IndiGo may hire former staff to set up regional operations
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New Delhi: InterGlobe Aviation Ltd, which runs India’s largest airline IndiGo, is likely to hire some of its founding employees to set up its regional operations, a person with knowledge of the matter said.
Shakti Lumba, who helped set up the low-fare airline’s operations in 2005, is among the first few employees to be brought back to set up the regional division, the person said.
Lumba quit Indigo in 2009 as its vice-president of operations. Before joining IndiGo, he was with Air India where he led the national carrier’s regional airline arm Alliance Air.
IndiGo is also likely to rehire Sunita Srivastava, who was till recently vice-president-flight operations control centre and dispatch at the airline and was also part of the founding team. She has also worked with Air India and Alliance Air. Srivastava is likely to be part of Lumba’s team, according to the person cited above.
Lumba declined to comment.
IndiGo declined to comment on the matter.
The airline, on Tuesday, announced it has signed a term sheet with French aircraft maker Avions de Transport Regional GIE for the purchase of 50 ATR 72-600 aircraft. A term sheet becomes a firm order after both sides sign off on the deal.
IndiGo plans to launch its turboprop operation by the end of 2017 and expects to induct as many as 20 aircraft by December 2018.
Unlike the narrow-body aircraft like Airbus A320 and Boeing 737, procuring pilots is the most critical resource for an ATR operation. Most graduate to bigger jets after putting in enough hours on their log book.
Among major airlines, only Air India, Jet Airways and SpiceJet use turboprop planes in India.
“We pay Rs7 lakh (per month) to out ATR captains. This will lead to a war for talent. Fares will also come under pressure,” said an Air India official who did not wish to be named, adding many of its ATR pilots are foreign hires because of lack of local availability.
Air India is also adding over half a dozen ATR planes and it too will need more trained captains and co-pilots.
Lumba, a former pilot, is likely to help bring in pilots.
IndiGo’s regional foray will create more jobs across other areas also. The airline on Tuesday said it would start hiring soon.
The new regional foray will be run as a separate division under IndiGo. Its core operations will be carried out by the existing team and the new one will benefit from a common human resource and legal department among other departments.
IndiGo’s foray into regional operations could be because of multiple reasons, said an analyst who did not wish to be named.
For one, there was a clear government policy in place in the form of Udan which provides subsidy to airlines to fly new or under-served routes.
Second, the airline will now be able to fly to 20 more airports, to which it could not have flown with its bigger A320s. This means wider market penetration, the analyst said.
Third, it will be able to complement its existing network by selling routes like Delhi-Bengaluru-Mysuru where passengers would otherwise have flown the Bengaluru-Mysuru leg on another airline, the analyst added.
Fourth, it could potentially start its ATRs in the South first. The South has always had a higher number of short-haul flights and is not slot-constrained like Mumbai and Delhi airports.
Former Jet Airways CEO Steve Forte termed it as a smart move.
“The regional traffic needs to be developed further and, with the recent governmental incentives, it is a good opportunity for IndiGo to jump in this market. They have a great advantage over other domestic carriers by being profitable in their present routes. This means that when they launch their new regional flights, they will have time to develop these new markets and operate at a loss for a certain period of time, by subsidizing the operation with the profits of their established routes,” he said.