It has been a harrowing few months for IndiGo, India’s largest airline by passenger numbers. When news of President and Wholetime Director Aditya Ghosh quitting surfaced last weekend, few were surprised though. Industry watchers have been warning of turbulence at IndiGo for months now as it seeks to change the fundamentals of its operations and eyes unprecedented expansion.
Should Ghosh have quit now, when myriad changes are being made to the very identity of an airline that he helped build from scratch? Or was his departure necessary for these changes to take effect? There are widely varied opinions on this question. Whether this senior-level exit will impact investor sentiment will be known only in a while.
On Monday, the first day of trading after news of Ghosh’s imminent departure surfaced, the IndiGo scrip gained in morning trade and finished 0.50 percent lower. Ghosh will depart on 31 July and co-promoter Rahul Bhatia will serve as interim CEO.
Ghosh and his team's achievements over the past decade are many and are commendable: IndiGo has gone from 18 aircraft to over 160; operates more than a 1000 flights a day; has logged an eight-fold increase in topline over a decade; parent InterGlobe Aviation boasts of a market cap of over Rs 53,000 crore with the scrip trading at nearly double its listing price, two-and-a-half years ago.
IndiGo is now the fourth-largest low cost carrier in the world and the biggest, most profitable airline in India, which is the world’s fastest growing aviation market. So why is the top management being shaken-up violently?
Well, over the past few months, murmurs of Ghosh’s exit and the disquiet over induction of expats into senior management roles, both, have grown within sections of the airline. And there have been wholesale changes to some thumb rules that IndiGo had followed all along.
IndiGo first surprised investors by declaring its unsolicited interest in ailing national carrier Air India (AI) last year, when the contours of the AI disinvestment were not even known. That was the first time investors heard of the airline's plans to venture into low cost international operations in medium and long haul markets, and despaired over its plans to achieve that goal by acquiring debt-laden Air India. That one of its promoters, Rakesh Gangwal, had to hold a hasty conference call with analysts to clarify that IndiGo’s interest in AI would be conditional and that it would in no way jeopardise the airline’s financial plans was an indication of a public statement made with perhaps not enough thought.
30/04/18 Sindhu Bhattacharya/First Post
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Should Ghosh have quit now, when myriad changes are being made to the very identity of an airline that he helped build from scratch? Or was his departure necessary for these changes to take effect? There are widely varied opinions on this question. Whether this senior-level exit will impact investor sentiment will be known only in a while.
On Monday, the first day of trading after news of Ghosh’s imminent departure surfaced, the IndiGo scrip gained in morning trade and finished 0.50 percent lower. Ghosh will depart on 31 July and co-promoter Rahul Bhatia will serve as interim CEO.
Ghosh and his team's achievements over the past decade are many and are commendable: IndiGo has gone from 18 aircraft to over 160; operates more than a 1000 flights a day; has logged an eight-fold increase in topline over a decade; parent InterGlobe Aviation boasts of a market cap of over Rs 53,000 crore with the scrip trading at nearly double its listing price, two-and-a-half years ago.
IndiGo is now the fourth-largest low cost carrier in the world and the biggest, most profitable airline in India, which is the world’s fastest growing aviation market. So why is the top management being shaken-up violently?
Well, over the past few months, murmurs of Ghosh’s exit and the disquiet over induction of expats into senior management roles, both, have grown within sections of the airline. And there have been wholesale changes to some thumb rules that IndiGo had followed all along.
IndiGo first surprised investors by declaring its unsolicited interest in ailing national carrier Air India (AI) last year, when the contours of the AI disinvestment were not even known. That was the first time investors heard of the airline's plans to venture into low cost international operations in medium and long haul markets, and despaired over its plans to achieve that goal by acquiring debt-laden Air India. That one of its promoters, Rakesh Gangwal, had to hold a hasty conference call with analysts to clarify that IndiGo’s interest in AI would be conditional and that it would in no way jeopardise the airline’s financial plans was an indication of a public statement made with perhaps not enough thought.
30/04/18 Sindhu Bhattacharya/First Post
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