Five months after the position fell vacant, AirAsia India is appointing Sunil Bhaskaran its next chief executive officer (CEO). Bhaskaran, a lifelong employee of the Tata group, is currently working as vice-president (corporate affairs) at Tata Steel.
The airline is also restructuring its board, with AirAsia group CEO Tony Fernandes and deputy group CEO Bo Lingam stepping down. It is learnt that the airline will get Banmali Agrawala, who heads Tata group’s defence and aerospace business, as chairman, replacing S Ramadorai.
In a late night statement, the airline announced the CEO appointment but did not respond to queries on the resignation of Fernandes and Bo Lingam from the board of directors.
Sources have said the restructuring implies the Tatas will manage the AirAsia India operations. This is for the first time that the airline’s top appointments are being done without consulting Fernandes. Tata Sons and Tony Fernandes-owned AirAsia Bhd hold a 49 per cent stake each in the airline, while the remaining 2 per cent is held by Tata veterans S Ramadorai and R Venkataramanan.
Referring to the restructuring as a “clean-up act”, a source said the move would be followed by Tata Sons increasing its shareholding to 51 per cent by buying out Ramadorai and Venkat’s stake.
The Central Bureau of Investigation (CBI) had in May named Fernandes, Bo Lingam, and Venkataramanan, managing trustee at Tata Trusts and director at AirAsia, in an FIR, alleging they paid money to middlemen for bribes to public servants for securing an air operator’s permit. While AirAsia India was under the scanner, there’s been a delay in the Tata group's other airline venture, Vistara, getting the government nod for international flights. Officials denied any link between the two developments.
"Bhaskaran is clearly not Fernandes’ choice. The new CEO will be asked to set up a team and steady the ship,” said a person aware of the development.
Despite Tata Sons having the right to appoint CEO, the choice has so far been made by Fernandes. Both former CEOs Mittu Chandilya and Amar Abrol had no experience to run airlines.
Last year, Deepak Mahendra, a former executive of Tata Power, was appointed chief financial officer at AirAsia India. The company currently doesn’t have a COO.
Fernandes is believed to have stepped down from the AirAsia India board on August 2, three days after the FIR linked to the airline’s Indian business was filed. Bo Lingam resigned on September 4. An AirAsia India spokesperson didn’t respond to queries.
In the past, there have been differences among the AirAsia India board members over the choice of senior-level executives, a former official said. An exchange of emails reviewed by Business Standard shows that in 2015, Bharat Vasani, then chief legal counsel of Tata Sons, had raised objections about the selection of at least two senior executives. The objection was on grounds that executives were being hired without sufficient corporate experience.
Since its inception in June 2014, AirAsia India has seen frequent top-level churn, including the exit of two chief executive officers and three chief commercial officers.