Differences have cropped up between IndiGo founders Rahul Bhatia and Rakesh Gangwal over expansion strategies and certain clauses of the shareholders’ agreement, according to a report by the Economic Times.
The dispute has escalated over the last few weeks but none of the parties is considering legal options, the report said. The promoters have also so far not discussed the option of one buying the other out or exiting the airline.
Gangwal and Bhatia have different strategies for expansion of the airline, the report said. The closure of troubled airline Jet Airways, besides the financial woes of Air India, has left a gap that provides an opportunity for other airlines.
While Bhatia prefers purchasing wide-bodied aircraft for international flights, Gangwal wants to stick to the narrow-bodied Boeing 737. Gangwal thinks codeshare agreements with foreign airlines are a better option.
The report did not mention the specific clauses of the shareholders’ agreement that are causing a rift between the founders.
Law firms Khaitan & Co and J Sagar Associates are helping the founders come to an agreement. Ganwal and Bhatia have been clients of Khaitan & Co and J Sagar Associates, respectively, for a long time.
The promoters declined to comment when approached by The Economic Times.
Speculation surrounding a rift between the IndiGo founders have been doing the rounds for several months.
Last year, media reports had suggested that Gangwal and Bhatia were not on the same page regarding CEO candidates after Aditya Ghosh’s exit.
In December 2018, Moneycontrol reported that differences between the founders might explain the management rejig that took place.
In an interview with Moneycontrol around the same time, co-founder Bhatia had denied rumours of a rift.
IndiGo currently operates flights to seven international destinations – Singapore, Bangkok, Doha, Dubai, Kathmandu, Muscat, and Sharjah.
The airline had in December 2018 announced a codeshare agreement with Turkish Airlines.