Indian aviation shifting from expat CEOs to Indian leaders
IndiGo's history: major Airbus orders, leadership shifts
Government subtly favors Indian CEOs for better public connect
Around 2005, when Rahul Bhatia and Rakesh Gangwal decided to start an airline, they wanted to keep it low in cost but high on ambition. The problem was their ambition triggered scepticism in aeroplane makers. Both Boeing and Airbus offered 50 planes.
Gangwal told them to change that number “a little” and make it 100.
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Airbus agreed. IndiGo made the biggest headline at the Paris Air Show of 2005. And Airbus has never had a cause for regret. IndiGo placed another order with Airbus in 2011, one more in 2014, and yet another in 2019—taking its total order book to 830 planes. In 2023, it created aviation history by ordering 500 planes from Airbus—the biggest single purchase agreement ever.
Someone in Airbus may have earned their retirement nest egg for trusting Gangwal. And they probably did it because of his track record. He had risen through the ranks of global aviation to become the CEO of US Airways, which in 2015 merged with American Airlines to create the world’s largest airline.
Gangwal is believed to be the brain behind the rabbit IndiGo pulled out of its hat by first getting a discount on its bulk order, then selling the planes to lessors, and leasing them back. This was the key that unlocked IndiGo’s low-cost model.
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Gangwal, who parted ways with Bhatia and IndiGo in 2022, is not the only Indian to have run an airline outside India. Ronojoy Dutta, much before he joined IndiGo as CEO in 2019, served as the president of United Airlines. Nikhil Ravishankar, who as a child thought his parents’ decision to migrate from Bengaluru to New Zealand three decades ago was “the worst idea”, last year became the CEO of Air New Zealand.
Outside of aviation, Indians head some of the largest and most admired companies in the US and Europe. Many of them are household names. Yet, Indian aviation seems to love expat CEOs.
India’s aviation market can hardly be called a duopoly, given IndiGo lords over 65 percent of the market. But, till recently, it was a near-monopoly of expat CEOs, with Pieter Elbers (earlier with KLM) heading IndiGo and Cambell Wilson (ex-Singapore Airlines) at Air India. At various points, GoFirst was run by Ben Baldanza, Jet Airways by Wolfgang Prock-Schauer and Nikos Kardassis, and Vistara by Leslie Thng.
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The theory goes that Indian aviation, from the time of its nationalisation in 1953 till the repeal of the Air Corporations Act in 1994, was a basket case and did not produce true leaders—the CEO-types who would flex their muscles in aircraft orders and leasing with global organisations, in managing international networks, and handling global regulatory responsibilities.
In early-February, “source-based” news reports said the government was in favour of Indians running India’s airlines. This was not a directive—it is not really the government’s business who runs which company—but a sort of subtle suggestion that Indians would respond better to the rising need for public connect in the burgeoning market.
This could be a direct fallout of what happened at IndiGo in December, when it cancelled 5,000 flights. An internal probe, say reports, blamed the top management for not preparing enough for the new rest rule for pilots.
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It was quite a mess, and Elbers appears to have paid the price for it, resigning on March 10 and leaving without a notice period and without a thank-you note appended with Bhatia’s email that announced the change. But the issue, as IndiGo’s internal probe seems to say, was probably the failure of the top management, not their nationality. It is because ability is valued over nationality that so many Indians run global corporations.
