Monday, 30th October 2017

E- paper

Tatas set to take control of Air Asia India

Group veteran Sunil Bhaskaran named CEO of joint venture

By Our Special Correspondent in Mumbai
  • Published 11.10.18, 12:55 AM
  • Updated 11.10.18, 12:55 AM
  • 2 mins read
Source: Shutterstock

The Tatas are all set to take control of AirAsia India, the troubled low-cost airline, in which it holds a 49 per cent stake with another 2 per cent held by key figures in the $103-billion group.

Sunil Bhaskaran, a Tata group veteran, has been appointed as chief executive of AirAsia India, while Tata Sons president Banmali Agrawala will replace former TCS chief S. Ramadorai as its chairman.

AirAsia India is a joint venture between Tata Sons and Malaysian low-cost carrier AirAsia Berhad.

The two partners hold a 49 per cent each, while Ramadorai holds 0.5 per cent and R. Venkataramanan, who is responsible for the management and oversight of all the Tata Trusts, holds 1.5 per cent.

At present, the airline’s board consists of five members, including Ramadorai, AirAsia group chief Tony Fernandes, Venkataramanan, and Tharumalingam Kanagalingam, deputy group CEO (airline business) of the group.

The airline has been without a chief executive since Amar Abrol stepped down for personal reasons in May.

The airline, which began operations in June 2014, had earlier said that Abrol would be moving back to the AirAsia Group headquarters in Malaysia to work on group strategic projects with effect from June.

Abrol was the second CEO after his predecessor Mittu Chandilya was forced to leave the airline. During Abrol’s time, the airline had expanded its fleet to 18 planes from six and the people and network by three-folds.

Bhaskaran is currently the vice-president, corporate services at Tata Steel. He had worked at Tata International from 2001 till 2005, after earning his B. Tech degree from IIT Delhi in 1985 and a post-graduate diploma in management from IIM Calcutta in 1987. He had joined Tata Steel as a management trainee in 1987.

The Telegraph

In August last year, Tata Sons had announced the appointment of Agrawala as president — infrastructure, defence and aerospace. Agrawala was earlier the president & CEO of GE South Asia.

The likely changes in the AirAsia India board come at a time the domestic aviation sector is undergoing challenges in terms of rising oil prices and tough competition which have prevented them from fully passing on the rise in input cost, thus hitting the bottomlines hard.

AirAsia India has also been in the news after the Central Bureau of Investigation (CBI) filed an FIR where it alleged the airline, its officials as well as AirAsia Berhad had tried to manipulate government policies through corrupt means to obtain a licence to start international operations.

The agency had also alleged that AirAsia India was indirectly controlled and operated by AirAsia Berhad through a brand licensing agreement between the parties thus violating the Foreign Investment Promotion Board rules that require substantial ownership and effective control to remain in the hands of Indian nationals.

However, both AirAsia India and AirAsia Group Berhad have refuted the CBI’s allegations. In a statement issued in late May, AirAsia India said it would be “incongruous” to allege that the control of the airline was not in accordance with foreign exchange investment laws.

Jet fuel

The government on Wednesday cut the excise duty on jet fuel or ATF to 11 per cent from current 14 per cent in a bid to give relief to the aviation industry that has been hit hard by high fuel prices.