New CEO to take control of scandal-ridden Air Asia India
After corruption scandals and several months without a CEO, Air Asia India has a new head. Sunil Bhaskaran, currently corporate affairs VP at Tata Steel, is appointed as the airline’s CEO and managing director effective November 15, 2018.
Bhaskaran’s appointment is seen as a signal that Tata is aiming to take greater control of the airline. Established in 2013, Air Asia India is a joint venture between Air Asia Berhad (Malaysia) and Tata Sons (India).
Bhaskaran is the third CEO of Air Asia India. He is replacing Amar Abrol, who stepped down and moved to the AirAsia Group headquarters in Malaysia reportedly “to be closer to his family”, in June 2018. The CEO before that – Mittu Chandilya – left the airline in February 2016. The exit was marked by money “siphoning” allegations and reputation damage claims.
In his new role, Bhaskaran will be tasked to "oversee the next phase of expansion and growth of the company", according to the airline’s statement. But besides expansion and bright future prospers, Bhaskaran might also have to deal with a darker legacy.
In May 2018, India’s Central Bureau of Investigation (CBI) announced it had filled a case against the airline’s parent company AirAsia Group Berhad, its CEO Tony Fernandes and none other than AirAsia India itself. CBI accused them of corruption and unlawful obtaining of a flying license.
In particular, the investigators claimed that the company violated India’s Foreign Investment Promotion Board norms that allowed foreign airlines to control up to 49% of India’s carriers, but with a condition that substantial ownership and effective control remains with Indian nationals. Allegedly, Air Asia India was indirectly operated and controlled by AirAsia Berhad via the Brand Licensing Agreement (BLA).
Other allegations were those of bribing India’s government officials to relax the country’s 5/20 rule so that Air Asia India could start flying international routes. The 5/20 rule meant that, among other criteria, an airline had to serve India’s domestic routes for five years before becoming eligible for international license. It is now replaced by 0/20 rule.
Air Asia India categorically denied the claims or any wrongdoing, claiming that CBI’s investigation is based on information from “unnamed reliable source”. The company’s statement on June 19, 2018, read: “The Board of Directors of AirAsia Group Berhad (AAGB) refutes strongly ALL the allegations made in the FIR [First information report] as baseless, unsupported and unjustified and will vigorously challenge these allegations. We question the motives of the unnamed person, persons or organisation that lodged this FIR but we will co-operate fully with the Indian authorities in accordance with due process provided in law”.
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