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Willie Walsh quits as IAG CEO and BA CEO Alex Cruz is passed over for the job

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In a Stock Market announcement this morning, Willie Walsh announced that he is standing down as Chief Executive of IAG, the British Airways parent company, on 26th March.

His formal retirement date has been set for 30th June.

He will NOT be replaced by Alex Cruz, Chairman and Chief Executive of British Airways.  This is unusual as BA is, by far, the dominant business unit inside IAG.

Instead, Walsh will be replaced by Luis Gallego who is currently CEO of Iberia.

IAG

Gallego was previously at Air Nostrum, Clickair and Vueling.  His first CEO role was in 2012 at Iberia Express, and he took over at the broader Iberia group in 2013 where he reversed six consecutive years of operating losses.

Iberia has seen an amazing turnaround since being ‘acquired’ in the ‘merger’ that created IAG.  It has invested in a new long haul fleet, with better business class seating than Club World, and added new routes.  Sales and profits have grown sharply whilst staff numbers have been slashed as a more ‘commercial’ approach was taken.

There are two ways of looking at this decision, I think.

The first is that the work at Iberia is ‘done’, with the transformation complete, and it makes more sense to leave Alex in place to complete the job at BA.  The problem here is that the work at BA is done.  The fleet upgrade orders are placed, the new Club Suite is unveiled, the wi-fi roll-out is almost complete, the catering upgrade is done ….. the next 2-3 years will be about implementation more than announcements, and that could be done just as well under a new leader.

The second view is that Cruz had lost some of Willie’s faith.  Back in October, Walsh publicly criticised the BA management team over its failure to stop the pilot strike.  The astonishing £183 million fine over the 2018 data breach – a figure which is likely to increase when the class action lawsuit by customers goes ahead – is also likely to have played a part.

It will be interesting to see if Cruz chooses to leave, as it often the case when the logical heir apparent is passed over.


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Comments (83)

  • bill says:

    i wonder where Mr Walsh is going to ?

  • marcw says:

    Iberia was NOT acquired by IAG.

    • Rob says:

      True. Will adjust. Teach me to write articles on an iPad in Pret.

      • Keep EAT! says:

        Ipad. Pret. Two bad items there straight away bound to cause mistakes!!

      • idrive says:

        Rob, get a cheap Bluetooth slim aluminum keyboard on Amazon and connect it to the Ipad.
        But first, please make sure you click on HFP link so to grant a small commission! 🙂

  • marcw says:

    I feel that Alex Cruz knows he hasn’t finished its job at BA. Still many things to do.

    As you describe, Gallego successfully turned around IB. But now it’s time for another one to lead the integration with Air Europa (if approved) and focuses on another aspects like customer service, quality, IT and growth.

    • Ian says:

      A cynic might unfortunately agree that he hasn’t yet finished the job at BA: he hasn’t yet quite destroyed what was once a fine airline.

      • marcw says:

        We can argue about many things. But BA is today way better than it was 10 years ago. Accesible (cheaper), more routes (how many NEW destinations have been launched under the leadership of Alex Cruz?) and frequencies, new planes and better product (Club Suite). Lounges are now under review plus a few other things going underway.

        • lebron 23 says:

          if taken in isolation, you are probably correct. however, what is actually relevant is BA compared to its competitiors 10 years ago compared to today. if you examine that metric, you will come up with a very different outcome.

          • marcw says:

            It’s not a world leading airline anymore – neither it’s the best airlines in the world. But should it be?

            Competition has changed dramatically over the last decade. Look at low-cost market share…

          • lebron 23 says:

            actually…I have thought further about this

            even in isolation ba is not better than 10 years ago… the.vast majority of the planes, the lounges and the Worldwide fleet hags are all 10 years older.

            🙂

          • marcw says:

            I guess for you @lebreo23 more destinations, more frequencies, better prices (accesible), First Wing, new planes (787, 350, 380, 320neo), club Suite, Do&Co… all in the last 10 years.

  • aston100 says:

    If I recall correctly, in The Godfather II, Fredo was passed over for the top job. It didn’t end well for him.

    • Cat says:

      😂🤣
      (although I think, technically, Fredo was passed over at the end of part I)

  • Juan says:

    Hello Rob,
    Another happy reader just pointing out that Iberia was not acquired by IAG. Thanks for your great work!

  • AlexT says:

    Good riddance… and let’s be frank – Gallego has achieved far more in his time at the helm of Iberia than Cruz at BA. Granted, BA bought IB at the height of the PIGS crisis, so business was far more likely to rebound, but still.

    Tally of achievements over the past couple of years:

    IB – renewed fleet, new hard product rolled out, new stunning lounge complex in MAD

    BA – some new planes, a couple of which has a new hard product LONG overdue, lounges getting more and more shabby with a few out stations upgraded

    • callum says:

      You can’t seriously think that’s a logical comparison?

      • AlexT says:

        Of course I can. The two airlines have taken markedly different approaches over the past decade even while operating under the same corporate umbrella. Granted, part of that has to do with BA’s monopolistic position at LHR…

        • callum says:

          They’ve taken “different approaches” because they’re completely different airlines which were at completely different junctions…

          Iberia needed to recover, BA was already doing fine and needed to maintain itself – which Cruz has done, increasing passenger numbers and increasing profit.

          There are very few other industries where customers take such strong stances on whether they like the CEO or not (despite knowing almost nothing about the business itself), or who even know who the CEO is – it’s incredibly bizarre.

          • AlexT says:

            IB didn’t need new lounges, fleet, and hard product to recover. It would have recovered just fine in parallel with the Spanish economy. Yet it pushed for the above modernization nonetheless, while BA mostly exploited its dominant position at LHR and the underling captive non-connecting direct flight market.

            But if your superior “knowledge of the business itself” suggests otherwise, please do tell…

          • Rob says:

            I doubt it, to be honest. You only need to look at the cull in staff numbers. From the Capital Markets presentation in November:

            “Since 2011 Iberia has reduced its average headcount by 19%, while increasing capacity by 14% over the same time period”

            That didn’t just happen by magic with an improving economy.

          • Callum says:

            I don’t know much about the business – the key difference between us is that I’m not pretending I do.

            I know that most of the BA changes people throw hissy fits about were logical from a business perspective. I know that despite the never-ending “this is it! BA have gone too far and will suffer” claims, it’s continually flying more passengers with a greater load and higher profit.

            In fact, the vast majority of criticism I see of BA day-to-day on this site applies equally to Iberia.

        • Catalan says:

          @AlexT. You’re greatly misinformed. BA did not buy Iberia. They merged to form IAG.
          I’m not sure when you last visited MAD. Though the lounge has recently been refurbished I wouldn’t exactly call it stunning. Flying back to London on an evening flight last month I found the food in that ‘stunning’ lounge to be dire.
          I think your enthusiasm to poor cold water on BA should be measured when attempting to ‘big-up’ IB.

          • Rob says:

            Not really. Legally, yes, that is what happened. In reality BA took over Iberia. It was political reasons which dressed it up as a merger and put the head office in Madrid (nominally) even though everything is done at Waterside.

          • AlexT says:

            In the years I’ve worked in finance, I’ve rarely seen the M part of M&A actually happen. More often than not, what is advertised as a merger is an acquisition by another name.

            Was in MAD last week, and the T4S lounge (Velasquez?) is light years ahead of BA’s lounge complex at LHR, through which I pass every other week – showers, rest pods, food. The catering at LRH is so bad, I tend to buy a Boots sandwich for the flight now instead of eating in the lounge. The First lounge is better, but that is really not comparing apples to apples… and the showers and toilers are worse… plus no rest pods.

          • Doug M says:

            But asymmetric mergers are often takeovers in disguise, and it’s not always the dominate partner or culture that ends up running things. If you want another example how about Boeing merging with McDonnell-Douglas. MD’s practices eroded Boeing’s engineering culture and that led to the Max and where they are now. Very simplified version.

    • Mark says:

      I’m a bit confused about the “stunning” IB lounge comments. I was in the lounge in MAD T4S a couple of times in Sep/Oct, once early morning and the second time early-mid afternoon.

      I thought the food selection was quite poor. Very limited hot breakfast options for example. Showers are larger than BA’s pods, but the second time we went in there was no hot water.

      The lounge itself was fine to spend a couple of hours in, and less busy than the lounges at LHR T5A get, but I’d hardly call it stunning.

      Maybe the lounges in the main T4 building are better?

      • Kenny says:

        Really bad. Was there on Mon, to board via S gates. Lounge in the middle of the duty free shop. Very bad selection of hot food. This was from LHR->Mad->Mexico City. Shower, liquor are good. But hot food … poor.

  • Riccatti says:

    Iberia is the airline with no customer service.

    I personally had situations when accommodations a line agent done were reversed and prohibitive notes in Spanish were inserted into bookings.

    On a last trip, I was first to board the plane and pointed to cabin crew to stop chatting and better focus on how to let the whole jet bridge of passengers to start boarding. The “nice” cabin manager went red faced and literally told me to “shut up”, in Spanish of course. We need more of those welcoming crews on board at BA.

  • Rooster says:

    OT: this comments section is like Groundhog Day everyday, I can never find a previous comment. Yes Rob may bash disqus but it’s better than standard Wordpress comments.

    • Peter K says:

      Don’t you use the search function to find a key word?
      I did that yesterday. It took a little while but I found what I wanted.

    • Rob says:

      No it’s not, that’s why most sites that try it, ditch it.

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