High flier

When most domestic airlines in India were counting their losses in 2007-08, this was one airline that posted a profit. Today, when others are cutting back on routes and frequency of flights, he has (since September) expanded Paramount’s operations into western India. M. Thiagarajan is truly living up to his image as a contrarian. Flying and astronavigation may be his passion but his business philosophy is firmly rooted to the ground. “Top line is vanity. Bottom line adds some sanity to it. Cash flow is the reality,”’ he says. It is this guiding principle that made him withdraw Chennai-Bangalore flights soon after the new Bangalore airport was inaugurated. He rightly judged that the traffic would drastically fall in the sector due to distance and time factors. Consequently, as other airlines grappled with unviable passenger load factor in that sector, he redeployed the aircraft to launch Chennai-Tiruchirapally service.

Name: M. Thiagarajan Age: 31 Designation: Managing Director Institution: Paramount Airways

His business acumen and the ability to choose the path less travelled is a crucial differentiator. After the government opened up commercial aviation, all the new players rushed in to book Airbus and Boeing aircraft. But he opted for the 70/75 seat Brazilian Embraer jets. The choice of aircraft was a masterstroke in terms of lowering operational costs. Fuelefficient Embraer jets need lesser maintenance and have shorter turnaround time. As they weigh less than 40,000 kg, the tax on fuel is just 4 per cent compared to 34 per cent for bigger jets. They do not suffer any landing or parking charges, too. Moreover, unlike his competitors, he did not spread the cheese fine. Instead of launching operations all over India, he focussed his five aircraft fleet on south India, offering maximum frequency. In a short time, Paramount became the market leader with a 26 per cent share of southern Indian skies. His positioning of the airline was also off-beat.

Paramount offered top-end service when low-cost travel was the flavour of the season. “In India, there is no low-cost model, only low fare,” he explains. The present crisis in the industry is due to irrational pricing and over-capacity, he says, adding that corrective measures are already on with consolidation and reduction in capacity. Will Paramount be part of the Kingfisher-Jet alliance as media reports suggest? “Let’s see how the alliance between the two goes. If there is anything beneficial for us, we will look at it,” responds Thiagarajan, who is based in Madurai. Opportunities are something he seldom lets go.

—N. Madhavan