Indian aviation falls short in nurturing local leadership talent

Tiny CEO cabal ride merry-go-round at the top of India’s airlines.

by ANJULI BHARGAVA  

October 1st 2020

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India’s aviation sector has been plagued with an acute management talent shortage from the word go and it is showing no signs improving. Read More »

In early 2018, when the founder of LCC IndiGo, Rahul Bhatia, was scouting for a CEO to succeed Aditya Ghosh, then president and CEO of India’s largest airline by numbers, he was not exactly overwhelmed with candidates. In India, no matter the airline looked at, the CEO either had been imported - Vistara, AirAsia India, GoAir and Jet Airways being cases in point - or was run directly by their promoters/investors. The obvious example of the latter is SpiceJet.

So convincing a qualified potential CEO to relocate to India’s capital city, Delhi, labelled as one of most polluted cities in the world, was not easy. Increasing numbers of expatriates were looking to leave the city, concerned about the impact of air pollution on the health of their children, rather than moving to it.

Therefore, it was not a surprise to IndiGo insiders and the industry in general that Bhatia sought to convince Rono Datta, an Indian by birth, to come on board at the LCC. Datta has had vast management experience at airlines in the U.S. and has a reputation for rescuing carriers from bankruptcy.

Datta’s children were grown and India was a known animal to him. He had spent four years at Sahara Airlines, from 2004-2008, before it was sold to Jet Airways. He had the required expertise even if he was seen more as a full service airline man than one with expertise in low-fare carriers. Only a few may know Datta also had been a choice for Bhatia in 2004. When Datta visited India in 2003, founders of three of the country’s airlines, Naresh Goyal, Subroto Roy and Rahul Bhatia, approached him to join them. He chose Air Sahara.

In late 2018, when the churn within IndiGo began to take its toll on staff, the airline’s then chief commercial officer, Sanjay Kumar, who had more than a decade with the airline, decided to move on. He too had three airlines chasing him. GoAir approached Kumar to join it as did SpiceJet, where he had worked earlier in his career. AirAsia India, a joint venture between Tata Group and the AirAsia Group, was Kumar’s choice, no doubt influenced by Tata’s controlling interest in the LCC.

He came on board at AirAsia India as chief operating officer in November 2018 at almost the same time the airline named Sunil Bhaskaran as CEO. Kumar, who had better knowledge of the sector than his boss, did not last long for a variety of reasons and returned to IndiGo as chief of strategy and revenue.

Shakti Lumba, now 71, and an industry veteran respected for flight operations and management expertise, had been targeted by AirAsia India in its start-up days in 2013-2014. Lumba even made a trip to Kuala Lumpur, but declined an offer from the Malaysian LCC. More recently, despite being past retirement age, IndiGo has brought him back to head its ATR and UDAN operations, an appointment jeopardised by India’s Ministry of Civil Aviation’s (MOCA interference. Lumba had a long career at Indian Airlines then set up flight operations for IndiGo and was a member of the LCC’s start-up team.

More recently, when Jet Airways pulled downed its shutters in 2019, the airline’s CEO, Vinay Dube, was approached by at least two airlines - SpiceJet and GoAir - to run the carriers. Dube, new to India, had built a name for himself in his short stint with Jet. Many of his colleagues acknowledged his thorough understanding of the airline business. However, unable to move cities for personal reasons, Dube chose GoAir over SpiceJet despite the former’s not so happy reputation in handling employees. Dube left GoAir in August.

While the above instances highlight the acute shortage of talent the sector faces at top management level, the sector also has suffered and continues to suffer from an acute lack of management talent, or as some industry professionals say a “love and obsession for all things foreign”. While technical expertise – pilots, engineers and technicians – is in plentiful supply in India, it is the management cadre where many feel there is a vacuum.

A former aviation secretary has said India could do with “one less airline and one more airline management school” to help the sector develop and prevent the endless cycle of airlines going bankrupt in India. Although people tend to think only of Kingfisher Airlines and now Jet Airways [as failed], the country’s aviation history, he pointed out, is populated with failures almost from the word go.

THE PUBLIC SECTOR LEGACY

One of the reasons the industry has been short of talent is India’s aviation sector has been vested entirely in the public sector. Chairman and managing directors (CMD) of Air India and Indian Airlines typically have been government officials and have tenure at best of five years at their appointed airlines.

“Before the person heading the airline could acquire expertise in running it, the incumbent would change,” said a former CMD, who grappled with this and attempted to convince the authorities to extend tenures. This, in his view, is one of the reasons for the inconsistent performance of government-owned airlines. Even when talented, not everyone is willing to leave a “safe, public sector, government paid job” with several perks to join private carriers that are perceived as far rockier boats and subject to the whims of their founders.

As late as 1994, the government allowed private airlines to operate as scheduled airlines. In 1993, Damania Airways started operations as an air taxi business. But many of the early players operated as “one man shows” with very little organisational structure. It was only when Jet Airways was set up in the mid-1990s that some talent began to develop in the sector outside of Air India and Indian Airlines.

The three airlines have provided the industry with many of its skilled veterans. But whenever Indian investors have started airlines, they have looked outside the country for talent. More recently, some talented leaders have developed at IndiGo. But it suffers too because most of the newbies use the airline to poach staff for their own teams.

A LOVE OF ALL THINGS FOREIGN

Not everyone agrees local airline talent is in short supply. They argue instead that Indian airline founders have been obsessed by the white man, a legacy of India’s colonial past. “The assumption is someone who comes from overseas with some global experience necessarily knows better”, said a senior captain with IndiGo, who also has worked for Jet and Sahara. Jet Airways founder, Naresh Goyal, largely left the reins of power in foreign hands, primarily Nikos Kardassis and Wolfgang Prock-Schaeur, who both had long stints as CEOs. Goyal turned to Kardassis in all crises, most recently pulling him in when Tata Group was in discussions to buy Jet, a deal that failed to happen.

No matter the airline in India, its owners and investors have hired foreigners to run them throughout India’s aviation history. India’s first LCC, Air Deccan, brought in Warwick Brady to run its operations in Bengaluru. Similarly, when Vijay Mallya decided to take the plunge with Kingfisher Airlines, he appointed Alex Wilcox, a low-fare airline expert, to launch the airline. Wilcox left Kingfisher within weeks when he realised Mallya was not interested in setting up a low-fare product. At that stage, Mallya hired Sanjay Agarwal, who had done a stint with US Airways and had been CEO of SpiceJet until the Marans bought the company. Eventually, Mallya was forced to take matters into his own hands. He ran the ship aground himself.

Mumbai-headquartered GoAir has only had expat CEOs – the latest in a long line was Cornelis Vreeswijk. In 2019, after Jet Airways was grounded, Vinay Dube moved to the top job at GoAir, but its owner, Jeh Wadia, has replaced him with Kaushik Khona. The airline is struggling to retain key staff and has had more than 13 human resource directors in as many years.

“The inability of the airline’s promoters to work consistently with senior professionals has been seen time and again”, said a former CEO of the carrier. Most aviation industry personnel who have worked at GoAir have said its owners do not trust their own teams. GoAir is seen as a stop gap arrangement by many aviation personnel, especially those who cannot leave Mumbai due to personal reasons.

But even at airlines like IndiGo, the start-up’s CEO was Bruce Ashby, brought in by Rakesh Gangwal. Several senior appointees have been selected by Gangwal, albeit from a distance. Gangwal, who owns approximately 37% of IndiGo but lives in Miami in the U.S., was a former CEO and chairman of US Airways. This arrangement has led to considerable discontent within the airline and among its Indian employees who often feel they have to report to “retired expats way past their shelf lives and who have little understanding of the Indian situation and reality”.

Many senior employees have taken exception to the fact that as the airline grew more expats were brought in to supposedly manage affairs but in fact they ended up making a “hash” of things. The subsequent departure of many of the expats confirms their opinions. But even as the industry grapples with its biggest crisis in COVID-19 the lack of talent in aviation in India remains a worry for the industry. It is a “chicken and egg” predicament. Talent at the top is missing because promoters don’t want to hand over control to fellow Indians. But unless the Indians find themselves in positions of authority or leadership, they cannot develop. It remains to be seen who will blink first.