The operational crisis at India’s premier budget carrier (also the country’s largest airline), IndiGo, which has resulted in hundreds of flight cancellations throughout the first week of December, is raising speculations over the removal of the company’s Chief Executive Officer, Pieter Elbers. However, the company’s board members believe that Elbers, having handled multiple crises, can help script a turnaround for the airline.
IndiGo, known for operating at least 60% of domestic flights in India, is facing one of the worst crises in the history of global aviation. The disruption has so far resulted in mass cancellations, widespread delays, and the company paying refunds amounting to 827 crore rupees. Shares of InterGlobe Aviation, IndiGo’s parent, fell nearly 9% on November 8, with the company losing nearly 18,000 crore rupees worth of market valuation.
The whole crisis started as India’s new passenger safety norms came into effect. It has put strict emphasis on the duty timings of pilots and flight crew, making sure they get a mandatory weekly rest period of 36 to 48 hours, while capping the flying hours that continue into the night to 10 hours.
While IndiGo’s rivals Air India and SpiceJet have already hired more staff to comply with the new rules, IndiGo, which runs 2,200 flights daily, has fallen short of the crew, resulting in massive flight cancellations, causing an ordeal for thousands of flyers.
While the Narendra Modi-led Indian government has relaxed the new aviation safety rules, it is in no mood to let the airline go unpunished. Apart from show-causing Pieter Elbers, the South Asian country’s civil aviation ministry is also mulling drastic moves like slashing IndiGo’s winter schedule and reducing the number of flights by 5%.
Amid the chaos, while the company’s board members anonymously expressed their views on Pieter Elbers’ future at the company to the leading Indian business daily Business Standard, no conclusion has been reached yet.
A board member said that while removing Pieter Elbers was an option, finding a new CEO who can run an airline operating around 2,300 daily flights is not easy. Expressing confidence in Elbers’ capability, a second board member said he had handled multiple crises as an aviation industry veteran, and the ongoing chaos was “another major crisis” he must manage effectively.
The first member, however, said if the Narendra Modi government puts “intense pressure,” along with a “substantial financial penalty,” the company may have to think about a leadership change. The second member highlighted that disciplinary action could instead be directed at other senior executives responsible for managing the pilot duty roster and overseeing hiring.
IndiGo has nine members on its board, chaired by Vikram Singh Mehta, a former IAS officer and ex-head of Shell India. Promoter-director Rahul Bhatia is serving as managing director. The board also includes the likes of senior lawyer Pallavi Shardul Shroff and former Indian Air Force chief BS Dhanoa, with the duo serving as independent directors. Michael Gordon Whitaker, former head of the US Federal Aviation Administration (FAA), is also an independent director.
Meleveetil Damodaran, former Sebi chairman, sits on the board as a non-executive director, along with finance veteran Anil Parashar and former WestJet chief executive Gregg Albert Saretsky. Amitabh Kant, former Niti Aayog CEO, is also a non-executive director.
Photo Credits: IndiGo