Willie Walsh will have to repair IndiGo's image before driving global expansion

The appointment of aviation heavyweight Willie Walsh as CEO of IndiGo is likely to bolster the Indian airline's global expansion but the former British Airways (BA) chief first has to repair its dented reputation.

India's largest airline commanding about 65% of domestic flights stunned the industry with Walsh's appointment on Tuesday. That followed months of negative press and regulatory pressure after it cancelled thousands of flights in December due to inadequate planning for pilot rest and duty rules.

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IndiGo is betting on the current head of the International Air Transport Association (IATA) lobby ‌to pilot the ⁠airline in ⁠the aftermath of the biggest crisis in its two-decade history.

Its hard-earned reputation for punctuality was trashed when the cancellations stranded tens of thousands of passengers and drew regulatory warnings for operational mismanagement, which Walsh will need to address when he takes charge by August.

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"Repairing IndiGo's reputation won't happen overnight, given the way they faltered in December," said Rajan Mehra, former India head of Qatar Airways. "But he is an experienced hand, so he should be able to do it."

Walsh, 64, once described the industry as a "fight for survival". His first CEO role at Ireland's Aer Lingus involved clashing with unions and slashing costs, earning him the ⁠nickname "Slasher Walsh".

He oversaw ‌the short- and medium-haul airline's transition to long haul - experience likely to be valuable to IndiGo, said Joshua Ng, director at Alton Aviation Consultancy.

Walsh's appointment can therefore be interpreted as IndiGo prioritising global network expansion and ⁠strategic partnerships, several analysts told Reuters.

Investors concurred, pushing IndiGo's share price up 6% the day after the appointment was announced. Until that point, it had lost 22% this year after rising 11% last year.

Walsh, who was also CEO of BA parent International Airlines Group, ends his IATA term on July 31 and IndiGo expects him to assume his new role by August 3. Neither Walsh nor IndiGo responded to emailed requests seeking comment.

Pakistan airspace ban

Beyond company-specific issues, Walsh will have to navigate the fallout of both India-Pakistan animosity as well as the U.S. and Israel's war against Iran.

Pakistan barred Indian airlines from its airspace last year after India fired missiles at terrorists in Pakistan-occupied Kashmir. The ban has forced Indian airlines to reroute flights to western destinations, significantly increasing flight times and costs.

War in the Middle East has not only added more time to those routes but has sent fuel prices soaring, further ⁠complicating international expansion.

Walsh's "helming of a multi-brand airline group could help IndiGo's positioning in partnerships, negotiations, and policy engagement as it builds a broader international footprint," Jefferies analysts wrote in a client note.

Under previous CEO Pieter Elbers, IndiGo cemented its domestic dominance and expanded to locations in Europe and other regions, while placing orders for 60 Airbus widebody aircraft and many long-range single-aisle jets.

As IndiGo further expands internationally, it will need a new structure across its product and operating model, likely requiring more senior executives under Walsh, said Kapil Kaul, CEO of aviation advisory CAPA India.

IndiGo flies to more than 40 international destinations, from more than 25 in 2022, and operates about 440 aircraft. It expects its first Airbus A350 in 2028, a year behind schedule.