BackAirAsia India CEO Mittu Chandilya said to have quit
New executive from AirAsia India's parent airline is likely to take over in next two to three months
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Mumbai: Low-fare airline AirAsia India’s managing director and chief executive officer Mittu Chandilya has resigned and a new executive from the parent airline is likely to take over in the next 2-3 months, two persons close to the development said.
“Chandilya has submitted his resignation," one of the two persons quoted above said, adding that he is unable to confirm if the airline has accepted his resignation.
AirAsia India is a joint venture in which AirAsia Bhd holds 49%, Tata Sons Ltd 41% and Arun Bhatia of Telestra Tradeplace Pvt. Ltd the rest.
An AirAsia India spokesperson declined to comment.
AirAsia will hold a board meeting shortly to decide the new CEO, said the person quoted above. “AirAsia is scouting for potential candidates. Though the airline has shortlisted a few names, AirAsia has not yet finalised one," he said, adding that Chandliya will continue in the post for the next 2-3 months before handing over charge to a new CEO.
Tony Fernandes, parent AirAsia Bhd’s CEO and founder, had named Chandilya to head AirAsia India in a Twitter post in May 2013.
Both Fernandes and Chandilya declined to comment.
The second person quoted above said Chandilya was frustrated with the micro-management by Malayasian parent in Indian unit, which is facing cut-throat competition from low fare and full service airlines.
He said the Malaysian parent was keen to replicate the success of other nations and was expecting too much from Indian operations as the parent had already extended systems and planes.
However, operational freedom for the Indian team was limited, he added.
Chandilya, 35, joined AirAsia India on 1 June 2013.
He moved to AirAsia India after heading the Asia-Pacific services practice at recruitment company Egon Zehnder International.
A native of Chennai, Chandliya had a stint in modelling before taking on a corporate career. He grew up in India, Africa and the US, and holds degrees in business and economics from Lehigh University, besides an MBA from INSEAD.
In August 2015, Chandilya has given additional charge of managing director (MD) and the full-time independent executive director of the airline in addition to his role as chief executive officer.
The appointment of a person with non-aviation background had surprised many then, as Indian civil aviation is highly regulated.
Chandilya had never worked in India, and had no prior experience at an airline.
Losses at AirAsia India widened to ₹ 61.15 crore in the September quarter from ₹ 44.15 crore in the preceding three months due to competition and discounts, the local unit of Malaysian fare warrior AirAsia Bhd had said in November last year.
AirAsia India started operations on 12 June 2014 with a single Airbus A320 aircraft. In just about a year, the airline has grown to a fleet of five, flying to 10 destinations in India. It has now carried more than a million passengers.
AirAsia India is yet to make profits. Chandilya told Tata Review in October, Tata group’s internal publication, that AirAsia India needs to have eight aircraft to be profitable.
The airline has about 2% market share.
Consultancy firm Capa India in January had estimated that promoters of AirAsia India may take more serious long-term bets, without elaborating.
In September 2013, after a board meeting of AirAsia India, Fernandes tweeted that he was confident that the airline “will make profit from the first year and change aviation". AirAsia’s business model had worked wonders in several countries.
After a year of AirAsia India launch, low fare airline SpiceJet Ltd emerged from a near-death experience; Vistara, the joint venture between Tata Sons Ltd and Singapore Airlines Ltd, took to the skies, and IndiGo, run by InterGlobe Aviation Ltd, listed its shares on stock exchanges raising over ₹ 3,000 crore.
In fact, India’s top airlines had lobbied heavily arguing that AirAsia should not be allowed to fly in India because the law, in their view, allowed foreign airlines to invest only in existing local airlines.
AirAsia India has followed a clear path to profits in every market it entered by offering deep-discounted fares, and going for aggressive expansion. Founder Fernandes had polished this model in his home market of Malaysia and successfully exported it to the Philippines, Thailand and Indonesia.
But AirAsia’s Indian fare warrior could not add more planes and was not able to start lucrative international flights. Airlines in India are not allowed to fly abroad unless they have flown domestically for five years and have a fleet of 20 aircraft.
On 26 June, Reuters reported, quoting Chandilya, that AirAsia India has halted its expansion plans, awaiting progress on overseas flight rights. The report said AirAsia India will not lease any more planes until the government decides whether to retain or reform the 5/20 rule.
“To his credit, Chandilya had ran a tight ship with lowest cost among domestic airlines. He was close to reach the break-even point. Chandilya ensured quickest turnaround of airplanes and integrity of product and services," said an airline consultant, requesting anonymity.
However, he said Chandilya lost out on revenue and certain routes as smaller AirAsia India was competing with larger rivals.
“Chandilya was fighting the over regulated Indian civil aviation market and interferences from over excited parent airline. Fernandes was more hands on man even though decision making was slow for Indian civil aviation market considering the competition," he added.
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