Tata set to select new AirAsia India CFO amid claims of foreign control3 min read . Updated: 11 Mar 2016, 04:05 AM IST
Airline's new chief executive officer, however, will be nominated by AirAsia Bhd
Tata Sons Ltd is likely to appoint a chief financial officer (CFO) for AirAsia India to silence critics that say the airline is controlled from foreign shores.
The new chief executive officer (CEO), who is in the process of being appointed, will, however, be an AirAsia Bhd nominee, according to a person familiar with the matter who asked not to be named.
The CEO will likely be of Indian origin, though, like incumbent managing director and CEO Mittu Chandilya, who is expected to leave the company, the person said.
The airline is also set to hire a new commercial head from a local airport firm, the person cited above added.
The new hires are part of the company’s effort to replace the top team, most of which has left (or is leaving). It is also aimed at reviving the prospects of an airline that is floundering after its 2014 launch and which has come under fire for allegedly being controlled by AirAsia Bhd.
Indian rules allow foreign airlines to own up to 49% in local airlines, but stress that management control must be with the local partner.
In AirAsia’s case, this is complicated because Air Asia Bhd is the largest shareholder.
AirAsia India is a joint venture in which AirAsia Bhd holds 49%, Tata Sons 41% and Arun Bhatia of Telestra Tradeplace Pvt. Ltd the rest.
Bhatia has made public statements that the airline is controlled from Malaysia and that Chandilya has little say in decision making.
One of the front runners for the CFO’s position is Air France’s Singapore-based regional head for finance Ankur Khanna.
Kiran Jain, head of airport marketing at GMR Delhi International Airport Pvt. Ltd, is likely to be the new commercial head of AirAsia India.
Amar Abrol, CEO at Tune Money Sdn Bhd, an AirAsia firm, could be the new CEO of AirAsia India.
“Abrol is already in India and has started taking charge from Mittu," said a second person familiar with the matter, who also spoke on condition of anonymity.
AirAsia founder Tony Fernandes did not reply to an email seeking comment. Mint couldn’t reach out to Khanna, Jain and Abrol immediately.
Tata Sons insists that Air Asia India is controlled by the Indian partners.
“All the important decisions concerning the day-to-day operations of the airlines are taken by the management teams of these airlines under the overall supervision, control and direction of the respective boards of directors (which include a majority of Indian nationals). These boards are chaired by long-time Tata veteran, Mr S. Ramadorai (Air Asia India)." a Tata Sons spokesperson said in an email, without answering specific questions.
A formal announcement on the new team may happen at the India Aviation air show in Hyderabad next week. Fernandes may attend the show, said the second person cited earlier.
An analyst said a new management team could be in place as early as next month.
“I see a new top management from April onwards," said Kapil Kaul, South Asia CEO of aviation consulting firm CAPA. “I don’t get a sense that the Tatas are likely to drive AirAsia India but some changes may reflect more involvement in day-to-day operations."
The Tatas are locked in a bitter public spat with other Indian airlines IndiGo (InterGlobe Aviation Ltd), Jet Airways (India) Ltd, SpiceJet Ltd and GoAir, which have told the aviation ministry that AirAsia and Vistara, also owned partly by the Tatas, together with Singapore Airlines, are controlled from Malaysia and Singapore respectively.
AirAsia India started operations on 12 June 2014 with a single Airbus A320 aircraft. The airline has grown its fleet to five, flying to 10 destinations in the country.