you address efficiency in cost structure?

There’s no easy way. You have to look at each element, and find ways to address it. There’s no simple formula that starts with a strategic goal. Your cost of sales is different from your cost of maintenance, wastage, and fuel efficiency.

Our debt has gone down by $1 billion, and with that comes a reduced cost of borrowings. Revenues are driven by network structure development and consumer experience.

The government is focusing on regional connectivity. What are Jet’s plans in this regard?

We’re excited about UDAN, and its second round was created with feedback from airlines, and is a little more balanced in its approach. We are happy with that and would gladly participate.

Do you have any plans with Jet Konnect, which could play a crucial role in regional markets?

Jet Konnect has its role to play. Our primary focus would be to bring the ‘Jet level of service’ to regional markets as well.

What about domestic expansion? Are you looking at more sectors?

Absolutely! The domestic air travel demand is growing very rapidly, even faster than international air traffic. We want to participate in that. We have placed an order for 75 brand-new 737 MAX aircraft, which would begin to be delivered next year, and we would grow domestically.

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