The appointment of aviation heavyweight Willie Walsh as the CEO of IndiGo is expected to strengthen the Indian company’s international expansion, but the former British Airways (BA) boss must first repair a seriously tarnished reputation.
IndiGo, India’s largest airline with about 65% of domestic flights, shocked the industry with the Walsh’s appointment on Tuesday. This decision follows months of negative press and regulatory pressures after thousands of flights were cancelled in December due to inadequate pilot scheduling.
IndiGo is relying on the current head of the International Air Transport Association (IATA) to lead the company in the aftermath of its most serious crisis in its twenty-year history.
His hard-earned reputation for punctuality was called into question when the cancellations left tens of thousands of passengers stranded, leading to regulatory warnings for poor operational management, a challenge that Walsh will need to address when he takes over in August.
“The restoration of IndiGo’s reputation will not happen overnight given how they failed in December,” said Rajan Mehra, former head of Qatar Airways in India. “But he is an experienced man, so he should be able to achieve it.”
Walsh, 64, has described the industry as a “struggle for survival.” His first role as CEO at Irish airline Aer Lingus saw him clash with unions and cut costs, earning him the nickname “Slasher Walsh.”
He oversaw the transition of the company from short-haul to long-haul flights – an experience that should prove valuable for IndiGo, according to Joshua Ng, a director at Alton Aviation Consultancy.
Walsh’s appointment could be seen as a priority for IndiGo to expand its global network and strategic partnerships, according to several analysts interviewed by Reuters.
Investors shared this view, driving up IndiGo’s stock by 6% the day after the announcement. Up to that point, the stock had lost 22% this year, after an 11% increase last year.
Walsh, who was also CEO of International Airlines Group (parent company of BA), will end his term at IATA on July 31, and IndiGo expects him to assume his new role by August 3. Neither Walsh nor IndiGo responded to email requests for comments.
PAKISTANI AIRSPACE CLOSURE
In addition to the company’s specific challenges, Walsh will have to deal with the aftermath of tensions between India and Pakistan, as well as the conflict between the United States and Israel against Iran.
Pakistan banned Indian airlines from its airspace last year, after India fired missiles at what it called terrorists in Pakistan-administered Kashmir. This ban forced Indian airlines to reroute their flights to western destinations, significantly increasing travel times and costs.
The Middle East conflict not only extended these routes but also drove up fuel prices, further complicating international expansion.
Walsh’s leadership of a “multi-brand airline group could help position IndiGo in partnerships, negotiations, and political engagement as it expands its international footprint,” wrote Jefferies analysts in a research note.
Under the leadership of CEO Pieter Elbers, IndiGo has solidified its domestic dominance and expanded to Europe and other regions, while ordering 60 Airbus wide-body aircraft and many long-range single-aisle planes.
As IndiGo expands internationally, they will need a new structure for their products and operational model, likely requiring the recruitment of additional senior executives under Walsh’s guidance, according to Kapil Kaul, CEO of aviation consulting firm CAPA India.
IndiGo serves more than 40 international destinations, up from just over 25 in 2022, and operates about 440 aircraft. They expect to receive their first Airbus A350 in 2028, a year later than initially scheduled.
