13 JANUARY 2020


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Article from BTNews 13 JANUARY 2020

COMMENT: Walsh and the BA brand

British Airways’ parent company International Airlines Group (IAG) is to have a new chief executive following the not-unexpected statement Willie Walsh is to retire. It is still a bit of a surprise – Walsh had hinted several times he was ready to depart, but failed to make the jump.

Two vital questions from the Willie Walsh tenure? Would British Airways have been a stronger airline without the controversial Iberia tie-up and drain on resources? And would Iberia have survived without BA and perhaps gone the way of Sabena? It is perhaps forgotten Swissair was saved only by Swiss guile.  Would Iberia have done an Alitalia? (see in this issue).

With a replacement lined up, Walsh is to go quickly at the end of March. The timing is strange. IAG is in the throes of the proposed takeover of Air Europa, subject to the approval of the EU competition authorities. And Walsh is only 58, a very young age at which to pull out.

Often considered arrogant, and far from universally popular, Walsh originally joined British Airways as CEO in 2005, out of work having been relieved of his similar duties at Aer Lingus. His reign has been not without upheaval.

Along with a reputation for arrogance, Walsh was seen as a prickly figure and often controversial. Asked at a press conference a simple question by BTN he looked away as he made his retort. This was noted by others.

His influence however is not in doubt, as evidenced by the acres of newsprint devoted to the announcement of his impending departure from IAG. His legacy is not so straightforward – last week’s coverage fluctuating wildly from the reverent to the downright hostile.

This was best illustrated on Wikipedia, where the Walsh biography was briefly hacked and highly unflattering descriptions inserted, ending with the words: “He is leaving though … Hallelujah”. This was swiftly taken down, but not before being noticed – and BTN has the screenshots to prove it was there.

The Bloomberg media group described Walsh as an “empire builder but not everybody’s favourite pilot”, noting the IAG boss was “well-liked by investors for his discipline on costs, earnings and M&A. Customers, employees and suppliers are a different story”.

Bloomberg said the announcement of Walsh’s retirement would not be mourned by all. “His outspokenness and focus on the bottom line didn’t always endear him to customers, employees or suppliers,” Bloomberg recalled, adding that the nickname “Slasher Walsh” had stuck with him since his days running Aer Lingus, “when he cut thousands of jobs and sold the company art collection”.

On the other hand, the travel industry newsletter Skift used the headline ‘Legendary airline CEO jets off to retirement’, over its story, saying Walsh had “remade European aviation”.

Pay your money, take your choice… in BTN’s view, Walsh certainly had his strong points but his friends were few. No walking down the cabin and shaking hands with customers. What is surprising is that the IAG reins are being handed over to Luis Gallego, boss of Iberia, much smaller than British Airways. Where this leaves the present BA president and chief executive, Alex Cruz, remains to be seen. Gallego worked for Cruz at Vueling prior to that airline becoming part of IAG.

Cruz replaced Keith Williams, the previous head of BA, who resigned and is now reviewing the UK rail scene, a government appointment.

Walsh’s policy was to keep the City happy and this showed with an elderly long-haul fleet subject to much criticism. Only in very recent years have fuel-efficient Boeing B787s and Airbus A350s replaced the popular jumbos. There have been serious IT problems, with lack of investment often suggested as the cause. A dearth of inflight wi-fi put some business travellers off using the airline.

The scheme to take head-on the low-cost operators in Europe with a near-identical package has not gone down well – interestingly, BA Cityflyer, based at London City Airport, still offers a courtesy service in the Economy cabin.

BA has suffered criticism but in spite of everything the brand has stayed strong despite extremely strong competition from the major airlines of the Middle East. Walsh will stand down from the CEO role and from the board of IAG on 26 March this year and will retire on 30 June.

One thing seems certain. He will not be missed.

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OUR READERS' FINEST WORDS (All times and dates are GMT)

All comments are filtered to exclude any excesses but the Editor does not have to agree with what is being said. 100 words maximum

Tony Salmon, London

No thoughts on where he might go . Have heard Boeing Chairman is a possibility.

Jim Kirby, Mitcham

Above David Finn says your piece is petulant and puerile, I agree. He didn\\\\'t sell the \\\\'airline\\\\'s art collection\\\\'. 4 paintings in the executive dining room by Jack Yeats were sold and recouped about 1/4 Million Euro. It was a sensible decision at the time and was part of an exercise in ridding unnecessary items that had value better suited funding the airline with major losses at that time. At Waterside he was pleasant to staff who passed him in the office always greeting them and he ate in the staff restaurant when he could. Methinks a little less sensitivity at press conferences might help. Ever been at an O\\\\'Leary one? The unions didn\\\\'t like him but talk to the staff in general and you might get a different opinion.

andreas w. schulz, Hamburg

Especially the coming close relationship between Cruz and Gallego will be interesting. BA\'s once famous claim " To Fly To Serve" needs a refreshment - let\'s see if the even stronger Mediterranean touch will help...

David Finn, Dublin.

I'm not Walsh's biggest fan either, but the tone of this piece is petulant and somewhat puerile to be honest.

Simon Jones, London

Willie Walsh speedy departure at the age of 58 is a classic case of ‘what if’. Should have Rod Eddington appointed the former boss of a small overseas airline or gone for a Brit with real major carrier experience? We shall never know. And yes I agree the brand is still strong but the future is worrying.