Etihad gaining operational control of Jet, mgmt rejig soon
Etihad Airways is gaining greater operational control of Naresh Goyal-promoted Jet Airways in which it acquired a 24% stake for `2,058 crore in November 2013.business Updated: Jan 20, 2014 23:36 IST
Etihad Airways is gaining greater operational control of Naresh Goyal-promoted Jet Airways in which it acquired a 24% stake for `2,058 crore in November 2013.
Etihad nominees are increasingly expected to call the shots in the Indian company, which is the largest listed airline in the country.
On January 16, new CEO Gary Kenneth Toomey, who had been appointed in mid-June last year, quit. Air Seychelles chief executive Cramer Ball is likely to replace him. Etihad has equity investments in Air Seychelles.
Senior sources in Jet said Willy Boulter, vice-president, commercial strategy and planning, Etihad, is expected to be appointed Jet’s chief commercial officer (CCO). Rangesh Embar, vice-president, finance, Rajeev Nambiar, head of sales, and Renyl Rauf, senior manager, mergers and acquisitions at Etihad, are some other Etihad nominees expected to take up senior positions at Jet.
Since the April announcement of the deal, many top Jet veterans have quit. They include long-time CEO Nikos Kardassis, CCO Sudheer Raghavan and vice president KG Vishwanath, leading many to believe that power equations at the airline may be changing.
“Jet is now more about Etihad and that is a reality,” said Kapil Kaul, South Asia CEO of aviation consultancy firm Centre for Asia Pacific Aviation. “The (Jet) management will be led by Etihad and we expect top-level inductions soon by Etihad, which will lead to a total management revamp,” Kaul said. Jet did not reply to an email sent by HT.
In June last year, the Foreign Investment Promotion Board (FIPB) had deferred a decision on clearing the Jet-Etihad deal, the largest foreign direct investment in aviation, on grounds that it granted the latter disproportionately large control on the basis of a relatively small 24% stake. Goyal holds a 51% stake in the airline.
The agreement was then reworked to ensure that effective control remained in Indian hands. The new deal also stipulated that Jet’s commercial office, network and revenue management and substantive place of business remained in Mumbai and was not relocated to Abu Dhabi.
Etihad’s president and CEO James Hogan and James Rigney, executive vice-president, finance, have been appointed as additional directors on the airline’s board.
“Jet is critically placed and it requires proven leadership to manage the challenges. I hope the management’s focus remain on Jet’s turnaround not on building transfer traffic,” said Kaul.
First Published: Jan 20, 2014 23:32 IST