Why Naresh Goyal should meet Nusli Wadia

If for nothing else, to figure out how to keep a cap on headcount cost

So, GoAir bid goodbye to Jyri Strandman, its chief operating officer (COO), and speculation was rife on whether he was asked to go or had quit. Since nobody really cares which of the two resulted in his departure, I didn’t bother to dig deeper. The airline has a chief executive officer (CEO) in Cornelis Vrieswijk, but no chief financial officer (CFO).

The joke in the industry is that soon, the father-son duo — Nusli Wadia and his son Jeh Wadia — would be piloting their own aircraft. I have a separate ex-GoAir directory on my phone and have lost track of who headed it when, who had been head of finance, when and so on. I do know that it has had over 10 heads of HR in its 13-year existence. It is by far the toughest job in India’s aviation sector today.

This brings me to another interesting and rather miraculous aspect of what it has achieved. It fails to retain people and guess what, it seems to do quite well without them. This airline is turning all HR theories and related mumbo jumbo on its head.
 

Despite having very few people in charge at the top for long periods and continuous churn, GoAir has been running quite well. The airline has high loads, a decent if unremarkable product offering and perhaps the second lowest cost per seat kilometer — a critical variable for success in the low cost carrier (LCC) business. It hasn’t set a scorching pace of growth in its decade-plus existence — fleet size is 41 at present and market share pushing 9 per cent — but neither is it giving heart attacks to players like Jet, SpiceJet and the former king of good times. It just good-naturedly ambles along, somewhat like a baby elephant.

Salaries are paid by and large on time. It’s not defaulting on payments to vendors, nobody is accusing it of being lax on safety or of being arrogant or rude to passengers. It’s not living hand-to-mouth or teetering on the brink of a crisis like many of its peers at all times. In short, I consider it quite a miracle of sorts. The beauty of GoAir is that it sort of manages to run on auto-pilot. 

This brings us to a larger question. Is less more? Can the airline business be run with less people at the top? Are all the other players not getting something here? Can’t they too fire some of the top staff, cut their salary bill substantially and see what happens? 

I spoke to a few former GoAir personnel from my list and here’s what I gleaned. Thanks to a rather paranoid check kept by the senior Wadia – who incidentally doesn’t live in Mumbai anymore – followed closely by his son, they manage to keep a hawk eye on costs even from a distance. This includes keeping a check even on bills signed by the CEO, COO or CFO. So any tiny bill — even a lunch or a car hire — can be questioned by no less than the senior Wadia himself. Trust is at an all-time low here.

Understandably, this paranoia doesn’t go down too well with senior employees who have usually had a pretty free hand in running things at their previous assignments. Of course, there are boards to be answered to and large spends have to be explained and justified, but lunch bills? Well, not everyone is willing. This explains partly why the airline has been an idling spot for those looking for a job to hang around for a bit, while they hunt.

A second problem why senior management level executives are wary of working for GoAir is that you can get sued anytime. This, it appears, can happen even if you are not legally hired. A former HR head told me that in at least one case — a senior IndiGo expat who had negotiated with the airline and then didn’t join — the promoters had considered filing a suit. More recently, they sued former CEO Wolfgang Prock-Schauer, a well respected industry professional who worked peacefully at Jet for many years and is now with IndiGo, alleging he stole company data. 

In conclusion, I have to say that what GoAir manages is actually worth a study and its peers could take some lessons in how to minimise the impact of vacant positions at top levels. Naresh Goyal in particular may like to meet up with Nusli Wadia in Dubai.