The present assignment is probably the toughest one for the 30-year veteran, who completes one year at Jet Airways on August 9
In December 2015, the then Jet Airways CEO Cramer Ball put in his papers. The position remained vacant until August 2017, an unusual occurrence for an airline that was in the middle of turning around its operations. Perhaps, Chairman Naresh Goyal was looking for someone with just the right mix of international exposure and experience in expanding the business by building alliances, expanding the network and keeping costs low.
The search finally ended with Vinay Dube, who was Senior Vice President, Asia Pacific for Delta Air Lines, the second largest American carrier.
Dube came with impeccable credentials. A 30-year industry veteran, the Indian American had turned around Delta’s operations in Asia. Under him, the airline’s Asia Pacific business had expanded over 60 percent by entering new markets and stitching up alliances.
In his earlier roles, Dube was instrumental in Delta’s successful acquisition of Northwest Airlines. He also gained considerable experience in sales and marketing while at Sabre Inc, a leading provider of technology services to the aviation industry.
For the aviation veteran, who calls Mumbai home, the shift back to India seemed like a perfect way to cap a distinguished career.
But even as Dube completes a year at Jet Airways on August 9, the current assignment now looks like one of the toughest ones in his career.
“We want to run a good operation that throws off cash and to have a healthy, sustainable, profitable business,” Dube told Hindu in an interview to mark the airline’s 25th anniversary in May.
But a look at Jet’s financial health underscores how difficult that task is. The company’s fourth-quarter net loss of over Rs 1,000 crore had turned the whole 2018 financial year in the red.
Within a year, the airline’s market share in India has gone down from 15.6 percent to 13.9 percent. Its bills (including wage and fuel costs) are among the highest and Jet lags its peers in on-time performance.
To cap it all, reports emerged that the airline had just enough money to last 60 days, prompting it to cut the pay of its pilots and engineers. While latest reports say the company may finally not resort to the drastic step, worries remain.
To be fair to Dube, much of Jet’s - and every airline’s – fortunes are interlinked with fuels costs. Still, it doesn’t explain why it lags peers in growth in revenues or average ticket rates.
With the company set to announce its quarterly results on August 9, the street will be looking out for more details.
Dube in his interviews has reiterated that an airline can’t hope to survive by neglecting its domestic market, something many would say Jet is guilty of. The CEO now wants to correct it.
Within a month of his joining, Jet announced 56 new weekly flights, and later in March this year, added 30 more with a focus on the North-East sector.
To re-haul the operations, Dube roped in his former colleague at Delta, Piero Ceschia, who now heads the all-important strategy and business transformation team at Jet.
Some of the cost cutting measures, including leasing aircraft, have been implemented. But with fuel costs playing spoilsport the benefit may not be optimal.
Among the biggest priority for Dube would be to handle the induction of 225 Boeing 737 Max aircraft. Eleven of them will be added to the fleet this year. The aircraft, which save costs and allow the airline to add more destinations, will be a crucial part of the turnaround.
"It will either make or break (because it is expensive) the airline," says Mark Martin, Founder and CEO of Martin Consulting LLC, an aviation advisory.
In the international business, tongues have been wagging about a possible exit of Etihad Airways (which holds 24 percent in the Indian company), and chances of Jet deepening its ties with Air France-KLM, which could buy into its partner.
Dube, given his international experience, will be instrumental in making a deal successful.
The Naresh factor
Completing one year, Dube has already been at his job longer than what some of his predecessors could manage. Gary Kenneth Toomey, who joined the airline in 2013, lasted seven months.
Dube is Jet’s third CEO in four years, and that includes nearly two years when the company didn’t have a full time chief executive.
What sets the door at Jet revolving?
Those in the industry point to the man on top, Founder Naresh Goyal.
“Naresh Goyal is a hands-on guy and does his own thing whoever the CEO,” says a senior executive from an airline. “It was only Nikos (Kardassis, the two-time CEO) who has proved otherwise,” adds the executive.
Kardassis second term ended in 2013, but he continues to be associated with the airline. Earlier this year, he was appointed an advisor to the airline.Dube has painted Goyal as an industry icon, and the Chairman too has been effusive in his praise for this chief executive. Their partnership will be crucial for Jet to turn a corner.The Great Diwali Discount!
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