- British Airways CEO Alex Cruz was abruptly ousted on Monday, and will be replaced by Aer Lingus CEO Sean Doyle. Both airlines are owned by International Airlines Group (IAG).
- Most airlines have kept their leadership stable over the past year, maybe the most challenging in the industry's history.
- Now, IAG and two of its member airlines are entering what could be the worst winter season in modern airline history with new leadership — something that can be a challenge even at the best of times.
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British Airways CEO Alex Cruz stepped down on Monday, ending a four-year tenure at the head of the British flag carrier, a sudden and unexpected move as the airline tries to survive and bring some semblance of stability during the pandemic.
Cruz's departure from the International Airlines Group-owned airline comes as the airline was "navigating the worst crisis faced in our industry," IAG CEO Luis Gallego said. British Airways, which entered the pandemic with a staff of about 42,000, is in the process of cutting 13,000 jobs.
Sean Doyle, CEO of IAG-owned Aer Lingus, will replace Cruz. Before taking the helm of the Dublin-based carrier last year, Doyle had worked for British Airways for 20 years in a variety of executive roles. Gallego cited his "extensive experience" at British Airways and success in his two years leading Aer Lingus.
Cruz's four-year tenure had been pockmarked by disputes with organized labor — underscored during recent discussions on pandemic-related job cuts — as well as a variety of other incidents, including a major computer security failure which in 2018 allowed hackers to steal the personal data of about half a million passengers.
IAG also saw its CEO, Willie Walsh, depart the company this year. He was originally slated to leave in March, but remained until September to help steer the company through the most turbulent days of the pandemic.
Airlines are gearing up for the next stage of the pandemic crisis — a long, dark winter
British Airways, among other airlines in Europe and around the world, now enters a turbulent final quarter of the year. But the century-old British carrier, along with parent IAG, and sibling Aer Lingus, are coming into what could be a disastrous winter period with major disruption at the top.
Although airlines have seen waves of furloughs and layoffs through the eight months of the pandemic crisis, most have striven to retain a semblance of stability at the top — a play to reassure analysts, shareholders, and workers.
One exception was at United Airlines, where CEO Oscar Munoz retired in May. The move, however, had been announced nearly six months earlier, and Munoz's replacement, Scott Kirby, was already the airline's president. Kirby was also widely expected to be groomed for the role when he was hired away from American Airlines in 2016.
Travel demand in Europe reached as high as 50% of 2019 levels this summer, while demand in the US is down 70% — an improvement from an April low of 97%.
But airlines on both sides of the Atlantic don't expect to see demand fully recover until as late as 2024. New waves of infections have broken out in several European countries, while some US states are still struggling with rampant outbreaks.
Even as talk of a travel corridor between New York and London picks up, there is no international testing strategy in place, and both cities — as well as their respective countries — remain partly closed, limiting the attraction for tourists. Combined with a virtual halt in business travel, British Airways and the rest of IAG's airlines face a dearth of revenue or demand this winter.
It's possible that the reshuffling at the top will help British Airways weather the rest of the crisis. Doyle is well known and well-acquainted with the airline's various departments and operations, and Cruz's relationship with the airline's labor unions had deteriorated to the point that unions were campaigning against the airline — with Parliament taking notice.
Still, reshuffling is not a guaranteed strategy. To oust a CEO at such a juncture is unusual, and suggests that IAG may be looking for a significant and swift reset or change in dynamic in the management suite as the airline moves through survival mode and begins looking towards its eventual recovery.
Now, as the airline enters the slow winter months without the key contingents that often keep it afloat — business travel and long-haul international travel — it will also have to navigate the normal challenges of a new head honcho.
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