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Jet Airways' New CEO Gary Toomey Faces Big Challenges: Manu Kaushik
Jet Airways' New CEO Gary Toomey Faces Big Challenges: Manu Kaushik
Apart from creating synergies between Jet and Etihad Airways, Gary K. Toomey has
to steer the airline through a bitterly domestic competitive market where low-cost Malaysian
Manu Kaushik
Following the departure of Nikos Kardassis last week, Jet Airways on Thursday (June 13)
appointed Gary K. Toomey, 58, as its new CEO. Toomey, an Australian, had previously
served as president and CEO of the Air New Zealand Group. He has spent more than 20 years
in the aviation industry working in senior positions in airlines such as Qantas and Airlines of
The challenge for Toomey will be to create synergies between Jet and the Abu Dhabi-based
Etihad Airways, which acquired a 24 per cent stake in Jet in April for Rs 2,058 crore, the
biggest foreign investment in the Indian aviation sector after the government allowed foreign
carriers to invest in Indian carriers last year. Toomey has a daunting task ahead. Taking on
competitors such as IndiGo and SpiceJet, whose financials are in a far better state than Jet's,
will not be easy. With low-cost Malaysian airline AirAsia also expected to enter Indian skies,
experts are already predicting a bloodbath in which only the fittest will survive.
Kardassis quit after nearly 43 months with Jet Airways. He was a personal favourite of Jet
Airways Founder-Chairman Naresh Goyal. Kardassis took some bold steps to reduce losses
by focusing on profitable routes and cutting down loss-making ones. But he was unable to
make the company profitable - Jet has been posting net losses for the last five financial years.
Goyal himself too is an aviation industry legend. He began as a cashier but has risen to
become one of the most influential people in this sector. It is said that one stage Goyal knew
The biggest challenge facing the new management at Jet Airways, including its recently
appointed chief executive officer Gary Kenneth Toomey, will be to ensure that the carrier's
The Naresh Goyal promoted airline, where the Abu Dhabi-based Etihad Airways has
picked up a minority stake, makes money on international routes but is heavily bleeding
when it comes to domestic operation. In 2012-13, the losses of the airline from domestic
operations has been over Rs 1,100 crore, whereas, the international operations fetched them a
"The new management would urgently need to work towards making its domestic
operations profitable. Making Jet Airways' domestic operations profitable is necessary for the
airline and for the domestic aviation industry," said Kapil Kaul, CEO of Centre for Asia
Pacific Aviation, an aviation consultancy firm. Kaul further said that Jet needs to put a
business model in place for the domestic operations and put a right framework in place to
support it.
Jet operated with three different brands in the domestic market till sometime back.
The number has been brought down to two — Jet Airways and JetKonnect — but the airline's
dynamism in pricing the inventory leaves a thin line of difference between a full service and
low-cost pricing.
"They need to get clarity on the model they will follow — low cost, full service or a
mix of two — and support it with the right cost of operations. They can not compete with
low-cost carriers in offering low fares with their high cost of operations," he added.
A Jet Airways' spokesperson did not offer any comment on the agenda of the new
management. Not only is the airline making losses in the domestic sector, it is also losing
market share in the domestic sector to other carriers. The airline, which was the largest carrier
in terms of passengers carried till June 2012, has been consistently losing market share with
its market share falling from 26.2 per cent in January to 22.5 per cent in May 2013.