Mounting Problems At Deccan
That Gopinath was strapped for funds (by his own admission) was well known. What is less known is how he was gradually alienating two of his top team members — Warwick Brady, chief operating officer and Mohan Kumar, former chief financial officer and a close friend. This led to both men resigning within days of each other earlier this February.

After relying heavily on Brady in the months after he joined — he was hired against Gopinath’s wishes and at the insistence of his investors, ICICI Venture and Capital International — Gopinath began to sideline him. Brady slowly found himself kept away from key decisions, including the hiring of the new CFO Ramki Sundaram, who was previously with London-based bank Investec, which structured a $100-million deal for Air Deccan in September 2006. Two executives he had brought in from Ryanair were fired by SMS under his nose, airline sources told BW. To top it all, there was a dispute over the total number of shares allotted to him, the sources said. From a situation where Brady was consulted for each and every decision, all of a sudden he found himself just one of the top five or six people.

This, despite the fact that Brady — with his keen eye for detail and ruthlessness with cost cutting — had improved the airline’s performance dramatically. Brady was responsible for route rationalisation, but new routes like Leh and Pathankot were started without his knowledge. His associates say that he would find routes he had withdrawn (as they were making losses) re-introduced and decisions overturned when he came back from holiday. He wanted the old ATRs (which gave no end of trouble) to be retired or at least hived off from the main business but met with resistance from his managing director. Gopinath’s lack of business sense convinced company officials that he truly only wanted to see every Indian fly. “If you asked him if he wants to make profits or fly to 100 new destinations, he’d choose the latter,” says one company source. He wanted growth, at any cost.

Brady — unhappy with the way things were being run — demanded the job of CEO, failing which he’d quit. Gopinath was not convinced that he could handle the CEO’s job. “The airline still had huge engineering problems,” he says. “I would have made him the CEO but I first wanted him to fully fix what he came in to do.” Also, he was of the view that as a foreigner, Brady’s ability to liaison with the aviation ministry, Directorate General for Civil Aviation (DGCA) and Airport Authority of India (AAI) was limited. With a kind of impasse between the two, Brady put in his papers in February 2007. One of Gopinath’s close aides told him that “he couldn’t afford to lose Warwick at this stage”. The last word on Brady’s departure — on July 1 — however, may not have been heard, if the institutional investors and Mallya have their way.

The extent of Gopinath’s growing distance from his key people became evident in his dealing with former CFO Kumar, who’d been by his side since 1996 when the company was still in its inception stage. Kumar had come up with an alternative plan — based on securitising the company’s receivables — for funding the airline, which he argued had to be completed before 31 March 2007. Till 31 December, the results of the airline were not looking as bad as after the last, disastrous quarter and so it was a good time to raise the money. Kumar asked for a parallel mandate to raise money, arguing that Gopinath was pushing himself into a corner. Yet, as the exercise progressed, he was kept entirely out of the loop. Kumar had told Gopinath to make Brady the CEO, a suggestion the captain clearly didn’t like. Sensing the fact that he was no longer wanted, Kumar put in his papers on February 1 (he also forfeits his shares). Gopinath’s growing alienation and disenchantment with those who worked closely with him surprised many in Deccan — but some of his employees who have been with him from the start say that he means well but his expectations are sky high, so he sets himself up for disappointment.