Thursday, May 16, 2019

Report of 'rift' between IndiGo promoters; airline calls it speculation

New Delhi/Mumbai: Even as a report on Wednesday claimed an alleged rift between budget passenger carrier IndiGo's promoters -- Rahul Bhatia and Rakesh Gangwal -- the airline denied any such developments calling it mere speculation.
According to a business television report, differences have surfaced between Bhatia and Gangwal over managerial control of the firm. The report quoted sources as saying that the two partners have approached different law firms.
The differences are reportedly over Rahul Bhatia feeling that Gangwal trying to gain control of the airline by bringing his own team. The Indian Expres newspaper, quoting sources, said the tension between the two promoters began simmering when the airline's former CEO Aditya Ghosh left in the airline in April 2018 and the consequent appointment of expatriates in management positions."A chunk of the expatriate executives at IndiGo, the source said, were handpicked by Gangwal from his former employer — United Airlines," the Indian Express report said.

Differences also cropped with Gangwal supporting growth at breakneck speed and on occasion, Bhatia, opting for a more cautious approach. The two founders are, however, trying to iron out the differences so that the functioning of the airline isn’t impacted.
According to The Economic Times report, the founders believe IndiGo is at an inflection point with both Jet Airways and Air India floundering. The two believe IndiGo can occupy the vacant slots left behind by the two legacy carriers but differ on how to grab this opportunity. While Bhatia reportedly is keen on wide-bodied aircraft to pursue its international dream, Gangwal believes in single aircraft model and code sharing agreements rather than servicing long-haul destinations itself.
The reports of promoter rift at IndiGo comes days after the debacle in Jet Airways, where the partnership between Naresh Goyal and the airline's stakeholder Eithad fell through.
16/05/19 Business Standard
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