Virus-blighted British Airways announces shock CEO departure
British Airways, which sheds thousands of jobs as coronavirus decimates demand for air travel, announced Monday that CEO Alex Cruz is stepping down "with immediate effect," but gave no reason for his unexpected departure.
Parents group IAG added in a statement that the Spanish businessman, who had been BA managing director for four and a half years, will be replaced by his Aer Lingus boss Sean Doyle.
IAG's new managing director, Luis Gallego, a Spaniard who took the reins from Willie Walsh just last month, said the management change at the company aims to come out of the health crisis stronger than before.
"We are in the worst crisis in our industry and I am confident that the IAG is well positioned to take a strong position," said Gallego.
"I would like to thank Alex for everything he has done at British Airways. He has worked tirelessly to modernize the airline. He has led the airline through a particularly demanding period and has made restructuring agreements with the vast majority of its employees."
- 'New pair of wings' -
Investors worried about the news, sending IAG shares up two percent to 101.45 pence late Monday morning.
Given the global travel crisis, the stock has fallen an astonishing 75 percent since the start of the year. This makes it the worst performance in the London FTSE 100 index.
"British Airways will need a new pair of wings to fly through the pandemic in one piece. The airline is now given new leadership in the form of Sean Doyle," said Susannah Streeter, an analyst at Hargreaves Lansdown.
A company spokeswoman declined to comment on the nature of the departure of Cruz, who oversaw a massive cost reduction and will remain non-executive chairman.
British Airways is in the process of shedding 13,000 jobs, or about a third of its workforce, in response to the Covid-19 pandemic and is currently operating about a quarter of its normal flight schedule.
BA pilots voted in July to accept a package of job and wage cuts to avoid even more layoffs.
The British pilots union BALPA welcomed the news on Monday.
- 'Departure hall' -
“Mr. Cruz has been in the departure lounge for a while, so this is no surprise. He was given the job of cutting costs and found it impossible to do it without alienating BA passengers and staff alike, "said BALPA General Secretary Brian Strutton.
"Willie Walsh left too, BA broke up with its COO earlier this year and now that the CEO has gone I hope this ushers in a new dawn where BA is acting like the proud airline that it is should."
Meanwhile, Cruz did not comment on his shock outcome.
However, last month he defended the airline's severe downsizing, arguing that customers were "still afraid to travel".
"Covid has destroyed our business, our sector. We are still fighting for our own survival," he told Parliament's Transport Select Committee.
The IAG has forecast that it will take at least 2023 for passenger demand to recover to pre-pandemic levels.
"As CEO of British Airways I have to take responsibility. I can't ignore the situation. I had to act incredibly quickly," said Cruz during his parliamentary barbecue on September 16.
"I deeply regret that too many of my loyal and hardworking colleagues have left our store and I understand why MPs are concerned ... This is an impossible situation."
rfj / rl
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