WION Web Team New Delhi, Delhi, India
Jul 10, 2019, 06.32 PM
Differences between the promoters of the country's largest airline IndiGo came into public on Tuesday with Rakesh Gangwal alleging serious governance lapses by co-founder Rahul Bhatia who had earlier termed his demands as unreasonable.
With the issues brewing for nearly a year, Gangwal has sought markets regulator Sebi's intervention to address the problems. Now, fearing the impact of the row on employees morale and operations, IndiGo CEO has written a letter to employees. The CEO wrote in the letter that the issues between promoters have "nothing to do" with IndiGo and its functioning. He also said the the airline's "mission, direction and growth strategy remains unchanged, and firmly in place".
As the differences between the founder-partners are a result of fault in IndiGo's existing structure and strategy, including differences pace of expansion, use of aircraft for overseas operations, experts say the ongoing row can lower the morale of the employees and can result in delay in decision making that can impact its overall operations.
Some experts say the promoters' spat could even lead to IndiGo's fall. The differences also stem from the different background of the airline promoters. Gangwal is a veteran aviation professional with rich experience in management positions at top airlines. He is reportedly in favour of aggressive expansion in both Indian and international markets. Bhatia, meanwhile, has a background in travel and hospitality sector and he prefers a cautious approach.
The differences have cropped up on the overseas expansion plans of the airline where Gangwal and Bhatia camps have their own differences. The other point of difference is the use of wide-body aircraft vis-a-vis narrow-body. Gangwal is in favour of narrow-body aircraft like Airbus A-321 Neos for its international operations, and codeshare agreements with other global carriers to cater to long-haul passengers whereas Bhatia sees higher value in wide-bodied aircraft for its international expansion.
The continuing dispute between the promoters is already impacting the share price of the airline and the IndiGo share price is already down by over 11 per cent today.
Experts say the ongoing row can lower the morale of the employees and can result in delay in decision making that can impact IndiGo's overall operations