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British Airways | CEO Alex Cruz leaves in the midst of a health crisis

(London) British airline group IAG, the parent company of British Airways, announced on Monday the resignation of the company's CEO Alex Cruz with "immediate effect" as the airline grapples amid the COVID crisis. 19.

Posted Oct 12, 2020 at 9:16 am

Véronique DUPONT
Agence France-Presse

He will be replaced by Aer Lingus CEO Sean Doyle, according to a statement. Mr. Cruz will remain Non-Executive Chairman of the Board for a transitional period of indefinite duration, and will then be replaced by Mr. Doyle.

IAG did not provide a precise reason for this departure, but CEO Luis Gallego, who has just taken over from historic boss Willie Walsh, recalls that the group is "going through one of the worst crises in its history." these "changes should help him emerge in a strong position."

"I want to thank Alex for all he has done at British Airways. He has worked tirelessly to modernize the company as it approaches its 100th anniversary. Since then, he has led the company through a particularly demanding period and has entered into restructuring deals with the majority of employees, "said Luis Gallego, CEO of IAG.

Mr. Cruz did not comment.

British Airways pilots' union Balpa confirms that he was not surprised by the departure of Mr. Cruz, who he said was already in the pipeline: “he was responsible for cutting costs and felt it was impossible to dispose of without passengers and employees”. [19659004] At a hearing in the House of Commons in mid-September, he defended the thousands of redundancies decided in the company, arguing that COVID-19 had "destroyed" the company and the industry.

Financial well

"We are fighting for our survival," he insisted, recalling that the company was experiencing losses twice as fast as during the financial crisis. In addition, IAG's stock has fallen the most since the beginning of the year among all components of the FTSE-100 index.

In the space of a few weeks, the pandemic has undermined global air traffic, ranging from containment, quarantines, fear of catching the virus in flight and the emergence of telecommuting.

During this hearing in the British Parliament, the British Airways boss had specified that 7,200 people had already left the company and that the total departures could be as little as 10,000 instead of the announced 13,000.

With the departure of Willie Walsh and Alex Cruz, Balpa "hopes for a new era in which British Airways will once again become the proud (UK national airline) company it was".

While profitable before the pandemic, the company struggled a year ago with a historic pilot strike, with major IT problems that had damaged its reputation.

British Airways "had already made significant flight planning cuts, cut thousands of jobs and now CEO Alex Cruz is the last to leave," said Susannah Streeter, analyst at Hargreaves Lansdown.

For her, Luis Gallego wants to show that he will "make all the changes necessary to lead a successful takeover of the group".

Russ Mold, an analyst at online broker AJ Bell, notes that "British Airways has historically depended on business travelers for much of its revenue," as Mr Cruz noted at his hearing. September that the traffic of these highly profitable travelers was at risk of not returning to the pre-pandemic level, with the habit of video conferencing much less expensive.

Mr. Doyle "will have to lower prices to attract business travelers again or find new ways to keep up his planes as economic conditions improve."

Alex Cruz became CEO in April 2016, having led the Vueling subsidiary from 2009 "when it merged with Clickair," a company he founded in 2006, according to the IAG statement.

He started his career with American Airlines, where he spent 10 years.

Mr. Sean Doyle joined British Airways in 1998, where he held various financial, strategic and commercial positions. Originally from Cork, Ireland, he became General Manager of Aer Lingus in January 2019.

Written by Rahis

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