A few years ago at the air show in Hyderabad, Rahul Bhatia, one of the two principal shareholders of Interglobe Aviation, was spotted alighting at one of the hospitality lounges from the kind of large golf buggies used by the public. An observer recalls complimenting Mr Bhatia for his down-to earth manner in an industry often defined by the flamboyance of a Vijay Mallya or a Richard Branson. Mr Bhatia reportedly replied, "I'm not running a lifestyle business. I am running an airline."
In an interview with Business Standard last week, Mr Bhatia was equally direct about the Indian government's convoluted rules that forbid Indian airlines from managing their own ground handling services. "The regulations say that (for) anything that touches the plane, only employees can do the handling but, as soon as that person leaves the plane and starts walking towards the terminal, he becomes a security risk," Mr Bhatia said, adding that he had heard that the government might review this. "The reason you become a security threat is because... that's where all the money is."
The two comments encapsulate the promise and the challenge for IndiGo. It has kept an accountant's eye on costs to become the most profitable airline in India despite being hemmed in by the strange rules that have long bedevilled this sector. As IndiGo's market share hit 37 per cent this year - including a staggering more than 50 per cent share in smaller cities that make up non-metro to non-metro traffic - the big question is how much further the government will allow IndiGo to grow before it runs into regulatory rules to constrain it, Ambit observed in a report ahead of Interglobe Aviation's initial public offering, which closes Thursday.
28/10/15 Rahul Jacob/Business Standard
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In an interview with Business Standard last week, Mr Bhatia was equally direct about the Indian government's convoluted rules that forbid Indian airlines from managing their own ground handling services. "The regulations say that (for) anything that touches the plane, only employees can do the handling but, as soon as that person leaves the plane and starts walking towards the terminal, he becomes a security risk," Mr Bhatia said, adding that he had heard that the government might review this. "The reason you become a security threat is because... that's where all the money is."
The two comments encapsulate the promise and the challenge for IndiGo. It has kept an accountant's eye on costs to become the most profitable airline in India despite being hemmed in by the strange rules that have long bedevilled this sector. As IndiGo's market share hit 37 per cent this year - including a staggering more than 50 per cent share in smaller cities that make up non-metro to non-metro traffic - the big question is how much further the government will allow IndiGo to grow before it runs into regulatory rules to constrain it, Ambit observed in a report ahead of Interglobe Aviation's initial public offering, which closes Thursday.
28/10/15 Rahul Jacob/Business Standard
