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Sanjay Aggarwal | A spicier challenge than salsa

Sanjay Aggarwal | A spicier challenge than salsa
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First Published: Thu, Jan 21 2010. 09 09 PM IST

Turbulent skies: Aggarwal has a tough challenge, with nine low-cost airlines competing for 150,000 flyers a day. Jayachandran / Mint
Turbulent skies: Aggarwal has a tough challenge, with nine low-cost airlines competing for 150,000 flyers a day. Jayachandran / Mint
Updated: Thu, Jan 21 2010. 09 09 PM IST
Sanjay Aggarwal examines the menu and asks for a glass of Merlot. Then, on an impulse, he says, “What the heck, I’ll have beer,” and orders Amstel Light. We are at The Bar, at the Trident in Gurgaon, and Aggarwal conspiratorially leans across and discloses that his 10-year-old daughter has prohibited him from drinking beer. “She has this notion that beer is bad, so I am not allowed to drink any beer at home. She lets me drink wine and Scotch though,” he says. It is almost impossible that a meeting which begins on a note of connivance against a 10-year-old, for the forbidden pleasure of a chilled glass of beer, would be boring. I settle in for an interesting session.
Turbulent skies: Aggarwal has a tough challenge, with nine low-cost airlines competing for 150,000 flyers a day. Jayachandran / Mint
Aggarwal joined as the CEO of SpiceJet in October 2008 in what was possibly the worst of times for the Indian aviation industry and the company. A month before that, when he quit his job at Flight Options in Cleveland, US, his plans were very different. He was going to learn salsa. The dance institute had been identified and he had convinced his wife that she too should take six months off to dance and travel. But three weeks before the start of his sabbatical, he received a call from a recruiter about a job with SpiceJet in India.
Aggarwal said he wasn’t interested but the recruiter sent him the job profile so he could forward it to other people who might be. He looked at it, saw the list of names of investors starting with Wilbur Ross and after consulting with friends and family, decided it was worth a meeting.
“My last day at Flight Options was 17 October (2008). So when SpiceJet asked when I could start, I did the math and said February or March. They said, well, how about 20 October? The company did not have a CEO for three months. So we postponed the plan to dance and travel and came to Gurgaon on 20 October,” he recounts.
Of course, none of this was as easy as it sounds. “My wife and I had numerous conversations about coming back to India. Our impression, from our holidays here, was that life is really tough in India. Then we thought it would be fascinating for the children (anti-beer activist Mahima and her younger brother Nandan) to go through a change. The days of born, raised and worked in the US are over. If you are a professional, you have to travel and work international assignments to be successful,” he says. But there are difficulties in adjusting to life in India, he concedes.
Aggarwal was away for 17 years and the country and its corporate landscape had changed significantly in the meantime. He was pleasantly surprised to discover that the government machinery was now efficient, transparent and effective. When he started his career in 1988 in India, fresh out of engineering college (Nagpur University), Aggarwal worked for Microwin, a microwave oven manufacturing company, in Bhopal. In his four years there, he also handled customs and central excise issues, and experienced first hand the labyrinthine ways of the bureaucracy in the 1980s. He went to the US in 1992 to pursue his master’s degree in operations research from Virginia Polytechnic Institute and State University (Virginia Tech University). US Airways hired him before he completed his course.
In US Airways in Arlington, Virginia, Aggarwal was selected to be part of a “high-pot” group, a group of 40 employees from among 40,000 whose high potential was spotted and were groomed to become future leaders of the organization. He quit six years later when United Airlines acquired the company. He moved to Marriott International, Inc., where he was part of an internal consulting group, working on cost reduction, revenue generation and even information technology strategy. “Aviation is a 24x7 job, hospitality is an easier industry. I would reach home by 6.30 every evening. It was great work-life balance. But after some time it got to me. I am a fast-paced guy,” he says. So when a former colleague called and asked him to join the loss-making company Flight Options, he allowed himself to be convinced easily. They moved to Cleveland despite his wife’s aversion to the cold. Flight Options reversed course and from losing $100 million (around Rs455 crore now) a year, it moved to a profitable $20 million. Then a private equity fund bought the company and Aggarwal decided it was time to conquer salsa.
Aggarwal is convinced that he did the right thing by joining SpiceJet. But he is still struggling with the nuances of living in India. He tries to be both American and Indian. He breaks into Hindi every once in a while, but calls cola “soda”. Dressed in standard CEO attire of jacket without a tie and a Rolex watch, he is the quintessential returning NRI. He is sufficiently comfortable with his Indianness to wear a dhoti and fold it in half while on a holiday in Kerala, yet he is American enough to be agitated by the natives’ habits of spitting on the road and inability to maintain a queue.
“I did my own reference checks, heard the good and the bad, and a lot of people told me that going to Indian aviation at this point of time was not a great idea,” he says. “What I believed was that Indian aviation was still in its infancy. I knew that the low-cost model was the right model and that SpiceJet was the right player in the industry. If we needed capital to turn it around, I knew that capital would be available. Now, 12 months later, I feel my instincts were right. Aviation will continue to grow for the next decade at 12-15% (annually) and SpiceJet is the right model,” he adds.
December was a great month for the company and Aggarwal is confident that if conditions remain favourable, SpiceJet will be able to post its first profitable quarter soon. His focus, since taking over the company, has been on profitability. “It’s not easy, our business is subject to a large number of factors—demand, yield, fuel, currency fluctuation and quality of service. Our quality of service needed some attention. We were on a cost-cutting mode. The point is, you can’t save to profitability, no one becomes a billionaire by saving. Our quality of food was sub-par and wastage was running at about 30%. In the last 12 months, our food sales have gone up 300% and our waste has gone down to 10%. And for the same price, we are selling better quality food. We have become smarter about what we sell and how we handle it,” he says.
Despite this great start, aided by a favourable turn in the economy and consumer spending, there is a lot that Aggarwal has to do. Aviation in India is a very competitive game—at last count about nine low-cost airlines were fighting for 150,000 flyers per day. Aggarwal has enough experience in aviation to make SpiceJet work. The bigger challenge for him is convincing his children to live in India.
veena.v@livemint.com
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First Published: Thu, Jan 21 2010. 09 09 PM IST