Monday, May 23, 2022

Pieter Elbers heads for IndiGo CEO job; has task cut out to reinvent an already perfected model

Year 2022 has been full of announcements of CEO announcements for Indian airlines. First, we heard that Sanjiv Kapoor would helm the restart effort of Jet Airways. Then, after a debacle with the hiring of Ilker Ayci of Turkish Airlines, Air India has now announced the appointment of New Zealand born Campbell Wilson, who will take on the responsibilities of the airline's CEO.

The latest announcement came last week. Ronojoy Dutta, IndiGo’s current CEO, will retire by September 30, 2022, and hand over the baton to Pieter Elbers. The latter is in the process of exiting KLM after almost two terms as the CEO at the end of the month. Twenty years younger than Rono, Pieter will be able to set up IndiGo for its next stage of growth. But his first priority won’t even be that.

IndiGo has, for the longest time, let its work do the talking. However, Pieter walks into too many changes in one go. The airline is witnessing extensive changes at the top level. Promoter Rahul Bhatia took on the role of Managing Director less than six months ago. IndiGo’s Chief Commercial Officer, Willy Boulter, will leave the airline in July, and the airline already saw a change in the Chief Financial Officer earlier this year. So, many new hands on deck to work with.

Dutta’s focus over his almost four-year stint was mainly on the same lines but different. He had to work extensively to shield the company from any fallout when the co-founders, Rahul Bhatia and Rakesh Gangwal, engaged in a lengthy legal battle. It has only recently concluded with Gangwal announcing his departure from the company board.

He also had another nightmare to deal with: keeping the ship steady through COVID. Over the better part of two years, COVID continued to surprise both passengers and airlines with its phases, and Dutta did a pretty good job of keeping the airline stable, even bringing it back into profits in Q3FY22.

Elbers will enter the airline at a time when there will be two more airlines to contend with than Dutta saw. Both Akasa and Jet Airways would have taken to the skies in the coming months, and Go First, which would have hopefully set its house in order, would have managed an IPO by then, making it financially stronger.

The Tata group consolidation might have also begun, with AirAsia India being wrapped up into Air India. That won’t be an overnight process, and M&As in aviation tend to be messy if Sahara/Jet Airways or Deccan/Kingfisher or Indian Airlines/Air India taught us anything. But it will just be an enormous beast to deal with when done.

23/05/22 Ajay Awtaney/Free Press Journal

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