Aditya Ghosh has stepped down as the president and whole time director of InterGlobe Aviation Ltd., the operator of India’s largest airline IndiGo.
The board of directors accepted Ghosh’s resignation in its meeting today, IndiGo said in a stock exchange filing. He will step down as president from July 31 and as director with effect from April 26, the filing added.
The board appointed Director Rahul Bhatia, also co-founder of the airline company, as the interim chief executive officer. He will also continue as whole time director.
Gregory Taylor has been appointed senior adviser and will report to Bhatia. Taylor is also being considered for the top job, according to the company statement.
In the coming months, the Board will consider the appointment of Greg as President and CEO of the Company, subject to receiving the necessary regulatory approvals and paperwork. - IndiGo Statement
Taylor was the executive vice president of revenue management and network planning at IndiGo in 2016 and 2017. Prior to that he’s worked at United Airlines and U.S. Airways.
The company statement quotes Bhatia as saying “We are delighted at Greg’s decision to rejoin the IndiGo team and welcome him back to the company. His enormous and varied experience and understanding of the complexities of the airline industry will be invaluable to our future plans. At the same time, we thank Aditya for all his hard work and contributions and for the successes that the company has enjoyed.”
The Stock Impact
The company’s share price declined by over 6 percent today, ahead of the company’s disclosure of Ghosh’s exit.
Ghosh’s exit will definitely have a negative impact on the performance and on the stock price, said Mayur Milak, aviation analyst at IndiaNivesh Securities to BloombergQuint.
At a time when the company has decided to change strategy from single fleet to multi-fleet, from having operational leases to owning some assets, a guy as critical as Aditya Ghosh would have really played a key role.Mayur Milak, Research Analyst, IndiaNivesh Securities
Milak also expressed concern about the pressure from rising crude prices. “It is going to be a big challenge and for the time being it is a big negative on the stock price,” he added.
Sustainability of IndiGo’s low cost operational model for a long period was always in question, said Deven Choksey, equities investor and managing director of KR Choksey Shares & Securities. He expects volume-led growth will be the airline’s next strategy and that a change in guard is an obvious outcome of that.
The Ghosh Decade
Ghosh was appointed president of the company in August 2008, about two years after the airline was launched. Prior to that he served as general counsel for InterGlobe Enterprises from 2004 onwards. A lawyer by education, Ghosh is credited with having steered IndiGo to market leadership. From a market share of 10 percent around the time he took over, IndiGo is now India’s largest airline with 39.5 percent of the market, according to company data.
“For the last ten years, it has been a relentless, exhilarating and a most satisfying task building IndiGo,” Ghosh is quoted as saying in the company statement.
It is now time for me to step off the treadmill and sometime in the near future embark on my next adventure. - Aditya Ghosh, IndiGo Statement
But the airline has run into rough weather recently. It lost more than $600 million in market value this month after it grounded 11 aircraft last month, complying with a directive from the aviation regulator in a move that led to the cancellation of hundreds of flights. The directive came after faulty engines of its Airbus SE A320neo aircraft, developed by Pratt & Whitney, led to in-service shutdowns.
Earlier this month IndiGo announced that it was no longer interested in participating in the divestment of the state-owned Air India as the plan proposed by the government was not suitable to it.