Ilker Ayci turns down Tata Group's offer to be new Air India CEO

Plan B: 5-member interim panel to run the airline

Two weeks after he was appointed Air India chief executive officer, Ilker Ayci has declined the offer to join the Tata Group-owned airline. Ayci’s departure, even before taking charge, comes in the backdrop of a controversy around his security clearance prospects.

Ayci, former chairman of Turkish Airlines, had earlier served as advisor to Turkey president Recep Tayyip Erdogan. His closeness to Erdogan drew criticism on social media given the frosty relations between India and Turkey. More recently, Rashtriya Swayam Sevak-backed Swadeshi Jagaran Manch opposed the appointment on grounds of national security.

Ayci, who spearheaded Turkish Airlines to its turnaround and success, blamed the media for viewing his appointment with an undesirable prism. “As a business leader who has always prioritized professional credo and more importantly the happiness and well-being of my family above all else, I have come to the conclusion that it would not be a feasible or honourable decision to accept the position in the shadow of such a narrative,” he said in a statement on Tuesday.

Ayci said he had recently met Tata Sons chairman N Chandrasekaran to convey his decision of not accepting the post. Tatas, which won the bid and acquired Air India in a Rs 18,000-crore deal last year, did not comment.

While Ayci’s exit is being seen as a major hurdle for Tata Group’s effort to revamp Air India operations, this is not the first such departure for the salt-to-software conglomerate. In March 2021, Marc Llistosella, then a top Daimler executive, was named Tata Motors CEO. Llistosella declined to join and Guenter Butschek continued as CEO till June 2021. Since then Tata Motors has been without a CEO.

To the question on Tatas’ plan B for Air India leadership, sources said the airline would be operated by a five-member committee in the interim. Tata Sons has resumed the process of hiring a CEO.  The five member committee is headed by Nipun Aggarwal, senior vice president at Tata Sons.  

While head hunting firm Egon Zehnder had shortlisted other names besides Iyci for Air India CEO, any fresh appointment at that level will  require more than a month, sources said. Incidentally, Llistosella was shortlisted for Tata Motors by the same executive search firm.  

Talking about the interim five-member committee, a source said that the airline under the current set-up has improved its financial performance as well as on timings and passenger focus.

"Wherever required, experts from the group are assisting the interim committee. This is not to say that the company can stay headless but the interim management has been quite adept at running the airline,” a person familiar with the operation said. The daily loss at the airline has been reduced primarily due to financial restructuring prior to disinvestment. Around Rs 46,000 of debt of the company was taken over by the government before handing over the national carrier to the Tata group.

Sources said that Suresh Tripathi, former vice president of human resources at Tata Steel HR, is involved with Air India’s restructuring process while a team from Tata Consultancy Services is working to integrate the airline’s software with the One Tata Operating Network (OTON). A second team with people from Taj Hospitality group and led by Sandeep Verma--who earlier headed in-flight services for Vistara--is looking at improving the airline’s soft image.

The DGCA rules make it compulsory for the airline to designate an accountable manager who’s responsible for airline's operations. In most cases, the CEO of an airline is designated as accountable manager.

Besides appointment of a new CEO and planning an Air India board, Tata Sons is also working on restructuring and merger of the operations of its low- cost airline AirAsia India and Air India Express- a subsidiary of Air India.  Sources said that the group’s partnership with Malaysian airline AirAsia Bhd would  be over by the end of March .

An executive of a head hunting firm with experience in aviation termed Ayci’s exit as unfortunate adding that it will reduce India’s attractiveness as a work place for foreign executives. “As it is, it is not easy to convince accomplished foreign executives to come and work in India. Such incidents where a large group like Tata Sons has to bow down to public pressure for appointments will hit the sentiments further,” he said.

According to the ministry of home affairs guidelines, an airline’s board of directors requires a security clearance. Security clearance is also required in case the post of CEO, CFO and COO is filled with a foreign citizen.