Kiran Rao is relieved that his BlackBerry seems to have a problem. He says it is a good omen, it gives him unhindered time with Lounge. I meet Toulouse-based Rao, executive vice-president, marketing and contracts, for European plane-maker Airbus SAS, at the Taj West End, the green 120-year-old luxury hotel in Bangalore.
Rao is just back from Tokyo after playing golf with executives of All Nippon Airways, and overdosing on sushi. “They invite us to play golf every year. It is all part of the relationship, because Japanese culture is about doing business with someone you know and you trust,” says the Bangalore-born Rao in a clipped British accent as we head for the coffee shop, Mynt.
Take off: Kiran Rao switched from designing planes to selling them. The Indian skies might seem crowded now, but he says there’s room for tremendous growth. Jayachandran / Mint
The 46-year-old executive, dressed in a grey suit and red tie, ignores the lavish breakfast buffet and settles for a masala dosa. He loves Indian food and serves home-cooked food when he has guests from India, such as Vijay Mallya, G.R. Gopinath and Naresh Goyal, in Toulouse, where the planes are made.
Japan is just a three-year-old market for Rao, but it reminds him a lot of the India of 1996, when he moved from being marketing director for Airbus in the US to set up the India operations. India was trailing Africa in custom for passenger planes and Airbus had only one customer: Indian Airlines. The memories of the A320 plane crash in Bangalore in 1989 were still fresh. “We practically had nothing. Most of the planes were quite old. It was a challenge building up from zero,” he says of those first days when he, his British wife Alison and cousin Navin operated the office in New Delhi.
The US is still a large market for passenger planes, followed by Europe and then Asia, led by China. But in 20 years, most forecasts predict Asia, led by India, will be the main market for new aeroplanes, followed by Europe and the US.
Rao, who continues to head the India operations, has greyed a little since we last met in 2007 at the Aero India show in Bangalore, a season when Indian airlines companies ordered planes by the dozen. In 1996, Rao had predicted that a total of 220 planes would be acquired by India in 20 years. But the launch of low-cost airline Air Deccan, followed by airlines such as Kingfisher and SpiceJet, changed the business dynamics. “We got it completely wrong. Because we sold more planes, more than that in a five-year period. The Indian economy also stepped up during that period,” he says. “The next one we are going to release is the same or slightly better, but if you ask me sitting here, in 20 years’ time, I think we would have underestimated this opportunity again.”
The steward waits for his next order, and Rao asks for an orange juice, while I opt for tea.
Airbus has forecast India will have more than 1,000 planes by 2028, up from the 330-odd planes currently. But right now, most airlines are suffering from overcapacity, and are bleeding. “It will change. Most of the airlines are young and new. They have gone through massive growth in a period where you went from massive growth into a deep recession. Airlines in different parts of the world had big cash balances when going into that,” says Rao.
Selling planes, however, was not Rao’s first choice. While growing up in Bangalore, his favourite sports were cycling and swimming—but he wanted to be a pilot. He could not pass the “click click” test, however, when his ears were tested for high frequency noise.
The next option was designing planes. He did his BSc in aeronautical engineering and later a PhD in transonic aerodynamics, sponsored by British Aerospace (now BAE Systems), from City University London. That’s also where he met Alison. He went on to join British Aerospace as a flight control systems engineer and moved to its marketing arm in 1989; this brought him to India.
“When I went and told my head of engineering, he told me only stupid people go to sales,” he recalls. In 1992, he joined Airbus as marketing manager in France, but as he grew within the organization, Rao was pulled into the design team of A350XWB, Airbus’ answer to arch rival Boeing’s dreamliner or 787.
“I was basically the customer’s voice; they all believed what 787 could do, and we had to do the same thing,” he says. This is when he put his engineering background to use. Boeing’s new plane, whose first flight has been delayed by as much as two years, uses the latest technologies such as carbon composites and promises better fuel efficiency. “Coming up with the concept, testing it in the market, being perceived by the market as being behind Boeing in technology, and then the realization that (the) technology itself was not mature enough, has been a fantastic five years. You have gone through the complete cycle of all the bullshit to the reality,” says Rao, who often uses long flights to relax and get away from phone calls and BlackBerry messages.
Rao managed to use his company’s increasing interest in India to do something for his city, Bangalore. When Airbus planned to set up an engineering centre in India in 2007, as an alternative to a manufacturing facility in China, he pushed for Bangalore over other cities, notably Hyderabad. “When the then CEO, Noel Foregard, asked me, ‘Why do you insist on Bangalore?’ and I said, ‘Because I was born there,’ his remark was, ‘That is good enough reason’.”
Despite all the globe-trotting, Rao does manage to spend time with his three children. Elder son James is working hard to get his pilot’s licence before his 18th birthday, while his second son, Mathew, 15, is into racing—he has just bought a go-kart and competes with older racers. Emma, his 11-year-old daughter, is a party-hopper, he says.