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Tatas may look within for flying Air India after IIker Ayci declines offer

With IIker Ayci backing out, the Tatas will now have to run the process once again to select a CEO for the airlines. The group had found itself in a similar situation with Tata Motors earlier. A management expert from within, who knows the working and ethos of the group better than an external leader, won’t be a bad idea. 

March 01, 2022 / 03:05 PM IST

Ilker Ayci was always the surprise choice to pilot Air India. A man with varied experience, with just one stint in aviation and with a controversial background, it is unclear if the Tatas had invested enough to check the background and potential challenges in getting his name cleared by the home ministry.

With Ayci backing out, Tatas will now have to run the process once again. This is not the first time the Tata group is facing this snub. Tata Motors had faced a similar situation when Marc Llistosella decided to not join, citing personal reasons. The company had informed the stock market about the change in the corner office.

A Chief Executive Officer (CEO) is a mandatory and accountable position in an airline and Air India is without one since it changed hands to the Tatas in January this year.

The decision by Ayci not only puts a question mark over the entire selection process of the group, but the group will also find it hard to attract another leader.

What could have been a fairy tale March for the group to buy out the remaining stake in AirAsia India and start the merger process under the new CEO will now have to wait. While Ayci has claimed the ‘media campaign’ against him for the decision, his name had reached midway through the security clearance process of the ministry of home affairs.

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Without a CEO

While airlines in India have had CEOs, they have also had times when they were led by promoters doubling up as part-time CEOs till a new appointment was made.

More often than not, this has been a common occurrence at Go First -- known for many exits at the top. However, Air India is a different ball game. The earlier structure saw appointments being made from the IAS cadre, unlike private entities.

Air India would need a CEO to move from collective management to a goal-driven focus towards improvement. The Tatas would have definitely decided to rely on the experience of Ayci in dealing with OEMs and MROs to strike better long-term deals and reduce costs.

A CEO is more than just a designation. He is the manager accountable and represents the airline in the advisory council set up by the minister of civil aviation.

Will the group go back to other shortlisted candidates? Rumour mills have churned out names in the past. Alex Cruz, the former boss at British Airways, had already denied he is in the reckoning, while Fred Reid, another name which was being talked about, had not stated anything about his candidature.

A CEO from within?

When the Tata group decided to appoint its own team at the helm of AirAsia India, after two appointees from AirAsia Bhd, it chose Sunil Bhaskaran, an old Tata hand who had been with the group for two decades, none of which were in the airline business.

Ayci, for example, was a newbie to aviation when he took the mantle of Turkish Airlines. With two rumours and a false start, will the Tata group rely on an insider to drive the challenge, and look for other positions to be filled up by expats?

This could well be the way out: appointing multiple other CXOs, with an aviation background, to report to a CEO, who is a management expert from the group and knows the working and ethos of the group better than an external leader.

After the turbulent years as Tata group chairman, when Cyrus Mystry was moved out, the group relied upon N Chandrashekhar to move up from bellwether TCS to group chairman.

What next?

The rebuttal of the offer and the reasons behind it does not gel well for the Tata group, one of the oldest industrial houses of the country. The group may not come up with a statement but instead look for an early appointment of a leadership team which can get to work, than be stuck in news reports or approvals.
Ameya Joshi runs the aviation analysis website Network Thoughts.
first published: Mar 1, 2022 03:04 pm
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