BA announces shock CEO departure
Aer Lingus boss to replace Spaniard
British Airways, which is slashing thousands of jobs as coronavirus decimates demand for air travel, announced yesterday that CEO Alex Cruz “is stepping down with immediate effect” but gave no reason for his unexpected departure.
Parent International Consolidated Airlines Group SA (IAG) added in a statement that the Spanish businessman, who had been BA chief executive for four and half years, would be replaced by its Aer Lingus boss Sean Doyle.
New IAG chief executive Luis Gallego, a fellow Spaniard who took the reins from Willie Walsh just last month, said the company’s management reshuffle was aimed at emerging stronger from the health crisis.
“We’re navigating the worst crisis faced in our industry and I’m confident ... IAG is well placed to emerge in a strong position,” he said. “I want to thank Alex for all that he has done at British Airways. He worked tirelessly to modernise the airline. He has led the airline through a particularly demanding period and has secured restructuring agreements with the vast majority of employees.”
Investors fretted over the news, sending IAG shares down 2% to 101.45 pence in late morning deals.
The stock has plummeted by a staggering 75% since the start of the year — making it the worst performer listed on London’s FTSE 100 index.
“British Airways is going to need a new pair of wings if it is to fly through the pandemic in one piece. The airline is now getting new leadership in the form of Sean Doyle,” said Hargreaves Lansdown analyst Susannah Streeter.
A company spokeswoman declined to comment on the nature of the departure of Cruz, who has overseen a massive cost-slashing drive and will remain non-executive chairman.
British Airways is in the process of axing 13,000 jobs or about one third of its workforce in response to the Covid-19 pandemic, and is currently operating about one quarter of its normal schedule.
BA pilots had voted in July to accept a package including job and pay cuts aimed at avoiding even more redundancies.
British pilots’ union BALPA welcomed the news.
“Mr Cruz has been in the departure lounge for some time so this is no surprise. He was given a remit to cut costs and found it impossible to do that without alienating BA passengers and employees alike,” said general secretary Brian Strutton.
“Willie Walsh has also gone, BA parted company with its COO earlier this year, and now with the CEO leaving I hope this heralds a new dawn which sees BA behaving like the proud flag carrier airline it should be.”
Cruz meanwhile gave no comment regarding his shock exit.
Speaking last month however, he defended the airline’s heavy job cuts and argued that customers were “still afraid of travelling”.
“Covid has devastated our business, our sector. We’re still fighting for our own survival,” he told parliament’s transport select committee.
IAG has forecast that it will take until at least 2023 for passenger demand to recover to pre-pandemic levels.