Ball’s Exit May Upset Jet Airways’ Turnaround Plan

Jet Airways CEO Cramer Ball’s resignation at a time when the airline barely started showing results of his financial turnaround scheme, may unsettle the country’s largest full service carrier’s latest goal of becoming fully profitable by 2017. Ball, who is known as a turnaround strategist in the global aviation industry, joined Jet Airways in September 2014 and had kickstarted a successful financial restructuring programme to bring the airline back to profit, soon after taking over. Ball will join Italy’s national carrier Alitalia as CEO.

Ball's exit will have a drastic impact as the operational restructuring is in process at present and the key strategist’s exist would affect the continuity. Ball’s resignation from Jet Airways is effective from 29 February. Jet said on Thursday (December 17) that Cramer Ball resigned to pursue a new opportunity in Europe for family reasons and Gaurang Shetty, a whole-time director, will now become acting CEO of the airline.

Naresh Goyal-led Jet Airways in which global carrier Etihad Airways has a 24 per cent stake, has set a target of returning 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.

Jet Airways’ second-quarter profit this financial year rose 25 per cent owing to higher revenue and lower fuel prices. That was the airline group’s second consecutive profitable quarter in the current fiscal. As part of the financial restructuring plan designed by Ball, the airline has also discontinued its loss making low cost subsidiary -- Jetlite, making the company a single brand airline.

Ball, who was heading Air Seychelles, a strategic partner of Etihad Airways, was appointed at Jet Airways a year ago as a choice of Etihad. Before joining Air Seychelles, Ball was regional general manager for Asia-Pacific South and Australasia at Etihad Airways, which holds 40 per cent stake in Air Seychelles. Etihad had last year bought a 49 per cent equity in Alitalia. So, Ball is now going to another partner airline of Etihad.

Frequent exits of CEOs are nothing new for Jet Airways. While Ball spent little more than a year, at the Indian private airline, his immediate predecessor Garry Kenneth Toomey stepped down after serving at the company 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.

Aviation sector analysts say that the latest CEO exit, though not affecting the day-today operations (as the operational structure of Jet Airways is largely stable), this kind of frequent changes at the top management is not good for the airline. People close to the management of the Jet Airways also say the company would even lose out on business due to frequent management changes.

Although there are rumours that the differences between chairman and the CEOs often leads to the change in top management in the company quite frequently, Naresh Goyal had stated on Thursday that 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.

While Cramer Ball, with a total aviation experience of at least 20 years, is now going to take up the task of implementing the industrial plan of the currently loss making Alitalia, Jet Airway’s future course of action on taking the restructuring programme forward is yet to be decided.