British Airways replaces boss amid industry’s ‘worst crisis’


Álex Cruz, the chief executive of BA, is to step down with immediate effect.


daniel leal-olivas/Agence France-Presse/Getty Images

Álex Cruz will step down as the chief executive of British Airways with immediate effect, as the airline navigates the “worst crisis” facing the industry.

BA owner International Consolidated Group
IAG,
-1.64%
announced the change on Monday as part of a wider shake-up of management positions.

Sean Doyle, the chief executive of Irish carrier Aer Lingus,
which is also owned by IAG, will take over from Cruz.

“We’re navigating the worst crisis faced in our industry and I’m confident these internal promotions will ensure IAG is well placed to emerge in a strong position,” said IAG Chief Executive Luis Gallego.

Gallego, who took over as head of IAG in September, replacing longstanding boss Willie Walsh, thanked Cruz for working “tirelessly” to modernize the airline and leading it through a “particularly demanding period.”

Doyle takes over at an unprecedented time for airlines, which are struggling to cope amid a collapse in demand for travel amid the pandemic.

Read: EasyJet pleads for government help as it reports first loss in its 25-year history

BA has taken a number of measures to reduce costs, including axing 13,000 jobs and retiring its entire fleet of all of its iconic Boeing 747s. It has also auctioned off artwork to ease its coronavirus cash crunch.

In September, IAG raised €2.74 billion to shore up its balance sheet and withstand a prolonged slump in air travel. At the time, the group said it was planning to cut capacity for 2020 by 63% compared with a previous estimate of 59%. Capacity in the fourth quarter is expected to be down by 60% from 2019 — a much steeper decline than its previous scenario of a 46% drop.

For next year, it is expected to decline 27%, compared with 2019 and it doesn’t think demand will recover until 2023 at the earliest.

Read: Come back, Americans: Urgent calls for U.S.-U.K. air bridge with airlines hit by fresh lockdown fears

Last week, the U.K. government unveiled a Global Travel Taskforce to look at how a testing regime for international arrivals could be implemented to boost safe travel to and from the U.K.

Russ Mould, investment director at AJ Bell, said that BA, which has historically relied on business travelers for a large part of its revenue, now faces the prospect of significantly reduced demand from this customer base as video conferencing has become second nature to people at work.

“Doyle will either have to dramatically drop British Airways’ prices to lure these business travelers back or find a new way to keep its planes full in the sky once the health crisis dies down and economic prospects improve,” Mould said.

Cruz, who became BA’s chairman and chief executive in April 2016, was at the helm of the airline when it was fined $230 million in 2019 for a data breach after the airline’s website and mobile app were hacked. He was also in charge when an IT failure at the airline in 2017 left thousands of passengers stranded.

Cruz will remain the airline’s nonexecutive chairman.

As part of the management changes announced on Monday, IAG said Fernando Candela, the head of its airline Level, would take on the new role of group chief transformation officer.



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