Alex Cruz steps down as BA chief in wake of Covid job cuts row
Alex Cruz has stepped down as chief executive of British Airways in the wake of heavy criticism of the handling of 12,000 job cuts at the airline.
Cruz will be replaced by Sean Doyle, the chief executive of Aer Lingus. Doyle will also take over Cruz’s role as non-executive chairman of BA after a transition period. Both carriers are part of airline group IAG.
Last month, Cruz was forced to defend the airline’s job cuts strategy, dubbed “fire and rehire” by unions which said it was a plan to push the 30,000 employees who still have jobs on to downgraded terms and conditions. Speaking to a committee of MPs, which called British Airways a “national disgrace”, Cruz said the airline was in a “fight for survival” and that he regretted “that way too many loyal and hardworking colleagues are having to leave the business”.
IAG has promoted Donal Moriarty, the Aer Lingus chief corporate affairs officer, to the role of the Irish airline’s interim chief executive while a permanent replacement is found.
“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 Luis Gallego, the IAG chief executive.
“Cruz has led the airline through a particularly demanding period and has secured restructuring agreements with the vast majority of employees. As our new team comes together we remain focused on making the right operational and strategic decisions for the long-term benefit of all IAG’s shareholders.”
Cruz, who was appointed chairman and chief executive of British Airways in 2016, was paid £805,000 in salary, benefits and pension last year.
Gallego has moved swiftly to make his mark at IAG, having been promoted to chief executive barely a month ago. He took over from Willie Walsh, who faced down a pay revolt among shareholders on his last day in charge after a 41-year career in aviation.
“BA had already severely cut its flight schedule, culled thousands of jobs and now Cruz is the latest to go as the company tries to cope with the crisis caused by the pandemic,” said Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown. “This is a sign that Gallego is flexing his muscles and trying to demonstrate that he’ll make the changes necessary to lead a sustained recovery for the airline group.”
In July, IAG reported a record loss of €3.2bn (£3.8bn) in the first half of the year as passenger numbers collapsed amid the coronavirus crisis. The record loss forced the group to make a €2.75bn rights issue to shore up its balance sheet and it has warned that it does not expect 2019 levels of passenger demand to return until 2023 or even 2024.
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