Jet CEO Kardassis Resigns After Pact to Sell Stake to Etihad
Jet Airways (India) Ltd. (JETIN) said its Chief Executive Officer Nikos Kardassis resigned, less than two months after the carrier agreed to sell a stake to Etihad Airways PJSC.
Chief Operating Officer Hameed Ali will lead the airline until the board identifies a new chief executive, the Mumbai-based company said in a stock exchange filing yesterday. Kardassis, who became CEO of the carrier for a second time in October 2009, resigned with effect from June 5.
The new CEO faces a challenge to end six years of losses and pare debt at Jet Airways as competition in India is set to intensify with the entry of AirAsia Bhd (AIRA), the region’s biggest discount carrier. Chairman Naresh Goyal in April agreed to sell a 24 percent stake to Abu Dhabi’s Etihad as he seeks funds needed to pay for expansion.
Jet Airways fell 2 percent to 453.55 rupees at the close of trading in Mumbai, before the statement was released. The benchmark S&P BSE Sensex dropped 0.5 percent.
Kardassis was also the CEO of Jet Airways from 1994 to 1999. Before returning to the role in 2009, he was a senior vice president for the North American operations of the carrier, according to the company website.
“The timing of Nikos’s exit is a concern,” said Mark D. Martin, chief executive officer of Dubai-based Martin Consulting LLC that advises airlines. “The challenge for whoever succeeds him will be to manage the interests of both Jet and Etihad at the board level and the business objectives.”
Etihad can appoint three directors on Jet’s board, according to an exchange filing.
India eased aviation investment rules in September to allow foreign carriers to own as much as a 49 percent stake in local airlines. In March, AirAsia formed a venture with Tata Group to set up a local low-fare airline. The Malaysian company aims to start its Indian operations in September.
Jet plans to order more aircraft in an effort to regain market share from discount carriers. The company is considering an order for Boeing Co. 737 planes, K.G. Vishwanath, the carrier’s vice president of commercial strategy, told analysts in a conference call May 27.
The carrier last month posted a wider-than-estimated fourth-quarter loss of 4.96 billion rupees ($87 million) as aircraft lease costs increased and the airline had a one-time expense. Jet hasn’t posted an annual profit in the six years through March.
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