Tata Sons chairman Chandrasekaran takes pilot seat till Air India gets CEO

Tatas took charge of Air India on January 27. Since then, the airline has been without a designated chief

Topics


Tata Sons | N Chandrasekaran | Air India

As Tata Sons chairman, N Chandrasekaran chairs the board of several group companies. But his appointment as Air India chairman, which was made public on Monday, is somewhat different. As chairman, he will steer the operation of the recently acquired airline until a chief executive is found, according to people in the know.

In a rare development, Chandra, as he’s popularly known, is likely to be named ‘accountable manager’ of Air India. Accountable manager has corporate authority for ensuring that all tasks of the airline are financed and carried out to the standard required by the stipulated law. Typically, an airline CEO is assigned that role. In that sense, Chandra would be the hands-on interim head of the airline till a suitable CEO is hired, sources said.

This follows a failed attempt by the Tata Group last month to appoint a CEO of Air India—within a fortnight of the announcement that former Turkish airline chief Ilker Ayci would head the airline, he declined the offer in the midst of a row over his links to Turkish president Recep Tayyip Erdogan.

Sources said that the government and aviation regulator DGCA had asked the new owners of Air India to appoint a position holder as accountable manager. The airline is currently being operated by a five-member committee.

It includes Nippun Aggarwal, a senior vice president of Tata Sons and four functional directors of the company.

“Both the government and the regulator wanted a senior level executive like a CEO or Chief Operating Officer (COO) to become accountable manager of the company,’’ said a person aware of the development. With Chandra being at the helm, the group would be able to send a message of confidence to the employees of Air India as well, he pointed out.

A Tata Sons spokesperson confirmed the appointment of Chandrasekaran as chairman of Air India. This will be the first time that Chandrasekaran will be heading a board of the group’s aviation ventures, in a sign of the growing importance of the sector for Tatas. Chandrasekaran is not part of the board of Tata’s other two airlines- Vistara and AirAsia India.

chart

Sanjiv Mehta, CMD of FMCG giant Hindustan Unilver and Alice Vaidyan, former chairman and managing director of General Insurance Corporation of India, have been appointed non-executive independent directors.

Tatas took charge of Air India on January 27. Since then, the airline has been without a designated chief. Ayci turned down the CEO offer after accepting it, citing adverse public reaction. That was seen as a setback for the salt-to-software conglomerate Tata Sons’ effort to revamp the loss- making carrier’s operation. While the group has started the process to find a new CEO, it may take time. Likely to be an expat, the new CEO would require long-winding security clearances.

While the operations of the company has improved, it is necessary for the airline to have a boss with powers of taking financial decisions, according to the source. Revamping Air India’s organizational structure is among the top priorities of the Tata group but the airline hasn’t started the process yet.

Acording to industry sources, even lenders and the company’s debenture holders expressed worry about the lack of leadership at Air India. There is an urgency to look at human resources by imbibing a culture of a private corporation where there is an incentive to perform better.

“Air India currently doesn’t have the required technology or employee training to do route analysis, pricing and booking curves. Currently it’s a very manual process at Air India which impacts commercial performance as airline pricing is dynamic in nature. They will have to augment the team and software in that area,” the person quoted above said.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.


We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor