British Airways throws Alex Cruz under a bus (again) in a Sunday Times interview

There is a fascinating interview in The Sunday Times today with Sean Doyle, Chairman and CEO of British Airways.

We can’t show you it because it is behind a paywall (the link is here). To put it simply, all of the problems at British Airways have been dumped on ex-CEO Alex Cruz, who left the airline in October 2020.

This is, I think, very disingenuous. The lead time to get anything done in aviation is measured in years, not months.

This isn’t the first time that it has happened. I wrote a similar piece to this one back in May 2021 after an article in the Mail On Sunday.

It is not true that Sean Doyle is the architect of all of the changes that are now coming through. Whilst HfP was far from being Alex Cruz’s biggest cheerleader, I personally liked him and in many ways he was simply a puppet for Willie Walsh, then Chief Executive of BA’s parent company IAG.

(Before someone points this out in the comments, I should admit that HfP did well from its critical coverage of Cruz’s early cost cutting. It got us our only mention in The Economist and drove our hat-trick of wins in the 2017 Business Travel Journalism Awards, including Editor of the Year.)

Alex Cruz was appointed to run British Airways because he was an expert at cutting costs. He founded Clickair, a low cost Spanish airline which was acquired by Vueling. Cruz was made CEO of Vueling as part of the merger because of his experience of running a low cost operation.

He was moved to British Airways to bring the same mentality to the UK carrier. He shared the mindset of Willie Walsh, the previous BA CEO who became CEO of BA’s parent IAG and to whom Cruz reported. Willie’s nickname was, of course, ‘Slasher’ Walsh because of his approach to cost reduction.

Whilst – to be clear – these words do not come as direct quotes from Doyle, the article today gives him implied credit for:

• the new Ozwald Boateng uniforms, commissioned by Alex Cruz in 2018

• the new Boeing 777-9X fleet, ordered by Alex Cruz in 2019 (and now delayed until at least 2026)

• the Boeing 787 and Airbus A350 fleets, which (for the latter at least) were mainly delivered under Alex Cruz and were actually ordered whilst Willie Walsh was CEO of British Airways

There is no mention of three highly positive initiatives signed off by Cruz:

• the introduction of Club Suite, which briefly made British Airways the only European carrier with ‘closing door’ suites in business class

• the signing of a catering contract with Do&Co at Heathrow, the best regarded airline catering group in the world

• the construction of the First Wing at Heathrow Terminal 5

Cruz IS blamed directly in The Sunday Times for leaving British Airways with ‘too many ageing jets’. This makes little sense, given that Cruz was in charge when the 777-9X fleet was ordered. In any event, the life cycle of any aircraft order – which can take 10 years from initial specification to final delivery – will always cut across multiple CEOs.

Doyle is given credit for persuading IAG to invest in a new British Airways IT system. However, the fact that this investment was not approved immediately after the huge BA IT outage of 2017 – it has taken FIVE YEARS from that crash to get IAG to release funds for an upgrade – makes it clear where the blame should sit.

Where Alex Cruz went wrong, arguably, was linking his reputation too closely to cost cutting. The airline was putting out regular staff announcements on what had been cut from the in-flight and airport product. Cruz was telling staff that cost cutting should be in their DNA, and that any day when budgets were not reduced was a day wasted.

In reality, Cruz’s plan was more complex:

• invest in the premium product (Club Suite, First Wing, Do&Co catering) – not to the level that would give a Middle East carrier any sleepless nights, but certainly better than European rivals Air France KLM and Lufthansa

• cut costs in short-haul to compete with Ryanair, easyJet, Wizz Air etc – something which was done relatively successfully. BA has retained a more civilised level of service than those carriers and arguably has a better short haul business class product than any of its major European competitors. Long haul Economy cabins were reduced in size – it is low margin business the airline was happy to lose.

The British Airways premium passenger experience can be pretty good

If anything, British Airways has failed to control the narrative about what it offers. Perhaps this was the Alex Cruz problem – associating the airline with a cost cutting mentality which didn’t always filter through to the customer proposition.

After all, anyone who ever visited both the British Airways and easyJet head offices would be left in no doubt that one of them was clearly carrying excessive overhead. Shai Weiss, CEO of Virgin Atlantic, told me recently that it took the pandemic to shake out the fat that had built up in his business, and it is now a far leaner operation.

Take my typical short haul flight as a Gold card holder. I can be dropped off outside the First Wing part of Terminal 5. With no checked luggage, I am at security literally within 60 seconds of getting out of the taxi. I am in the lounge 30 seconds after clearing security. However little I pay for my flight, I can eat and drink happily in the lounge for an hour or so.

If I fly Club Europe, I get an empty middle seat. I get (as a Gold) usually Row 1 due to the Gold block in place (or if I’m in Economy I get a blocked seat next to me unless the flight is full). The Club Europe food is pretty good these days and far better than anything Air France KLM or Lufthansa Group can deliver.

British Airways is, in many ways, a good airline. It could certainly do some things better (IT being the key problem) but the reality on a good day is far better than the perception. The impact of the Alex Cruz era may look better in 20 years time.

PS. The A380 is to get Club Suite, apparently

One interesting titbit from the article is confimation that the A380 fleet will receive Club Suite as well as the new First Class product.

There is no timeline for this. However, we know that the Boeing 787 fleet will be next. This work has also been delayed – when we last wrote about this we said that it would be started in late 2023 but we understand that it has now slipped into 2024.

Assuming that only one fleet can be upgraded at a time, we probably won’t be seeing a new-look A380 fleet until 2025.

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