IndiGo chief unexpectedly leaves India's biggest airline

InterGlobe Aviation’s billionaire director Rahul Bhatia has taken over as interim chief executive of IndiGo after its president and director Aditya Ghosh unexpectedly resigned before a board meeting Friday, the operator of India’s biggest airline said in an exchange filing.

“Ghosh has been instrumental in bringing IndiGo to the top position in Indian aviation over the past 10 years,” said Mark Martin, founder and chief executive of Dubai-based Martin Consulting.

“Indigo shares may have a temporary blip as they are overvalued. We don’t expect a major sell-off as Indigo still has good leadership and are strongly entrenched in the aviation business.”

Mr Ghosh is leaving at a time when the airline is changing some of its most successful policies such as moving to a mixed fleet instead of operating a single aircraft class, buying planes outright instead of leasing them, and planning a new low cost, long haul service. Mr Ghosh has been IndiGo’s public face over the years as media shy billionaire owners Mr Bhatia and Rakesh Gangwal remained away from the limelight.

Mr Ghosh has quit as director from April 26 and will step down as president from July 31, the airlines said. He led IndiGo for nearly a decade, growing it to be the nation’s biggest airline. Under him, IndiGo placed record aircraft orders worth billions of dollars, had a blockbuster IPO and became the biggest budget airline in Asia by market valuation.

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Last month, IndiGo, the only airline to have publicly shown interest in buying parts of Air India, said it was no longer keen on the state asset, dealing a blow to Prime Minister Narendra Modi’s most high-profile privatisation plan.

The airline said it did not have the wherewithal to acquire Air India in its entirety and make it profitable. While the budget carrier had its eyes set on the international operations of Air India, the government decided against piecemeal sales to different buyers.

“We do not believe that we have the capability to take on the task of acquiring and successfully turning around all of Air India’s airline operations,” MrGhosh said at the time.

IndiGo was counting on Air India’s international operation, which has lucrative landing and parking slots at airports from Heathrow to New York, to expand and become a low-cost, long-haul airline in a relatively shorter time. However, India said last week it will sell a 76 per cent stake in Air India as a whole, and the buyer would have to take on about two-thirds of its $7.8 billion debt.

“IndiGo’s decision is very wise and in the interest of their shareholders,” said Kapil Kaul, the South Asia chief of Capa Centre for Aviation. “Acquiring Air India was a very risky proposition for IndiGo.”

Separately, IndiGo said it would consider appointing Gregory Taylor as president and chief executive. Mr Taylor, who was the executive vice president of revenue management and network planning at IndiGo in 2016-2017, has been made senior adviser, the carrier added.

The company’s spokeswoman and Mr Ghosh didn’t immediately respond to calls seeking comments.