BUSINESS NEWS
Walsh to hand over IAG reins to Gallego in June
Ian Taylor
Willie Walsh will step down as chief executive of International Airlines Group (IAG) and retire in June aſter 15 years running British Airways or its parent company. He will be replaced by Luis
Gallego, chief executive and chairman of group airline Iberia. The announcement last week
was unexpected, but Walsh revealed his intention to stand down in November when he said he would depart before October 2021 when he will be 60. Walsh admitted “I still love what I do”, but he told analysts: “My intention is to be retired within the next two years.” IAG chairman Antonio Vazquez
hailed Walsh’s “strong leadership and clear vision” and said: “Willie has been the main driver of IAG. He led the merger and successful integration of BA and Iberia to form IAG, and under his leadership, IAG has become one of the leading global airline groups.” Of Gallego, Vazquez said: “He has led a profound transformation of the airline.”
IAG and the group’s carriers. Alex Cruz, former head of
Barcelona-based Vueling, runs BA. IAG chairman Vazquez is a former chief executive and chairman of Iberia. Javier Sánchez-Prieto is chairman and chief executive of Vueling and the new Iberia chief is likely to be a Spanish speaker appointed from within the group. The only non-Spaniard running a group airline is Sean Doyle, the former BA network director who took over at Aer Lingus this month. IAG is listed on the Madrid stock
Gallego began his career at
Spanish regional carrier and Iberia franchise partner Air Nostrum in 1997. He was at IAG-owned Vueling before becoming chief executive of Iberia subsidiary Iberia Express in 2012 and took over at Iberia in 2013. Gallego joined IAG’s management board in 2014, when Iberia turned a profit for the first time in seven years. The move will see Spaniards in all but one of the top positions at
exchange as well as in London. The issue is important as Walsh’s successor must contend with Brexit and compliance with EU rules that carriers be 50% EU-owned and controlled. Walsh has repeatedly dismissed
concerns about compliance with the rules, at one point suggesting IAG would do by “magic”. IAG’s strategy appears to be to
emphasise that its individual airlines are domestically owned. But a senior EU official warned
last January: “For IAG, I can’t see how it can be a solution.”
Walsh’s cv
ZWillie Walsh joined Aer Lingus as a trainee pilot in 1979. He flew B737s and became a captain, then took a business degree and joined management in 1989.
ZHe became chief operating officer in 2000 and chief executive in 2001, with Aer Lingus in financial trouble.
ZWalsh slashed thousands of jobs in a wholesale restructuring, acquiring the nickname Slasher Walsh. But Aer Lingus turned a profit in 2004.
Z In 2005, he took over at BA.
ZHe established a transatlantic joint venture with American Airlines and Iberia in 2008.
Z The £5bn merger of BA and Iberia was announced in 2010 and IAG set up in 2011, with Walsh at its head.
Z IAG acquired Vueling in 2013 and Aer Lingus in 2015, and Walsh set up low-cost European subsidiary Level in 2017.
ZWalsh negotiated a €1 billion deal to buy Air Europa in 2019.
COMMENT: WALSH FLIES OFF WITH AN IMPRESSIVE RECORD
BA and IAG made record profits under Walsh’s leadership, only reporting losses in two of the last 10 years – a remarkable record for a full-service carrier in the aftermath of the financial crisis and recession. IAG reported a post-tax
profit of €2.9 billion for the last full financial year and the group has spent €4.1 billion on shareholder
dividends and share buy-backs since 2015. The group was Walsh’s creation and has been an undoubted success, as has the transatlantic joint venture he forged with American Airlines and Iberia in 2008. On the downside there has been a decline in BA’s
reputation. One reason has been a succession of labour disputes, including a near
two-year series of strikes by BA cabin crew between 2009 and 2011, and a first strike by BA pilots, last September. There also appears to have been a
failure to invest adequately, which may explain the succession of IT problems BA has suffered. It certainly explains the age of BA’s
fleet, with almost half its aircraft more than 15 years old. BA’s fleet of Boeing 747s will not be phased out
until mid-decade, to be replaced by 18 B777s, ordered in 2018. In 2010, during the ash cloud
crisis, Walsh did much to persuade the CAA to relax a flights ban, deeming it “a gross overreaction”. In 2008, the same strong will saw him insist BA move into Heathrow’s not- ready Terminal 5 on time, resulting in the cancellation of 500 flights.
Ian Taylor, executive editor
travelweekly.co.uk
16 JANUARY 2020
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