The Indian civil aviation industry’s rising costs and losses have been dominating the news for some time now. Some giants in the past have got deeply entanged in this web and even declared bankruptcy. Recently, Jet Airways has been saved from hitting rock bottom having been bailed out by Etihad.
For most part of last year, the cost of running an airline went up predominantly because of rising fuel cost and devaluation of the rupee. In the airline industry, most purchases are sourced internationally, thereby resulting in additional foreign exchange spend, which in turn increases the burden on costs and profitability.
IndiGo Airways has not been spared media onslaught either. With its stock diving over 7 per cent in 10 days and the carrier struggling to hire talented pilots, it is surely creating a buzz in print and mass media for all the wrong reasons.
HRKatha spoke to Raj Raghavan, CHRO, IndiGo, and asked him about the complex dynamism of the aviation industry and how IndiGo is juggling with rising costs as well as the hiring and training of pilots and captains.
Why is the aviation industry so badly hit?
Since early last year and up until December, aviation fuel prices went up by approximately 40 per cent as compared to the previous year. Just as a reference, aviation fuel is a major portion of an airline’s costs and when you look at this particular cost component rising in proportion and add the complexity of a weakened rupee, these two costs contribute to almost 50 per cent.
Does it impact employee morale?
There is a cost to doing any business. In my mind, while cost is an expense item (debit), employee morale needs to fall on the credit side. When an organisation treats its employees fairly and respectfully, employee morale doesn’t sag. As you may already know, IndiGo has never defaulted on salaries from the time the airline was launched, in 2006. In addition, it has consistently paid bonuses each year and its compensation levels are well benchmarked to the industry.
That is not all. IndiGo continues to regularly invest on employee training and development. At any given time, its ‘ifly’ training centre in Gurgaon has over a thousand employees under training. The training covers a wide range of areas, including several regulatory type trainings as well as customer service and other soft skills. For instance, all members of Indigo’s cabin crew undergo a rigorous 99-day course at ‘ifly’ before they start flying. At the end of the course, qualified employees attend a ‘graduation’ ceremony to which their parents, kith and kin are invited. Similar programmes are held for others too, including first officers, captains and engineers. And just as in the case of the cabin crew, these graduation ceremonies are attended by the parents, spouses, kith and kin of the employees. Indigo boasts of comprehensive training programmes for all categories of its staff.
“When you run a company, you don’t let your shoulders droop when cost lines go up. You must have a long-term vision and remember that the key component of a company is its employees,” says raj Raghavan, cHRo, indigo
How does IndiGo continue to motivate its employees?
IndiGo runs a unique celebration event named, ‘IndiGoVaganza’ across stations (airports) for all employees about nine to twelve times a year. While the event is aimed at rewarding and recognising its staff, it is by and large about celebrating people and thanking them for their contribution to the Company. The programme typically begins around five in the evening and ends after dinner. Key leaders participate in IndiGoVaganza along with the station staff. All these things continue to happen every year and there is more. IndiGo is also proud of its football and cricket teams. While the football team in Mumbai wins corporate tournaments almost every quarter, the cricket team in Bengaluru is doing very well too!
The Airline’s CSR programme—IndiGo Reach— is making a difference to several communities around where its flights operate. Indigo has adopted several schools, helping the students with upgraded science laboratories and also computer education. In addition to building labs at schools, it operates mobile computer centres equipped with several desk-top computers. These centres are buses that move around identified schools in these communities, with teachers and students on board to conduct classes and facilitate learning. During the evenings, the same buses get converted into mobile movie theatres where students are shown educational videos.
When you run a company, you don’t let your shoulders droop when cost lines go up. You must have a long-term vision and remember that the key component of a company is its employees.
What about pilot hiring? Is there a shortage of pilots? How is hiring pilots different from hiring employees in other industries?
We run an efficient airline and we have approximately 6.65 pilot pairs for every plane that we operate. Overall, we employ around three thousand pilots and several of them have been with us for many years. If you benchmark these numbers in the context of the Industry, you will know they are globally comparable and most airlines will be proud of this.
As for pilot hiring, we have several approaches to it. At the grass-root level, we have collaborated with select few flying schools globally for a ‘cadet programme’. Through this programme, we have the first right to hire trainee pilots, which provides us with a pool of employees at the fresher category. We also hire fresh CPL holders as junior first officers almost every month. They then undergo strenuous classroom and simulator training. Thereafter, they graduate to fly as first officers alongside tenured captains. In addition, we do several hundred upgrades from senior first officer to captains each year. This is akin to what one would generally refer to as talent development. In addition, we are one of the largest recruiters from our Indian Airforce and Military. We also do lateral hiring but unlike other industries, you cannot hire a captain and expect her to start work the next day. Each category of aircraft requires significant regulatory training before one can start flying the cockpit.
Among the many industries that I have worked in, the airline industry is probably the most regulated one, and for the right reason. Starting from the fuselage, to the pilots and the cabin crew as well as our maintenance engineers, are all regulated. Even the way they are trained is regulated. At the end of the day, the key is passenger safety and our regulations leave no stone unturned to make sure that it is absolutely safe for our passengers.
To join, grow and to leave IndiGo (if at all) should be a frustration-free exercise.
Finally, I want to see IndiGo as a magnet that attracts top talent, and this is not only about hiring great pilots and cabin staff but personnel across all our functions and departments. I personally believe that employees love coming to work at IndiGo as they feel they can fulfil their personal dreams of working at a top-class organisation. This means my team and I need to make it a frustration-free employee experience for our colleagues. To join, grow and to leave IndiGo (if at all) should be a frustration-free exercise. This can only be done by combining HR technology and analytics with a heart! This is very challenging work and I am blessed with phenomenal co-workers in HR to help us accomplish this.