International Airlines Group’s new boss Luis Gallego has shaken up the group’s management a month after taking over from longstanding chief executive Willie Walsh.
Alex Cruz, chief executive of British Airways and Mr Gallego’s former rival for the top job, is the highest profile casualty. Mr Cruz will step down as British Airways chief executive, though he stays on as non-executive chairman of the airline. Mr Gallego has promoted Aer Lingus chief executive Sean Doyle to head the group’s flagship airline and elevated the boss of its low-cost airline Level to a new role of “chief transformation officer”.
IAG has been battling a sharp downturn in the aviation industry, with signs of recovery faltering in recent weeks. Numbers from Heathrow out this morning show passenger numbers were still 82 per cent lower than last year during September.
Mr Walsh postponed his retirement after the pandemic hit, staying on to launch a €2.75bn cash call to shore up the group’s balance sheet before departing at its AGM in September. At British Airways, Mr Cruz has overseen a programme to axe around 10,000 jobs in response to the crisis.
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Bankers who’ve been sitting out the pandemic in holiday villas are being summoned back to Blighty, as the City’s banks start to worry about the tax and regulatory consequences of staff doing extended stints in other countries. Senior executives at several large European and US banks told the FT they were cracking down on staff who started working thousands of miles away to be close to family or wait out lockdowns in more pleasant environs, because of a fear of hefty tax bills. Our banking team have more details here.
The Bank of England has written to City chief executives asking how ready they are for negative interest rates. Sam Woods, deputy governor of the Prudential Regulation Authority, has asked executives to outline their “operational readiness” and explain any difficulties that could arise if institutions do need to implement a zero or negative interest rate — and in particular any tech issues they may face. Communications from the Bank have sown confusion about its willingness to introduce negative rates, with the current interest rate set at 0.1 per cent, and the Bank said this consultation wasn’t an indication that zero or negative rates were around the corner.
Gambling group GVC will take a £40m hit to earnings before nasties once new German sports betting licences come into force. It said at the start of October that it expected to take a £70m hit to ebitda in 2021 from a new German gambling regime; this morning it said that under the terms of four licences granted to its bwin, Sportingbet, Ladbrokes and Gamebookers brands, ebitda would be reduced by another £40m (on an annualised basis) once the licences were implemented. GVC expects that to be early next year.
Pearson chairman Sidney Taurel is under pressure from some of the publishing group’s largest shareholders over the size of the pay package he agreed with new CEO Andy Bird. Three top 20 shareholders — including some who voted for Mr Bird — told our correspondents that Mr Taurel’s handling of the succession process to long-serving boss John Fallon was unfinished business.
Transport operator National Express has named former FedEx executive Jose Ignacio Garat as its new chief executive. Former CEO Dean Finch left for housebuilder Persimmon.
Beyond the Square Mile
EU regulators are drawing up a “hit list” of up to 20 large internet companies, likely to include Silicon Valley giants such as Facebook and Apple, that will be subject to new and far more stringent rules aimed at curbing their market power. Under the plans, large platforms that find themselves on the list will have to comply with tougher regulation than smaller competitors, according to people familiar with the discussions. New rules include forcing companies to share data with rivals and an obligation to be more transparent on how they gather information.
Companies are rewriting bonus plans, switching performance metrics and ignoring missed targets so that executives do not suffer a big drop in pay as a result of the Covid-19 crisis. While many executives are set to swallow big reductions in their bonuses after earnings and share prices have tumbled this year, a growing number of boards are taking action, according to investor groups and compensation analysts. Changes have included adding non-financial metrics to bonus qualifications and excluding months of poor profits during the worst of the pandemic, moves that are likely to be controversial with shareholder groups in the coming months.
One in 10 new cars sold across Europe this year will be electric or plug-in hybrid, according to projections from green policy group Transport & Environment, triple last year’s sales levels after carmakers rolled out new models to meet EU emissions rules. The market share of mostly electric cars will rise to 15 per cent next year, the group forecasts, as carmakers across the continent race to cut their CO2 levels. “Electric car sales are booming thanks to EU emissions standards,” said T&E clean vehicle director Julia Poliscanova. “Next year, one in every seven cars sold in Europe will be a plug-in.”
Essential comment before you go
If 2020 has been the year when Sino-American tensions escalated to resemble the 1980s stand-off between the US and the USSR, it has also been the year when Beijing — after 20 years of baby-step financial liberalisation — finally threw open its doors to Wall Street.
Watching Boris Johnson’s conference speech last week was a reminder that the pandemic has stolen a basic ingredient from politics, as well as ordinary working life: humour. A punchline has a lot more punch when heard by lots of people at once. Isolated pockets of online fun are no match for the way jokes hurtle around an office full of people.
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