New BA boss faces crisis he may struggle to contain

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Alex Cruz, a provocateur, had a frank message for British MPs during his last public appearance as managing director of British Airways: the coronavirus has definitely left its mark on the industry and his airline had to change to survive.

The change came less than a month later, but it was Mr Cruz who was swept up in a landmark reshuffle by Luis Gallego, a fellow Spanish man and new CEO of BA’s parent company, IAG.

Asserting his authority over an airline conglomerate that was dominated for years by his predecessor Willie Walsh, Mr. Gallego turned to Aer Lingus boss Sean Doyle to guide BA through the next phase of the crisis.

In doing so, he raised a well-respected insider who spent 20 years in leadership roles at the British Standard Bearer before taking the lead post in Dublin early last year.

Yet the reshuffle comes just as hopes the industry could weather the worst of the pandemic have been stifled by the resurgence of coronavirus cases around the world.

“We are going through the worst crisis in our industry,” said Mr. Gallego, announcing the changes.

Airlines are unlikely to recover until 2024 at the earliest, and IAG reported a loss for the three months ending late June of more than € 2 billion after its passenger business collapsed.

BA has been poorly exposed due to its reliance on business travel, a part of the market that has been almost completely gutted. As the largest long-haul carrier over the North Atlantic, the airline’s business model has been shaken by the near-closure of the transatlantic market.

Still, the appointment of Mr Doyle, 49, from Cork, introduced someone who could build relationships with the company’s staff and customers, like Mr Cruz, known for his cost cuts, was took of.

A former senior BA colleague said Mr. Doyle will change the tone of the company because he is a “fantastic people manager”.

“He will make the decisions that need to be made, but can bring people with him. There really aren’t that many people with the depth and breadth of business experience, ”he added.

Mr Doyle was virtually unheard of in Irish aviation when he returned to his homeland in January 2019 to take command of Aer Lingus, the former common carrier which has been part of IAG since 2015.

BA was seriously injured by his addiction to business travel © AFP via Getty Images

A senior industry official said: “When Sean was announced as the new CEO of Aer Lingus, I would say everyone in aviation in Ireland said ‘Sean who?’”

Less than two years later, the Cork-native executive followed in Mr Walsh’s footsteps, who ran Aer Lingus before taking over as BA in 2005.

But moderate Mr. Doyle couldn’t be more different from Frankish Mr. Walsh, already a national figure in Ireland when he left for London, and other Irish aviation chief and showman Michael O’Leary from Ryanair.

Unlike his compatriots, his discreet personality offers little public visibility in Ireland or elsewhere.

Yet he is nonetheless energetic. When the coronavirus hit hard this year, it was in the foreground as airlines pushed for concessions from the Irish government after the lockdown.

Shane Ross, former Irish transport minister, said he spoke to Mr Doyle when an industry task force was set up to develop a recovery plan for the sector. “It was a difficult conversation,” Ross told the Financial Times.

“He was very demanding in the interests of the aviation industry when I asked him to join the task force and left no doubt that they felt the government did not fully appreciate the threat. which weighs on the aeronautics industry. “

Aggressive cost reduction under Mr. Cruz's had improved BA's margins

But the future of the airline is largely out of Mr Doyle’s control, as airlines around the world face an existential threat from collapsing passenger numbers.

For the soft-spoken Mr Cruz, the coronavirus crisis had to be done with him as he drew heavy criticism for taking an ax from 10,000 airline staff, about a quarter of the workforce. work, and have reduced flight schedules.

His controversial threat to “fire and rehire” thousands of low-paid workers, a plan that was later scrapped following negotiations with unions, also angered unions and politicians.

The storm of negative publicity led BA to be called a ‘national disgrace’ by a group of UK MPs for the treatment of its staff, the culmination of a stormy four and a half years under Mr Cruz’s leadership.

Alex Cruz has been heavily criticized for slashing nearly a quarter of BA’s workforce © POOL / AFP via Getty Images

The Unite union said Cruz’s handling of the crisis had been “needlessly confrontational and at times heartless”.

“We hope that the new CEO will begin a new chapter in constructive relations with staff and unions, repair the reputation of the airline and boost staff morale,” said Unite Assistant General Secretary Howard Beckett.

Two former senior IAG executives said they weren’t surprised by the reshuffle, noting that Mr. Gallego had worked under Mr. Cruz when they were at low-cost airline Vueling, which is also part of the IAG airline team.

“I also didn’t really expect to be comfortable with Alex reporting on Luis,” said one of the managers.

Still, some have seen the hand of Willie Walsh, who created IAG during the 2011 merger of Spanish Iberia and BA, in some of Mr. Cruz’s decision-making processes.

“It’s not Alex Cruz’s fault that he was put to the job in the first place,” said an aviation figure who has known Mr. Cruz for more than a decade.

“It’s clear that at first he got on Willie’s bad side and lost Willie’s trust. But Willie gave him the job.

In contrast, he expected Mr. Doyle to focus rigorously on the details and analysis of the position.

“If you were to ask Sean if BA should start flying in Cincinnati, he would be able to tell you everything about the Cincinnati market, who currently flies there, and what all the frequencies are. Unlike Alex, Sean is not interested in playing in the political realm of corporate public relations, ”he said.

Even before the pandemic, however, Mr. Cruz struggled as he moved from crisis to crisis. Just a year after taking the post of director of BA in 2016, he was hit by a series of computer crashes that have blocked hundreds of flights and stranded thousands of passengers.

Then in 2018 a data breach led to a record fine of £ 183million, while last year he faced the company’s first pilots strike in its history.

Passengers also complained about service cuts, including the removal of free economy class meals, although Mr Cruz received little credit for organizing a £ 6.5 billion investment program sterling including major improvements to its business class products.

For Doyle, there is unlikely to be a honeymoon with customers, despite hopes that a globally coordinated approach to airport testing can help re-energize passenger demand.

Indeed, Mr Cruz struggled to find optimism that the pandemic could be a temporary shock as he issued terrible warnings when he testified to British MPs in September.

BA only carried 187,000 passengers to and from the UK in the first week of September, up from just under a million the same week last year, Mr Cruz said.

“I want BA to be a successful company,” he added, but the battle for the airline’s survival is now beyond his control. With the huge events unfolding, this may also be beyond Mr. Doyle’s control.

Additional reporting by Peggy Hollinger and Siobhan Riding in London

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