Talent within? CEO choice puts spotlight on Indian airlines' HR policies

Foreigners being selected to lead Indian carriers speaks about the companies' succession planning, say experts.

More than 72 per cent of global airline chief executive officers (CEO) are insiders: individuals promoted from within the company, said a study by researchers of Griffith University of Australia in 2019. In that respect, Indian carriers are different.

In quick succession, Air India and IndiGo announced the selection of Campbell Wilson and Pieter Elbers as CEOs. Wilson and Elbers, who come from Scoot and KLM, are seasoned aviation professionals with experience in different departments and geographies. Their experience would also be crucial for Air India and IndiGo as they map strategies to expand globally and increase partnerships. But their hiring once again put the spotlight on insufficient talent grooming and succession planning in Indian carriers, say experts.

Air India and IndiGo did not respond to an email query on the issue.

“In a hyper competitive market like India, airlines need to excel in business efficiency and customer service delivery. Often promoters think that an expatriate CEO can address these challenges especially if the airline is struggling. This way it can outsmart the competition too. Over the years, Indian airlines have been going through cycles of boom and bust and have never really focused on building and nurturing a great leadership,” said Surajit Banerjee, chief people officer of flybig Airlines, a regional carrier based in Indore.

Aviation consultancy CAPA in its December 2020 report on people strategy said that the induction of expatriate CEOs or CXOs by Indian airlines is often seen as an answer to shortage of expertise.

“There is limited attempt (by Indian airlines) to institutionalise the expertise that resides in experienced individuals. When they leave, knowledge leaves with them. Succession planning and grooming of talent is insufficient at all levels. More worrying is that promoters often think that as long as the top 10-15 senior executives are capable and committed, weakness in the rest of the organization can be managed,” CAPA said.

In a way hiring of expat CEOs is not unique. But promotion of an in-house executive to a full time CEO role in private Indian airlines is rare. Air India was helmed by chairmen who rose from the ranks within the airline though in the recent years all its heads were Indian Administrative Service (IAS) officials nominated by the government.

IndiGo’s first CEO, Bruce Ashby, was a former executive vice president of US Airways. Aditya Ghosh, a lawyer who was general counsel in the airline, succeeded Ashby as the president in 2008. Uttam Kumar Bose and Alok Sharma, who headed Air Sahara as CEO, earlier served within the airline in other roles.

Among the current CEOs, Kaushik Khona of Go First and Sunil Bhaskaran of AirAsia India have worked with the Wadia and Tata group respectively before taking up the current role. Vinod Kannan of Vistara is on deputation from Singapore Airlines where he earlier served in various senior roles.

Russel Wilson and professor Gui Lohmann, of the aviation department of Griffith University, said in their 2019 research paper  that airlines demonstrate either outstanding succession planning practices or merely a reluctance to hire from outside with 72 per cent of airline CEOs being insiders (individuals promoted within the airline). The study was based on top 93 global airlines of 2016. It also found only 19 of the 93 airlines selected a “non-native leader” or a foreigner as a CEO.

“A CEO’s role is to build strategy and vision for the company and execute it. The person should be well versed with numbers. In India we have many domain experts but few with all round expertise that is required to lead an airline,” said aviation expert Vishok Mansigh.

A former airline CEO has a different take. “Excluding Air India, the airline industry in India is just two and half decade old. Thus unlike Europe and the US we don’t have a limited pool of senior aviation professionals.”

According to Manish Raniga, CEO of Value Alliance (a group of low-cost airlines), Indian airlines have more room for improvement in succession planning. “Talent in Indian aviation is abundant but the system lacks adequate programmes and processes to provide fast track opportunities for high performers,” he said.