Comments
Crisis-ridden AirAsia India, a joint venture between Tata Sons and AirAsia Berhad, is returning to normalcy, and is in the hunt for a new CEO and a commercial head even while a senior leadership team has been put in place to run operations.
The airline will cut back on the number of new aircraft it plans to induct into its fleet — from the seven more it said it would add by this year-end down to just two more.
The airline was recently hit by turbulence after a CBI case was filed against one of its board directors and an investor in the company over allegations of having influenced the government to change the norms for flying international routes. Earlier, the airline had filed a case with the police claiming that its former CEO, Mittu Chandilya, had misappropriated funds.
AirAsia India has seen a churn at the top every year; the latest to go was its CEO, Amar Abrol, who has returned to AirAsia Berhad’s headquarters. A spokesperson for AirAsia India said that in spite of key executives quitting, operations had not been impacted. But several questions remain unanswered.
Two years ago, when Chandilya put in his papers, the board prevailed upon him to take back his resignation. He was also made the managing director and inducted into the board. Chandilya had at that time declared that the Indian operations will turn around within six months, but that did not happen.
He had also said that within five years of the airline starting its operations, the Indian subsidiary of Air Asia Berhad will be the largest. Today, however, it is the Chinese subsidiary that leads the pack.
The charges levelled by the airline against Chandilya are serious. He has been accused of misappropriating ₹22.33 crore, according to documents filed with the Police Commissioner in Bengaluru, a copy which BusinessLine has. Chandilya, however, denied all the allegations.
The episode raises questions about the company’s internal governance standards and procedures, which failed to detect any unusual transactions during Chandilya’s tenure. A spokesperson for AirAsia Berhad told BusinessLine: “In 2016, the management came to know about financial irregularities during Chandilya’s tenure through numerous anonymous whistle-blower emails... Air Asia India Ltd initiated a forensic audit, and based on its findings, it filed a criminal claim against Mittu, followed by a civil claim.”
The silver lining for the airline is that it posted a net profit of ₹13.23 crore, with revenues growing 91 per cent to ₹517 crore boosted by other income, which grew three-fold to ₹14.6 crore during the October-December quarter of 2017.
According to the DGCA figures, the airline has 18 A320s as of May this year. It expects to launch its international operations when it inducts its 21st aircraft. The airline’s market share has over the past four years grown to 5.5 per cent, with a passenger load factor at 89.7 per cent as of May.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.