AirAsia India’s hat-trick of industry outsider CEOs

AirAsia India has a hard journey right from the start. The Tata group, in both cases, whether Vistara or AirAsia India, wanted to form a core team which would guide the airline to the top in their respective segments. While it seems to be a happy marriage with Singapore Airlines, it looks like a bitter one with AirAsia. AirAsia India was without a CEO for five months until last week.

Now, Sunil Bhaskaran has been appointed as the new AirAsia India CEO. Sunil Bhaskaran was earlier the Vice President of Corporate Services at Tata Steel. AirAsia India has had a hat-trick of CEOs with no experience of running an airline. It was Mittu Chandilya in the beginning, then Amar Abrol and now Sunil Bhaskaran.

There have been cases when it has turned out to be the best. Take, for example, Aditya Ghosh. He may have been new to the aviation industry earlier, but he was there with IndiGo from the start and look at IndiGo when he left. He was a people’s person and was extremely close with all his co-workers. Same is the case with Sunil Bhaskaran. One thing I know for sure, lifelong Tata employees is the best a company can have. Sunil Bhaskaran isn’t any different.

AirAsia India J.R.D. Tata livery

With this appointment, Tatas are now on the front foot. AirAsia India was a neglected bit right from the start for the Tatas, given they trusted AirAsia to run the airline well. There have been talks about Tata increasing their stake to 51% from the current 49%. Also, there are talks about a new chairman and changes in the management team. Let’s see what happens.

There are a lot of questions though about the future of AirAsia India. Will the new management push for improvement in passenger experience onboard AirAsia India? Will, they negotiate better lease agreements with AirAsia or resort to an aircraft order with Airbus? Will they tie-up with banks for added incentives like other no-frills carriers in India frequently do to compete against FSCs? How will they compete with the onslaught from IndiGo which has been explicitly targeting AirAsia India apart from others?

It’s a tough road ahead, mainly because AirAsia is a franchise. It is entirely different from how Vistara operates.  Aircraft have to leased through AirAsia only. But since AirAsia sold off their leasing arm earlier this year, there can be a leeway. They cannot make any changes to the hard product as it has to be standard across the AirAsia group. This enables aircraft to be transferred across the group entities easily. A switch can be possible if you order directly from Airbus, lease from another firm and not from the pool.

If AirAsia India wants to compete with IndiGo, they must start thinking of differentiating factors. SpiceJet got it right with their new Boeing 737 Max aircraft. AirAsia has an advantage due to their extensive far-east network. All they need is to work with their partner, Tata and get their Indian operations straight.

Bottomline

AirAsia India has a long way to go. It needs to get the management right, focus on improving operating costs through better contract negotiations and so on. AirAsia Berhad needs to get one thing straight: Indian Market is different from their home market.

Will Sunil Bhaskaran be able to steer AirAsia India out of stormy skies? We are waiting to see. 

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