How Team Air Asia led by Mittu Chandilya is

readying for take off

ET dated 20 Sept 2013 -Article by Moinak Mitra ET Bureau

On board Air India's AI-142 from Delhi to Chennai, three rows ahead of where I'm seated, a man
with a spiked mane takes the window seat in coach class and asks the steward for a glass of
water. He takes off his shades and constantly looks at his watch until his water arrives. A gulp
down, he hands over his jacket to the steward before settling in on Seat 6A. Throughout the twoand-ahalf-hour flight, the discerning 32-year-old newly appointed CEO of Air Asia India, Mittu
Chandilya, is taking notes on the time it takes to fetch the glass of water; the variety, quality and
freshness of the menu on board; the fact that the captain made an apology for not having in-flight
entertainment due to a 'technical snag'.
Chandilya is looking at every detail ground up before flying his three A320s, which he has leased
from parent Air Asia Berhad of Malaysia, when Air Asia India a three-way 49:30:21 jointventure between Air Asia Berhad, the Tata Group and the Arun Bhatia-led Telestra Teleservices
gets license from the government to take to domestic skies.
Hat Trick
The next morning, at Air Asia Berhad's spartan 600 square-feet office on the sixth floor of a mall,
a few folks stay riveted to their laptops until one by one the top management troops in.
Chandilya seldom visits the 'city office'. For him, airport is where the heart is. He prefers
wearing multiple hats, at least for the first two years of his tenure, to get a hands-on feel of a
first-time aviator. He has even picked up ramp bags of passengers at the check-in counter and
beyond when the Air Asia flight docks in at Chennai airport from Kuala Lumpur. Until recently,
it was the finance function that was consuming most of Chandilya's time, a job he's now handed
to the new CFO Vijay Gopalan.

How Team Air Asia led by Mittu Chandilya is

readying for take off
ET dated 20 Sept 2013 -Article by Moinak Mitra ET Bureau

The 32-year-old Gopalan has acted in Tamil film Kadalagi and also donned the hat of a
consultant for eight years covering the oil and gas sector in Ernst & Young. Prior to signing up
with Air Asia, he headed finance in the India arm of Fortune 500 hospitality major Compass.
During the job interview, the multifaceted CFO recalls being drawn to Chandilya's discipline and
determination, as well as his ability to wear many hats-as an entrepreneur, model, manufacturing
honcho at Ingersoll Rand and HR consultant with Egon Zehnder-with elan.
Gopalan's job is cut out. His main worries now center around ATF (aircraft turbine fuel) and
headcount. "We need to optimize both these important inputs from the onset," he says. That sets
the ball rolling for multi-tasking. Gopalan holds an advanced diploma in marketing and sales and
recently helped Chief Commercial Officer Amisha Sethi solve a marketing problem. Simply put,
the team was trying to thrash out how credit card holders can save the surcharge when they book
on Air Asia through online travel agents (OTAs). That's where Gopalan's inputs came in handy.

How Team Air Asia led by Mittu Chandilya is

readying for take off
ET dated 20 Sept 2013 -Article by Moinak Mitra ET Bureau

The Base Effect

Team Air Asia is working toward their tagline-'Now Everyone Can Fly' and Mittu & Co. are
going the extra mile to realize that dream. "I'd like to give 50% off over what other people are
traveling and so I've used that as my starting point. Everything else is being worked backwards,"
says Chandilya.
The 33-year-old Sethi brings experience from the telecom environment. She's looked at the turf
both from a service provider's perspective with Airtel and when she worked with handset-maker
BlackBerry. Sethi likes to spend time at bus stops and railway stations talking to people. "You
have to see the tipping point at which the passenger is willing to fly, since that is not even in his
evaluation kitty now," she says. "Low price may be the magnet, it can never be the overall driver.
Along with affordability, it is about embracing customers."
So how low is low? What kind of price points is she actually targeting? She cites the cost of a
train ticket from Chennai to Bangalore as Rs 600-700, which tots up to Rs 1,800 in a luxury bus.
"What stops you from Rs 400 extra for flight," she asks. Good point, but then consider the oneand-a-half-hour commute from Bangalore airport to the city and a couple of hours for security
check and boarding. Along with these insights, she's trying to come to terms with that "sweet
spot of association"
As the airline waits for its license, Sethi and her colleagues are aware that they'll be left with
little breathing space. There's already talk of Air Asia coming out with an aircraft every month
after the launch. Sethi is using the time to get a fix on brand communication, positioning, market
segmentation, pricing, network planning, revenues, and so on and so forth. "Everything has to
come together," she says with a sense of urgency.
Chandilya also lends a helping hand unexpectedly. At a meeting the previous evening with
prospective advertising partners, he took a long hard look at the creatives and while he said they
were razorsharp and simple, he wanted them to be more experiential. Again, she emphasizes, it's
not the price alone where Air Asia wants to be disruptive, but the overall flying experience.
Beyond Price
That's where Neha Dikshit, Manager, Flight Operations, steps in. Having served Jet Airways, Air
Deccan and Kingfisher, Dikshit recently trained in Air Asia's facility in Malaysia. She believes
the experience at the check-in counter is the most critical as this is the first contact point of a
passenger with an Air Asia staff member. A major revenue stream for Air Asia could be ancillary

How Team Air Asia led by Mittu Chandilya is

readying for take off
ET dated 20 Sept 2013 -Article by Moinak Mitra ET Bureau

services-food, strategic seats with leg-room etc.-which account for nearly 25% of its global
revenues. In India, the figure is under 5%, and Air Asia would like to create a culture where
people are willing to pay for extras.

The 29-year-old Gangtok-born Ningku Lachungpa is in charge of ancillaries as part of project

management at CEO's office. An MBA from Oxford and the University of Bath who worked
with Accenture in the UK as a telecom consultant, Lachungpa had a stint as an entrepreneur
when she set up a real estate project in her home-state, Sikkim, before being spotted by Air Asia
co-founder and promoter Tony Fernandes in his reality show The Apprentice Asia.
Lachungpa made it to the final round with 12 participants where she got eliminated pretty early
but made an impression that cast her career in iron. "I'm a highachiever, a go-getter and a very
organized person," she says on her selection for the job. While she won't disclose the secret sauce
for shoring up ancillary revenues, Lachungpa is doing her bit too to undertake every cost
discipline to live up to the tagline of making more people fly. For instance, she takes the
suburban train to work every morning from near the airport where she lives. "When I come to the
city office in a taxi, I don't put that down in the office expense as each of us are aware that even a
Rs 10 saving is a saving," she says.
Chandilya can live with such cost discipline. For the three aircraft scheduled to fly once licenses
and clearances are in place, he has earmarked 100 people per aircraft. Living up to that number,
he has so far recruited about 250-odd folks. "After a certain scale, with more planes, you'll see

How Team Air Asia led by Mittu Chandilya is

readying for take off
ET dated 20 Sept 2013 -Article by Moinak Mitra ET Bureau

leveraging happen and we'll get that number down significantly," he says. While the competition
in India relies on 80 people per plane, for Air Asia globally, that figure rests at a more
manageable 70.
Ground For Grounding
"When you look at India, the competitive environment is not rational wherein you have a
situation where full-service airlines, like Jet Airways and Air India at times sell fares lower than
low-cost carriers. Promoters in India seem to have an appetite to lose money," says Kapil Kaul,
CEO of Centre for Asia Pacific Aviation (CAPA).
The promoters have pumped in $30 million to the Air Asia venture, but will that be enough?
Naysayers point out that when IndiGo launched in 2005, it had a business plan chalking $100
million. "The investment should take care of losses and all project costs for at least two years
after the launch. They're seriously under-capitalized," says a consultant.
Moreover, in the second quarter of this fiscal, CAPA estimates that all airlines in India will lose
$450 million combined. Besides, since 2007, the losses of the industry sit at an uncomfortable $9
billion with debt totting up to $19 billion.
But Chandilya is unfazed. When he holds his Monday meetings morning with HODs, everything
converges into a single plankexecution. "When I send something, I get very impatient and
impatience for me, unfortunately, leads to lack of trust," he says. "I don't care about people's
backgrounds. All I care about are their ambitions, dreams and hunger. I want the hungriest person
in my team," he says.
Sprinters To Marathoners
Chandilya is looking for sprinters, who can eventually transform into marathon runners. That's
exactly what he tells his cabin crew member Pawan, who wants to be a CEO. Every three weeks,
he checks on him to learn how he's doing and asks Neha Dikshit for updates on his progress
confidentially. Pawan is 23 and says Chandilya inspires him since he made it to the corner office
at 32. At this stage, as Chandilya sets out to build a culture of focused accountability. He's clear
too from an empowerment standpoint. "If you do HR, you do it so well that someday you can
outsource; you do finance so well, learn to hedge, learn how to invest right, and then teach other
companies how to do it, become a consultant. Everybody has a chance to be a profit center.
That's my attitude."
To Fly, Or Not To Fly
Though much depends on when the airline gets its license, Chandilya is aiming for a December
launch, though he has contingency plans built for four different launch periods. He hasn't

How Team Air Asia led by Mittu Chandilya is

readying for take off
ET dated 20 Sept 2013 -Article by Moinak Mitra ET Bureau

plugged the pricing per slot per plane for the simple reason that the slots are non-existent. He
doesn't know when the planes will leave. "I think I'll be ready when I know plane per plane,
what's our pricing, what's our cost and that's one thing I'll never compromise on," he says. That
explains why he's reluctant to rush through the launch even if licenses were to come tomorrow.
"I'd rather have two months time to open for sales. If I feel we haven't got the pricing that I want,
we won't launch."

How Team Air Asia led by Mittu Chandilya is

readying for take off
ET dated 20 Sept 2013 -Article by Moinak Mitra ET Bureau

As for the $30 million in paid-up capital, Chandilya feels he can take to the skies with 20% of
that mount. "I can sign up the whole amount right now as it is sitting there in a bank in FD. But
you need to make sure there are controls on how we're spending and so I'm very careful on our
expenditures. We can go the next 8 months without getting to touch that."
Captain Gopinath, the father of low cost carriers in India, says Chandilya can succeed if he stays
focused. "He should be able to do it if he seeds a low-cost culture in India. With only 3% air
travelers, India offers a huge market. As an entrepreneur, you have to expand the market, not
cannibalize with the existing passengers. You have to convert the train passenger to an air
passenger," he says.
Chandilya is pursuing just that. While his team is out talking to the train and bus passengers to
figure out the tipping point when they will pay to get airborne, he is ensuring a culture of fierce
accountability across his organization. When he signed up with Air Asia in May, for instance, he
even took a pay cut. Of course, Chandilya's charm and his ability to walk the talk has a rub-off
effect. After all, when the CEO flies coach class and takes notes quietly by a window seat,
everybody looks up.