The appointment of aviation heavyweight Willie Walsh as Chief Executive Officer 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.
The largest airline in India, which holds about 65% of domestic flights, surprised the industry with the appointment of Walsh on Tuesday. This decision comes after months of negative press and regulatory pressures following the cancellation of thousands of flights in December, resulting from inadequate pilot rest and service planning.
IndiGo is counting on the current head of the International Air Transport Association (IATA) to lead the company following its most serious crisis in twenty years.
Walsh, 64, has already described the sector as a “struggle for survival”. His first role as CEO at Irish carrier Aer Lingus saw him clash with unions and cut costs, earning him the nickname “Slasher Walsh”.
He oversaw the company’s transition from short and medium-haul to long-haul flights – an experience that should prove valuable for IndiGo, according to Joshua Ng, director at Alton Aviation Consultancy.
Walsh’s appointment can be seen as a priority for IndiGo in expanding its global network and strategic partnerships, according to several analysts speaking to Reuters.
Investors shared this view, driving IndiGo’s stock up by 6% the day after the announcement. So far this year, the shares had dropped by 22%, following an 11% increase last year.
Walsh, who also served as CEO of International Airlines Group (parent company of BA), will finish his term at IATA on July 31 and is expected to assume his new role at IndiGo by August 3. Neither Walsh nor IndiGo responded to email requests for comments.
CLOSURE OF PAKISTAN’S AIRSPACE
Aside from the company’s own challenges, Walsh will have to deal with the fallout from the animosity 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 launched missiles at what it called terrorists in Pakistani-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 lengthened these routes but also drove up fuel prices, further complicating international expansion.
Walsh’s leadership of a “multi-brand airline group” could support IndiGo’s positioning in partnerships, negotiations, and political engagement as it expands its international footprint, wrote analysts at Jefferies in a research note.
Under the leadership of current CEO Pieter Elbers, IndiGo has cemented its domestic dominance and expanded towards Europe and other regions, while ordering 60 Airbus wide-body jets and many long-range single-aisle planes.
As IndiGo expands internationally, it will need a new structure for its products and operational model, likely requiring the recruitment of additional senior executives under Walsh’s guidance, estimated Kapil Kaul, CEO of aviation consultancy CAPA India.
IndiGo serves more than 40 international destinations, up from just over 25 in 2022, and operates about 440 aircraft. It is expecting its first Airbus A350 by 2028, one year behind the original schedule.
