Explained: Will Ilker Ayci's appointment as Air India CEO take off?

Speculation that frosty relations between an Erdogan-led Turkey and India may interrupt the plan

The appointment of a Turkish national with close past ties to Turkey’s President Recep Tayyip Erdoğan as the chief executive officer of Air India has raised some questions. Last week, salt-to-software conglomerate Tata Group announced that former Turkish Airlines boss Ilker Aycı would take over as Air India CEO by April 1.

Sources said that while no objections have yet been raised by government authorities, the process may take longer than usual owing to Ayci’s closeness to Erdogan. The Turkish president has repeatedly taken an anti-India stance, including supporting Pakistan on the Kashmir policy.

If the position of chairman, managing director, CEO and/or chief financial officer (CFO) is held by a foreign national, then a yearly security vetting is required by the Ministry of Home Affairs (MHA). In case something adverse is found during the security vetting, the home ministry’s direction is binding on the licensee.

Currently, Air India’s operations are being run by a five-member committee, which includes four functional directors and holding company Tata Sons senior vice president Nipun Aggarwal.

Sources said that the Tata group’s hunt for a CEO for Air India was a nearly three-month process led by head hunting firm Egon Zehnder. The firm has a long history of working with the Tata group and was also instrumental in identifying the top executives for Tata Sons and Tata Motors.

The Tatas did not comment on the matter.

Ayci took over as the chairman of Turkish Airlines in 2015. Under his watch the airline has become a mega carrier connecting 328 destinations in 128 countries with a fleet of 373 aircraft. In 2014, it flew to 261 destinations in 108 countries with a fleet of 261 aircraft. The airline’s great move to the new Istanbul airport, wide-body aircraft orders and growth of cargo business also happened during his tenure.

People who have worked with Ayci describe him as a hard task master, one who is known to crack the whip.

“Ilker was dynamic and aggressive in sales and marketing. He pushes employees to set higher targets. He is someone who can shake Air India up and help it achieve its potential,” said one of the people, asking not to be named.

However, senior airline executives said that to attribute the growth of Turkish Airlines to Ayci’s strategy would be wrong since most of the expansions happened due to geopolitical reasons. “He is more of a political appointee. In our business with Turkish Airlines, we have never come across Ayci, which means he was not involved in daily operations of the airline,” said an executive of an airline that has a partnership with Turkish Airlines. He said that Bilal Eksi, who was the deputy chairman and CEO of the airline till January 2022, was more hands-on with operations.

The background check

The need for a security clearance for directors and executives working with airlines and airports was felt after the hijack of Indian Airlines aircraft IC-814 by Pakistan-based terrorists in December 1999. While no decision was taken immediately then, the matter was raised after the privatisation of Delhi and Mumbai airports in 2006.

A parliamentary panel had raised questions over the GMR group, which was privatising and modernising the Delhi international airport, employing a foreign national as the head of its airport project. The government then amended the Aircraft Act and included the provision of mandatory security clearance.

In 2018, the Ministry of Civil Aviation (MoCA) warned airlines and airports saying it would suspend operations of airlines and non-scheduled operators that appoint directors without prior security clearance.

Officials of airlines who have worked on the process of obtaining security clearance for foreign appointees said that while it would earlier take more than three months, the home ministry has over the past two years streamlined the process and now it takes a maximum of 60 days. “If approval hasn’t come within 60 days, assume that there have been red flags raised by security agencies and move on to get a replacement,” an official said.

He explained that the company files the requisite documents with the MoCA. The ministry’s job is to verify that the composition of the board adheres to the substantial ownership and effective control where the chairman and two-thirds of the board members of an Indian carrier are Indian citizens. “MoCA has no further role to play. It then forwards the name to the MHA, which has been done in the case of Ayci, too. If the person is an Indian citizen, the background verification would be done by the Intelligence Bureau (IB). Since Ayci is a foreign national, RAW (Research & Analysis Wing) will be involved too,” an official explained.

Another official said that just because Ayci is a Turkish citizen, it will not be a reason for denying security clearance. He cited the example of Istanbul-headquartered Celebi, one of the largest ground handling companies that has been doing business in India for more than a decade now, with presence at seven major airports of the country: Mumbai, Delhi, Bengaluru, Hyderabad, Kochi, Ahmedabad and Kannur. Security clearance of the company, which has a Turkish national on its board, has been reapproved every year and was last approved in October 2021.

However, the frosty relations between an Erdogan-led Turkey and India have weighed on the business of Turkish Airlines. The airline, despite repeated requests to the Government of India, has been unable to increase its quota of flying rights to India, which has hurt its growth plans. This is in sharp contrast to its West Asian counterparts, Emirates and Etihad, which by virtue of strong relationship between UAE and India have grown robustly here.

“While Turkish Airlines is very strong in Europe, it is weak in its presence in Asia Pacific and South Asia. This is primarily due to limited bilateral access to the Indian market, which is significant given its huge presence in the USA,” said an executive of an Indian airline. “If it was treated at par with other Gulf carriers in India, its growth could have been more prominent,” he added. That’s where geopolitics meets aviation and that’s where lies the challenge for Tata group and Ayci.