UK flag carrier British Airways, reeling like its peers from the pandemic’s impact on air travel, has axed a slew of flights and cut 10,000 jobs. On Monday it was the turn of Alex Cruz, the man whose command of the hot seat — as BA’s chief executive and chairman — made him responsible for the airline’s response to coronavirus.
His four-year tenure brought heavy criticism. Stakeholders of all stripes griped. Union discontent forced Mr Cruz to abandon controversial plans to “fire and re-hire” thousands of workers. Passengers, never a uniformly happy bunch at BA, ratcheted up complaints about deteriorating service. Investors pushed the market worth of parent International Airlines Group to under half that of Ryanair.
BA is the biggest revenue contributor to IAG, the listed entity that includes Spain’s Iberia and a clutch of other airlines. Last year BA made up comfortably more than half of sales at IAG and two-thirds of pre-exceptional operating profit.
IAG is not disclosing the financial terms under which the Spaniard will depart or those agreed with his successor, Sean Doyle, the boss of Aer Lingus. Mr Cruz, who will retain the role of non-executive chairman for a transition period, was paid £805,000 in salary and pension last year and took a 33 per cent Covid-19 pay cut.
One hopes Mr Doyle’s terms are more in keeping with our parsimonious times. The company has just tapped investors for €2.75bn to bolster its balance sheet after racking up a record first-half net loss of €3.8bn. The changes at the top show new IAG boss Luis Gallego putting his stamp on the group after taking over from Willie Walsh.
Conventionally, when a boss steps down after operational challenges, the replacement is supposed to take the business on to a new phase. That would be optimistic in the case of BA. The airline is losing money hand over fist. It cannot expect the unquestioning state bailouts continental flag carriers have been receiving. Even cheap fuel is of little benefit when planes are grounded. Air travel could take three to four years to get back to normal, if it ever does.
The world is now in retreat from globalisation for epidemiological as well as political reasons. Friends may wonder whether to congratulate Mr Doyle or commiserate with him.
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