20 years since its inception, IndiGo has surged ahead of its competition and, as of 2024, commands more than 60 percent of the Indian domestic airline market.
Rakesh Gangwal, co-founder of IndiGo
In just five months, Rakesh Gangwal, co-founder of IndiGo, has transitioned from being appointed as a Director on the board of Southwest Airlines to being named its Chairperson. His appointment comes in response to continued pressure from activist investor Elliott Investment Management, driven by concerns over Southwest’s declining financial performance and stock value. In addition, Southwest is grappling with aircraft delivery delays, overdue maintenance and technology upgrades to address frequent operational disruptions, and regulatory scrutiny over safety issues. While the prevalence of Indian-origin executives in the upper echelons of corporate America is well-documented, the hiring of a seasoned U.S. airline industry veteran like Gangwal should not come as a surprise. What truly stands out, however, is not only his deep expertise in the U.S. aviation sector but, more notably, his proven track record of founding and successfully managing an airline in India.
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Southwest Airlines, a pioneer in providing efficient, low-cost air travel, has inspired numerous replications worldwide, including Rakesh Gangwal’s IndiGo in India. Southwest, since its inception under the leadership of its maverick founder, the late Herb Kelleher, has achieved remarkable success in a highly competitive industry and has been the focus of several Harvard MBA case studies.
Rakesh Gangwal’s career in the U.S. airline industry is distinguished by his leadership roles at major legacy carriers, where he served as Vice President at United Airlines and CEO at US Airways. In an effort to protect market share from Southwest’s low-cost model, he launched low-cost subsidiaries Shuttle at United and MetroJet at US Airways. Although these ventures were ultimately discontinued, they provided Gangwal with valuable lessons that laid the groundwork for his success in establishing IndiGo.
Twenty years since its inception, IndiGo has surged ahead of its competition and, as of 2024, commands more than 60% of the Indian domestic airline market. Its stock price has increased fourfold since its public listing less than a decade ago. In his book Sky High: The IndiGo Story, Tarun Shukla attributes a significant portion of IndiGo’s success to Rakesh Gangwal’s strategic acumen. Shukla highlights Gangwal’s role in making astute financing decisions, leveraging his deep knowledge of the aviation sector and relationships with upstream partners, maintaining a meticulous eye for detail, and rigorously questioning executive decisions to ensure sound logic and economic viability.
Gangwal’s influence extended beyond IndiGo’s initial startup phase; he played a pivotal role during critical junctures in the airline’s journey. The strategic decisions he made as a co-promoter helped stabilize IndiGo’s performance on key industry metrics during the mid-to-late 2010s, ensuring its sustained growth in a challenging market environment.
Rakesh Gangwal’s return to the U.S. aviation industry marks a promising new chapter. Southwest Airlines has, for the moment, addressed the pressures from Elliott Investment Management by restructuring its board and appointing an industry veteran with extensive experience in both full-service and low-cost carriers as Chairperson. More significantly, this move places Gangwal in a pivotal advisory position alongside CEO Bob Jordan, a seasoned executive with more than three decades at Southwest. Known for his reclusive nature and media reticence, Gangwal’s leadership is expected to guide the board in offering deeper, more focused insights to the airline's executives without attracting undue media attention. His recent acquisition of 3.6 million Southwest Airlines shares not only bodes well for shareholders but also underscores his confidence in the airline’s strategic direction and financial prospects.
Only time will reveal how Southwest Airlines performs in the years to come, the impact of Rakesh Gangwal’s leadership on the airline’s trajectory, and whether students will one day study a new chapter in Southwest’s history one shaped by an immigrant Indian leader. However, one outcome seems certain: going forward, board meetings will certainly become more rigorous affairs, requiring CEO Bob Jordan and his team to be thoroughly prepared as they navigate Gangwal’s high standards and strategic scrutiny.
This article is authored By Abu Rehan Abbasi, Strategy area at the Indian Institute of Management Kashipur (IIM Kashipur).
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