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

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

In a rare development, Chandra, as he is popularly known, is likely to be named Air India’s ‘director in charge’. The accountable director has the authority to ensure that all the duties of the airline are funded and performed to the standards required by stipulated law. Typically, an airline CEO is assigned this role. In this sense, Chandra would be the acting head of the airline until a suitable CEO is hired, sources said.

This follows an unsuccessful attempt by the Tata Group last month to appoint an Air India CEO – within a fortnight of announcing that former Turkish airline chief Ilker Ayci would lead the airline he declined the offer amid a row over his ties to Turkish President Recep Tayyip Erdogan.

Sources said the government and aviation regulator DGCA had asked the new owners of Air India to appoint a post holder as the responsible director. The airline is currently operated by a committee of five members.

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

“The government and the regulator wanted a senior executive like a CEO or chief operating officer (COO) to become a responsible manager of the company,” a person familiar with the development said. With Chandra at the helm, the group would also be able to send a message of confidence to Air India employees, he pointed out.

A Tata Sons spokesperson has confirmed Chandrasekaran’s appointment as chairman of Air India. It will be the first time that Chandrasekaran will lead a board of directors of the group’s aeronautical companies, a sign of the growing importance of the sector for Tatas. Chandrasekaran is not on the board of Tata’s other two airlines, Vistara and AirAsia India.

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

Tatas took over Air India on January 27. Since then, the airline no longer has a designated chief. Ayci turned down the CEO’s offer after accepting it, citing backlash from the public. It was seen as a setback for salt-software conglomerate Tata Sons’ efforts to revamp the loss-making carrier’s operations. While the group has begun the process of finding a new CEO, it may take some time. Likely an expat, the new CEO would need lengthy security clearances.

As the company’s operations have improved, the airline needs a boss with financial decision-making powers, the source said. Overhauling Air India’s organizational structure is among the Tata Group’s top priorities, but the airline has yet to start the process.

According to industry sources, even the company’s lenders and debenture holders have expressed concern over Air India’s lack of leadership. There is an urgent need to look at human resources by imbibing a private corporate culture where there is an incentive to perform better.

“Air India currently does not have the technology or employee training to perform route analyses, fares and booking curves. Currently, this is a very manual process at Air India which impacts business performance as airline pricing is dynamic in nature. They will need to increase the team and software in this area,” the person quoted above said.

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