VJ Kurian & the CIAL Saga

Cochin International airport limited

Sruthi.G(T21097)

Madhulatha.B(T21098)

Rama Naidu(T21099)

Sravan Kumar(21100)

Gaurav Wankhde(T21101)

• Cochin International Airport (CIAL)  is the first Greenfield airport setup in the public private partnership (PPP) model in civil aviation infrastructure sector in India.

• Cochin International Airport  is an international airport serving the city of Kochi and its neighboring districts. The airport is located in Nedumbassery, in the state of Kerala, India.

• It is the busiest and largest airport in the state of Kerala. For the financial year 2012-13.

• it was the fourth busiest airport in India in terms of international passenger traffic.

The case is a solid material for motivating young minds in India against corruption

The case study is Sponsored by BASF INDIA LTD. This is a story of a civil servant fought against odds. It is a rare success story of PPP model in India at

time(1999) This is a story of The man was full of ideas, often

totally novel, and he knew how to implement them through team work and with the confidence of everyone in the organization

The case narrates the success of strong determination, persistence, leadership, financial discipline and the ability to operationalize ideas and plans under difficult conditions and under the shadow of vested political interests

• The Day of Joy for CIAL 2004 august31, CIAL crossed Breakeven and starts earning Profits

LOCATION ADVANTAGES

The Cochin International Airport is strategically located with easy access to all three National Highways passing through Kerala (NH 47, NH 17 and NH 49) and is only half-an-hour drive away from the city.

The main Railway line from Kanyakumari to Delhi is adjacent to the airport and it is situated between Alwaye and Angamaly Railway Stations.

The Cochin Sea Port, one of the biggest in the country is also situated close by.

Profitable phase

• Operating profit is reasonable ever since its operations in 1999• Soon after Kurian return in 2003 as MD they

have completely gone for restructuring the entire debt• But due to huge interest burden its not able to

make profits until 2004• By raising further equity in capital structure they

are able to reduce interest burden

Debt Restructuring process

• In 2002-03 Costly HUDCO debt reduced by 65%• Same time cheaper debt funds(from federal

Bank) Increased by 140%• Kurian also come to an agreement with HUDCO

to convert 520 Million worth of loan into equity it bought down Interest burden to 11% This help in reducing the Interest burden• In 2003-04 the reduced interest rates, growth in

revenues and operating profits makes it to cross Break even point

Strategic Issue Diagnosis

• Lack of ownership till kurian• Pessimistic view of bureaucrats• Financial viability business model• Land acquisition and related problems• Opposition from vested interests• Political inference• Funding for the New Airport

PEST ANALYSIS

Political Factors• On corruption front Kerala can rarely make a

difference• So the story of CIAL could have been the story

of other organizations in Public sector but the difference comes from strong leadership• Vested Interest Opposition to move domestic

Operations from old airport to new airport• Political interference in recruitment & Contracts• Significant role of political interference to change

the top management

Business & Operational climate(Social Factors)

• The states Business and Operational climate is Uncertain factors are• Public attitude• Labor issues• Political pressures• Undue social obligations

Economic Factors

• The project has begun post to LPG in India which makes it easier for attracting funds from Investors• The Kerala Economy which is more depends

upon the Tourism also gave a push to New airport construction

Management StyleManagement Style Kurian

Altruistic style Very High

Entrepreneurial style Very High

Pioneering Innovative style

Very High

Participative style High

Professional style Moderate

Organic style Moderate

Intuitive style Moderate

• Management Style – Situational based• Sensible way of handling the situations• Fall in the rational planning reference frame• Optimal utilization of resources – short hierarchy,

Emphasizing on Emphasis• Never resonated like a public sector organization

– passenger abuse, cameras• Neither stringent nor lenient towards employees

• Transformational leadership Qualities in Kurian• Kurian as the Organization builder• Systems, policies, procedures for effective

functioning post 2002• Two recognized labor unions• Transparency in operations

• Philanthropic – “Enough for me, now for the society.

Orphanage education, Monetary help from his own pockets.

•Strategic management skills of Kurian• Kurian Demonstrated leadership by mobilizing the

strengths of the enterprise and overcoming its weaknesses• Exercised personal skills to negotiate with, influence

and persuade stakeholders within and beyond the enterprise.• Established clear priorities and achieved desired

results, identifying and resolving significant issues continuously and proactively.• Kurian has become an origin of value – creating asset

with his reputation management skills and innovation skills.

•How Kurian Managed the strategic change and transformation?

• Pursued realistic growth ambitions• Non – compromising about his decisions and strategies• Having a mindset of not being change – averse and motivated employees

about the change.

• I reckon Kurian undertook BPR when he joined back organisation• I reckon that the insightful analysis of Kurian identifies his leadership role as

DESIGNER, TEACHER, STEWARD