Ease of Doing Business for MSMEs: 2019 was one of the best years for Subhash Goyal’s business-to-business travel and tourism marketing company STIC Travel. The company was the exclusive General Sales Agent (GSA) — a sales representative of a company in a specific region or country – for 11 international airlines in India along with four cruise companies, and three car-rental companies. It also worked with the Indian Railway Catering and Tourism Corporation (IRCTC) for its luxury trains in the country. As Covid-related restrictions grounded the travel and hospitality industry almost overnight in 2020, STIC also nosedived.
Goyal dug into company reserves, secured an overdraft facility from his bank, negotiated with his landlords over the rent of his offices’ premises across the country, requested employees for a salary cut, etc., to survive the situation expecting it to improve in the following months. However, as the crisis took more than expected time to abate followed by the second wave last year, Goyal was left with nothing to fall back on except those lines of business that almost never existed for him – charter services, cargo services, and air ambulances.
“These verticals together contributed not even 5 per cent to my whole business before Covid. I never thought there will be a time when I would have to depend on them to survive. While 2019 was one of the best years for us, post-Covid, we are still alive because of these businesses, otherwise, there are many enterprises in the sector that went out of business after Covid,” Goyal told Financial Express Online.
Goyal activated his charter services under the air bubble pact that India had with multiple countries to fly stranded passengers to and fro. Cargo services were also pressed into action. “When we realised that government had started air bubble, we started providing charter services. For instance, we chartered students from Toronto, Ukraine, Sao Paulo, etc. This kept some cash flow in the bank to pay employees and rent during that desperate situation. We also did some medical evacuation charters. While the demand for medical ambulances was very high, there weren’t many such ambulances available at that time. I also tried to keep my staff motivated through these businesses,” added Goyal.
There were around 200 employees in the company that was reduced to around 160 even as Goyal said he never terminated anyone. From 5 per cent before Covid, charter and cargo services and medical ambulances now make up for around 60 per cent of STIC’s business, enough for Goyal to keep business afloat. He operated at even half a per cent margin and in some cases, cost-to-cost to at least have access to working capital.
“These charter jets belong to Reliance, Adani, Lalit Hotels, Taj Group, and other corporates. We did around 40 international charters and around 150 executive charters a year,” said Goyal. While the government was expected to resume international flights in mid-December 2021, Omicron spread further worsened the plight of the travel and hospitality sector. While STIC continues to grapple with the situation, Goyal is confident that the business would bounce back strongly once Covid curbs are lifted.