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Walsh must repair IndiGo's reputation before driving global expansion

Willie Walsh's appointment as IndiGo CEO is expected to boost the Indian carrier's global expansion, but first the former British Airways chief must repair the airline’s damaged reputation.

Walsh's Tuesday appointment as India's largest airline, which controls about 65% domestic flights, stunned the industry. This was after months of negative media and regulatory pressure following the cancellation of thousands of flights by the airline in December because of inadequate planning of pilot rest and duty regulations.

IndiGo has entrusted the head of the International Air Transport Association to lead the airline after the worst crisis it has experienced in two decades.

Walsh, who will take over in August, must address the operational mismanagement that led to regulatory warnings.

Rajan Mehra said that repairing IndiGo's image won't be done overnight. "Given how they failed in December," he added. "But he's an experienced hand. He should be able?to do it."

Walsh, 64 years old, described the airline industry as "a fight for survival". In his first role as CEO at Ireland's Aer Lingus, Walsh was known for clashing with unions while cutting costs.

Joshua Ng of Alton Aviation Consultancy, a director, stated that he had overseen the transition from a short- and medium haul airline to a long-haul carrier. This experience will be very valuable for IndiGo.

Analysts have said that IndiGo's decision to appoint Walsh shows its commitment to global expansion and strategic alliances.

IndiGo's shares rose 6% on the day following the announcement. It had gained 11% in the previous year, but lost 22% so far this year.

Walsh, who is also the CEO of BA's parent company International Airlines Group, will end his IATA tenure on July 31, and IndiGo anticipates that he will assume his new position by August 3. Email requests for comment were not answered by either IndiGo or Walsh.

PAKISTAN AEROSCAPE BAN

Walsh's job will include navigating the fallout from the animosity between India and Pakistan, as well as Israel's and the U.S. war against Iran.

Pakistan barred Indian airlines from its airspace last year after India fired missiles at what ?it called terrorists in Pakistan-administered Kashmir. Indian airlines have been forced to divert flights to western destinations due to the ban, which has increased flight times and costs.

The war in the Middle East has caused fuel prices to soar, complicating international expansion.

In a client note, Jefferies analysts said that Walsh's "leadership of a multibrand airline group" could improve IndiGo's position in terms of partnerships, negotiations and policy engagement, as IndiGo builds a larger international footprint.

IndiGo, under the previous CEO Pieter Elbers cemented its domestic leadership and expanded into other regions in Europe, placing orders for 60 Airbus Widebody aircraft as well as many long-range single aisle?jets.

Kapil Kaul is the CEO of aviation consultancy CAPA India. He said that as IndiGo expands its international reach, it will need a new product and operational model. It may also require more senior executives to work under Walsh.

IndiGo now flies to over 40 international destinations (up from 25 in 2022), and has about 440 aircraft. The airline expects to have its first Airbus A350 by 2028, one year later than originally planned.

(source: Reuters)