Low fare airline AirAsia India’s CEO has resigned

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An AirAsia baggage handler drops a bag on the tarmac at Kuala Lumpur International Airport in Sepang, Malaysia, June 17, 2015. REUTERS/Olivia Harris

Low fare airline AirAsia India’s managing director and chief executive officer Mittu Chandilya has resigned and a new executive from the parent airline is likely to take over in next two to three months, according to two persons close to the development.

“Chandilya has submitted his resignation,” one of the persons quoted above said. Asked whether the airline has accepted the resignation, the person said he is unable to confirm the same at this point of time.

AirAsia India is a joint venture in which AirAsia Bhd holds 49%, Tata Sons Ltd 41% and Arun Bhatia of Telestra Tradeplace Pvt. Ltd the rest.

An AirAsia India spokesperson declined to comment.

Tony Fernandes, parent AirAsia Bhd’s CEO and founder, had announced Chandilya’s appointment via Twitter in May 2013. Both Fernandes and Chandilya declined to comment.

The second person quoted above said Chandilya was deeply frustrated with the micromanagement by the Malayasian parent in the Indian unit, which is facing cutthroat competition from low fare and full service airlines. He said the Malaysian parent was keen to replicate the success of other nations and was expecting too much from the Indian operations as the parent had already extended systems and planes. However, the operational freedom was limited for the Indian team, he added.

Chandilya, 35, joined AirAsia India on 1 June 2015. He moved to AirAsia India after heading the Asia-Pacific services practice at recruitment company Egon Zehnder International. Chandilya was native of Chennai and was modelling before taking on a corporate career. He grew up in India, Africa and the US, and holds degrees in business and economics from Lehigh University, besides an MBA from INSEAD.

In August 2015, Chandilya was given additional charge of managing director (MD) and full-time independent executive director in addition to his role as chief executive officer.

The appointment of a person with non-aviation background had surprised many then as the Indian civil aviation is highly regulated. Chandilya had never worked in India, and had no prior experience at an airline.

Losses at AirAsia India widened to Rs61.15 crore in the September quarter from Rs44.15 crore in the preceding three months due to competition and discounts, the local unit of Malaysian fare warrior AirAsia Bhd said in November.

AirAsia India started operations on 12 June 2014 with a single Airbus A320 aircraft. In just about a year, the airline has grown to a fleet of five, flying to 10 destinations in India. It has now carried more than a million passengers. AirAsia India is yet to make profits. In October, Chandilya told Tata Review, the Tata group’s internal publication, that AirAsia India needs to have eight aircraft to be profitable.

AirAsia India has about 2% market share. Consultancy firm Capa India in January had estimated that the promoters of AirAsia India may take more serious long term bets without elaborating.

In September 2013, after a board meeting of AirAsia India, Fernandes tweeted that he was confident the airline “will make profit from the first year and change aviation”.

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This story was first published on Livemint.com