British Airways' Alex Cruz takes the fall

When Willie Walsh became British Airways CEO some 15 years ago, his mandate was to drag the flag carrier into the 21st century. He did succeed in redirecting the ailing airline towards an ability to compete in the new world where LCCs occupied an ever increasing market share in Europe.

The cost-heavy airline had been staring down the barrel of inevitable decline if the changes were not made. His work was constantly dogged by the behaviour of unions and, often, politicians who continue to treat the company as if it were still a government department.

Luis Gallego took over from Mr Walsh as CEO of IAG only in Sep-2020. One of his first moves has been to replace Alex Cruz as CEO of British Airways with Aer Lingus boss Sean Doyle.

Mr Cruz, promoted by Mr Walsh from running IAG's LCC Vueling to leading BA in 2016, presided over the UK national flag carrier's most profitable years in history. But it was not all plain cruising. His cost focus and a number of unforced errors under his watch (IT glitches, customer data breaches, a pilot strike and cabin crew dissatisfaction although several of these were due to longstanding inherited issues), arguably weakened the BA brand and industrial relations.

Financial performance at BA has now plummeted to its worst ever, due to the COVID-19 crisis. This is true of every airline, but BA is heavily exposed to two key markets particularly hard hit by the crisis: the premium segment and the North Atlantic. Rebuilding will need a sensitive approach that restores employee and customer confidence.

The new face at the top of BA, Mr Doyle actually served 20 years at the airline before his two years leading Aer Lingus. It is to be hoped that he enjoys a challenge. Further extensive surgery at BA is not just desirable, it is inevitable.

Summary:

• Under Mr Cruz, 2016-2019 were BA's most profitable years ever, but with impacts on brand and industrial relations
• Financial performance is now the worst ever, due to the COVID-19 crisis.
• BA is heavily exposed to two key markets hammered by the crisis: the premium segment and the North Atlantic.
• Sean Doyle is a new face at the top of BA; he had 20 years at the airline before his two years leading Aer Lingus.
• British Airways still has a mountain to climb - and much more cost cutting if it is to survive.

View more here: https://centreforaviation.com/analysis/reports/british-airways-alex-cruz-takes-the-fall-540498