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Another CEO quits. Is India aviation sector too turbulent for expats?

Jet Airways CEO Gary Toomey is not the first expat to depart after an all-too-brief stint in India. Last year, SpiceJet's CEO, South African Neil Mills too left the carrier suddenly. Earlier in 2010, Air India saw the high-profiled exits of Gustav Baldauf and Stephan Sukumar.

Manisha Singhal        Last Updated: January 16, 2014  | 21:59 IST
Another CEO quits. Is India aviation sector too turbulent for expats?

Manisha Singhal
Barely six months after Jet Airways, the country's second largest carrier, announced his appointment as its CEO, Gary K Toomey has called it quits.

Jet Airways informed the stock exchanges of the change in its top management on Thursday and said that Ravishankar Gopalakrishnan, its Chief Financial Officer will be the 'acting CEO' till such time as Jet Airways board is able to get a new person for the job.

FALLOUT WITH GOYAL?

Sources at Jet Airways provide different reasons for the exit of the 59 year old Australian, who previously worked at several global airlines.

While some at Jet claim Toomey was homesick as his wife and children had stayed behind in Australia, others say the reasons are more complex. They maintain Toomey was finding it difficult to fathom the Indian aviation market and his relationship with Jet's promoter and Chairman, Naresh Goyal, had been affected by this.

"It is tough to work with Naresh Goyal. The style of functioning in India is different from elsewhere and more so at Jet," an insider said. "On a day-to day basis, it becomes a challenge taking decisions in an environment that is not too congenial. For Toomey, who is nearing 60, the cumulative impact was to question why, at this age and with so much experience behind him, he was putting up with it all."

But Toomey is not the first expat to depart after an all-too-brief stint in India.

Last year SpiceJet's CEO, South African Neil Mills too left the carrier suddenly and one of the reasons attributed to his leaving an airline which he helped turned around was a difficult working relationship with the SpiceJet owners, the Marans (who also own Sun TV). The budget carrier is still struggling to find a replacement for Mills. Stories of Kalanithi Maran's  high-handedness with his employees are well known, and are a factor head hunting firms assigned the job of finding a new CEO are well aware of.

Earlier in 2010, the high profile exits of two expats from Air India, Gustav Baldauf who had been appointed Chief Operating Officer and Stephan Sukumar who was Chief Training Officer, also showed that foreign executives find the random nature of decision making in the country difficult to understand.

One expat aviation official, when he was leaving India in a huff, even told this reporter that this country was a "banana republic".

"I'm not too sure foreigners can operate effectively in the Indian market. There are a hundred challenges here like labour issues, getting approvals from the government, etc, which are less elsewhere and when these are combined with the high operating costs and the constant pressure to rein in costs, foreign aviation executive can find it difficult to cope and this results in differences developing with their promoters," said an aviation industry official and ex-employee of Jet who did not want to be identified.

WRONG SIGNAL

Observers feel that Toomey quitting the airline will send wrong signals to the airline employees who as it is are seeing a lot of other changes around them following the stake sale to Etihad.

Jet has a history of hiring expats as CEOs. Some call it Goyal's 'foreign fixation'. But most of the others, barring Toomey, served for a reasonable amount of time. However, there was also Maunu von Lueders, now with IATA, who was CEO at Jet's hybrid JetLite for a very brief while.

"If new guys keep walking in every now and then, it is difficult to work," says a Jet employee.

Jet is currently going through a difficult phase. Its Rs 2,058 crore deal with Etihad, in which the latter acquired a 24 per cent stake, is still facing regulatory challenges. Jet announced its worst-ever (quarterly) loss of Rs 998 crore (consolidated) in the second quarter of 2013/14.

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