Jet Airways CEO Cramer Ball resigns

Cramer Ball has resigned as chief executive of Jet Airways (India) Ltd, the country’s second-largest airline by passengers carried. Ball will join Italy’s national airline Alitalia as chief executive officer (CEO).

Ball’s resignation from Jet Airways is effective from 29 February. Jet said Ball resigned to pursue a new opportunity in Europe for family reasons.

Gaurang Shetty, a whole-time director, will become acting CEO of the firm in which Etihad Airways PJSC has a 24% stake, the airline said in a statement on Thursday. Shetty will lead the operating committee in managing the day-to-day operations of the company, under the supervision and control of the board of the company, chaired by founder Naresh Goyal, the airline said.

Ball, who had taken charge as CEO from 25 September 2014, was considered the nominee of Etihad Airways. He was heading Air Seychelles, a strategic partner of Etihad. Before joining Air Seychelles, Ball was regional general manager for Asia-Pacific South and Australasia at Etihad Airways, which holds 40% equity in Air Seychelles. Ball is going to another partner airline of Etihad.

Etihad bought a 49% stake in Alitalia on 8 August 2014.

Frequent exits of CEOs is nothing new for Goyal’s Jet Airways. While Ball spent barely a year and three months at Jet Airways, his immediate predecessor Garry Kenneth Toomey stepped down after a even shorter stint. He was CEO for barely seven months. Toomey, an Australian national, took charge of Jet Airways in mid-June 2013 following the resignation of Nikos Kardassis, who left the airline after serving his second term as CEO from October 2009 to May 2013. Kardassis had earlier headed the airline between 1993 and 1999.

Wolfgang Prock-Schauer, the current CEO at low-fare airline GoAir was also CEO of Jet Airways between 2003 and 2009.

K. Sudarshan, managing partner (Asia) with EMA Partners International, an executive search firm, says the rate of churn is not good for Jet Airways.

“But it is not going to rock the boat of Jet Airways as it is a well-oiled machine that has consistent continuity to take care of day-to-day operations at the next level of management. Goyal has created several layers of managerial capabilities to run the airline including Shetty,” Sudarshan said.

Aviation consultant Capa India’s chief executive officer (south Asia) Kapil Kaul said he is not surprised that Ball quit. “Even though Jet Airways’ turnaround is beginning to be visible as the recent second quarter results have shown, management stability at the top continues to be challenging and increases strategic risk. I don’t see structural turnaround possible with continuing management churn at the top,” he said.

Jet Airways expects to return to profit by 2017-18 on the back of cost reductions, expanding capacity without adding planes and more revenue from code-share partners. In the beginning of fiscal 2015, Jet Airways had formed a three-year turnaround plan to return to profitability.

A person close to the development said on condition of anonymity that there were rifts between chairman Goyal and the CEO, adding the firm would lose out on business due to frequent management changes.

He added that the international expansion of Jet Airways is no more aggressive post the investment by Etihad while the Mumbai-based airline is losing focus on domestic strategy, too.

In an interview in August, Goyal, a former travel agent who built Jet Airways from scratch before selling a 24% stake in it to Etihad Airways in November 2013, had said he’s still the captain of the ship.

“I am in complete control of Jet Airways. I am not playing second fiddle to anyone,” Goyal had said.

In a Thursday statement, Goyal said Ball has, during his tenure, made a significant contribution in the journey to turnaround Jet Airways and the company recorded two consecutive profitable quarters after a gap of eight years.

Ball said he is honoured to have been able to play a part in the turnaround of Jet Airways, as it moves towards long-term sustainable profitability.

“The people at Jet Airways have worked as a team to get this business into shape and I am pleased with the progress that has been made,” Ball added.

Ball, 48, has more than 20 years of aviation experience and is expected to pilot the development and implementation of loss making Alitalia’s industrial plan, with a target to make the company profitable in 2017.

Jet Airways board will convene shortly to find a now CEO to steer the airline’s turnaround plan. Jet Airways’ fiscal second-quarter profit rose 25% owing to higher revenue and lower fuel prices. That was the airline group’s second consecutive profitable quarter in the current fiscal.

Shares of Jet Airways rose 2.71% to Rs.614.95 on Thursday on BSE; benchmark Sensex rose 1.21% to close at 25,803.78 points.