Why IndiGo's board is not keen on removing CEO Pieter Elbers amid crisis

Even as IndiGo's cancellations, delays and refunds mount, several board members argue Pieter Elbers' crisis-handling record and experience make his removal neither simple nor necessarily wise

The operational crisis at India’s largest airline IndiGo’s has raised speculations over the removal of 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, which operates at least 60 per cent of domestic flights in India, is facing one of the worst crises in recent times. The disruption, now stretching into its eighth day, has resulted in mass cancellations, widespread delays and the company paying refunds amounting to ₹827 crore. The airline cancelled over 500 flights on November 5 and at least 650 flights on November 7, leaving thousands of passengers stranded across the country. Shares of InterGlobe Aviation fell nearly 9 per cent on Monday, with the company losing nearly ₹18,000 crore in market valuation.

 

 

Amid the chaos, discussions about Elbers’ possible removal have intensified. However, a final decision is not in sight. Several board members anonymously expressed their views on Elbers’ future at the company.

Why is removing Elbers not straightforward?

A board member told Business Standard's Deepak Patel on condition of anonymity that removing Elbers was an option, but added that finding a chief executive who can run an airline operating around 2,300 daily flights is not easy. Any such decision would have to be carefully thought through.

 

Expressing confidence in Elbers’ capability, a second board member said he had handled multiple crises during his long aviation career and that this was “another major crisis” he must manage effectively. “He was the CEO of KLM before. He is known globally as a thorough professional. I don’t think it is right to remove him over one lapse. The focus should be on restoring operations, not on removing a key management personnel (KMP),” the member said.

Is leadership change still possible?

The first member said if government pressure “intensified” and if the financial penalty was “substantial”, top management change could be considered. But he said there was no unanimity within the board on retaining or removing Elbers.

 

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.

Why do some board members oppose removing Elbers?

A third board member pointed to a recent incident involving another airline that operated an aircraft with an expired licence and was involved in an air crash. “Their CEO has not resigned. So demanding Elbers’ removal does not make much sense. Yes, people suffered because of operational mismanagement, but there has been no safety lapse or loss of life,” the member said.

 

However, the member added that discussions with the government were underway and the final decision on Elbers’ tenure could still change.

Who are the members of IndiGo’s board?

IndiGo has nine members on its board. It is chaired by Vikram Singh Mehta, a former IAS officer and ex-head of Shell India. Promoter-director Rahul Bhatia serves as managing director.

 

The board also includes senior lawyer Pallavi Shardul Shroff and former Indian Air Force chief B S Dhanoa as independent directors. Michael Gordon Whitaker, former head of the US Federal Aviation Administration, 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.