Alex Cruz was a victim of new IAG chief Luis Gallego trying to flex his muscles, experts have claimed, after the BA boss stepped down following a troubled four-year tenure.

Mr Cruz, who was appointed BA chief in 2016, is to be replaced by Aer Lingus chief executive Sean Doyle but will stay on as non-executive chairman for a transition period before his successor takes on the role.

Mystery surrounds the sudden departure of Mr Cruz, who less than a month ago faced MPs to defend the airline’s actions during the pandemic. 

However, experts have now claimed that the decision is an example of Mr Gallego, who took over as CEO of BA parent company IAG last month, trying to stamp his authority on the airline. 

Several other management changes were made today with Mr Gallego seemingly wanting to draw a line under Mr Cruz’s difficult tenure, which saw him oversee BA’s first strike, a massive data breach and controversial job losses in the wake of the coronavirus pandemic.   

Mr Gallego is hoping to spearhead a recovery for the airline and is thought to have wanted a new face at the helm of BA, with Mr Cruz’s relationship with workers, unions and politicians growing increasingly fractious. 

In April, BA announced plans to cut up to 10,000 jobs, 30 per cent of its global workforce. The airline was accused of threatening a ‘fire and rehire’ scheme which saw some employees facing pay cuts of up to 50%.

Trade union Unite claimed it has only carried out a ‘partial U-turn’ on the issue, with ‘still too many BA workers facing threats to their wages and working life’.

In June, the Commons’ Transport Select Committee described the airline’s treatment of its workers as ‘a national disgrace’.

Mr Cruz defended the job cuts last month and said the pandemic has left the national carrier ‘fighting for survival’.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ‘The fact that his resignation comes so soon after Mr Gallego took up the reins at IAG, would indicate that he certainly felt under pressure to leave. Whether that ultimately was his own decision or one that was made for him is still not clear. 

‘The last six months in particular was clearly hugely difficult for Mr Cruz as he launched a major restructuring programme to radically cut costs in reaction to the crisis, axing thousands of jobs.

Alex Cruz

Aer Lingus chief executive Sean Doyle

British Airways chief executive Alex Cruz (left) is to leave his role, the airline’s parent company has confirmed. He will be replaced by Aer Lingus chief executive Sean Doyle (right)

Luis Gallego, the new chief executive of IAG, is thought to be behind the major shakeup

Luis Gallego, the new chief executive of IAG, is thought to be behind the major shakeup

‘He came under intense criticism for plans to renegotiate contracts with remaining staff and appeared to backtrack a few weeks ago announcing a new draft deal with unions. 

‘It is likely that Mr Gallego now wants to draw a line under this tense period of labour relations and radical cost cutting and start afresh by putting Doyle at the helm.’ 

Passenger numbers have nosedived and in the first week of September the airline only flew 187,000 passengers, compared with almost a million the same week last year.  The slump in flights – roughly a quarter are operating – is causing BA to burn through £20million a day and has led to a jobs bloodbath. 

The pandemic has led to a collapse in demand for air travel, with passenger numbers not expected to return to 2019 levels until 2024.

Mr Cruz previously stressed that ‘people need to get flying again’ if the company is to emerge through the winter and weather the ‘worst crisis in its 100 years of history’. 

However, he refused to comment on a £833,000 bonus paid to the outgoing boss of BA’s parent company, Willie Walsh, who left IAG in September. 

Mr Cruz made £805,000 in salary, benefits and pensions last year. 

Alex Cruz’s troubled tenure as British Airways CEO 

Alex Cruz’s sudden removal as British Airways chief executive has capped a difficult four years at the helm. 

Mr Cruz was appointed CEO in 2016, replacing Teeside businessman Keith Williams.

However, the Spanish-born now-former chairman faced a difficult time in charge of BA, with a succession of controversies culminating in the coronavirus pandemic. 

In 2016 he left 700 British Airways employees without jobs when he closed down the airline’s computer department.

 He then outsourced their computer systems to the Indian company Tata Consultancy Services, drawing the anger of trade unions.

BA then suffered a number of costly IT problems during Mr Cruz’s tenure. 

One such incident, in 2017, left 75,000 flyers stranded and cost the airline £80 million. 

In 2018, BA was penalised under the Data Protection Act after a massive data breach. 

Mr Cruz said he was ‘surprised and disappointed’ after the airline was slapped with a fine of £183.4m for the  breach which saw personal details belonging to 500,000 people compromised.  

There was more trouble for Mr Cruz in 2019 when BA pilots went on strike in September, the first time the company had ever been hit by industrial action.

Pilots who are members of the Balpa union (British Airline Pilots Association) went on strike, leaving 1,700 flights grounded, which affected nearly 200,000 passengers.

Heathrow was the airport worst hit by the walkout.

However, the coronavirus pandemic proved to be the most destructive event of Mr Cruz’s tenure, leading to his resignation as CEO.  

In April, British Airways announced plans to axe up to 10,000 jobs, representing nearly 30 per cent of its workforce. 

The airline was accused of threatening a ‘fire and rehire’ scheme which saw some employees facing pay cuts of up to 50%.

Trade union Unite claimed it has only carried out a ‘partial U-turn’ on the issue, with ‘still too many BA workers facing threats to their wages and working life’.

In June, the Commons’ Transport Select Committee described the airline’s treatment of its workers as ‘a national disgrace’.

Mr Cruz defended the job cuts last month and said the pandemic has left the national carrier ‘fighting for survival’.

However, he refused to comment on a £833,000 bonus paid to the outgoing boss of BA’s parent company, Willie Walsh, who left IAG in September.

He also faced criticism over several other incidents during his tenure. 

In 2016 he left 700 British Airways employees without jobs when he closed down the airline’s computer department.

He then outsourced their computer systems to the Indian company Tata Consultancy Services, drawing the anger of trade unions.

BA then suffered a number of costly IT problems during Mr Cruz’s tenure. 

One such incident, in 2017, left 75,000 flyers stranded and cost the airline £80 million. 

In 2018, BA was penalised under the Data Protection Act after a massive data breach. 

Mr Cruz said he was ‘surprised and disappointed’ after the airline was slapped with a fine of £183.4m for the  breach which saw personal details belonging to 500,000 people compromised. 

There was more trouble for Mr Cruz in 2019 when BA pilots went on strike in September, the first time the company had ever been hit by industrial action.

Pilots who are members of the Balpa union (British Airline Pilots Association) went on strike, leaving 1,700 flights grounded, which affected nearly 200,000 passengers.

Heathrow was the airport worst hit by the walkout.

Ms Streeter believes that the decision to remove Mr Cruz is an attempt to move on from the ill-feeling under his tenure. 

She added: ‘This is a sign that the new chief executive of IAG, Luis Gallego, is flexing his muscles and trying to demonstrate he’ll make the changes necessary to lead a sustained recovery for the airline group.

‘Sean Doyle will have his work cut out to make immediate progress given that British Airways is facing the toughest challenge in its history as demand for international travel has plummeted and quarantine restrictions continue to constrain bookings.

‘He will be considered a safe choice and given his extensive prior experience at British Airways, perhaps someone who will be a peace maker to galvanise the workforce to face the significant challenges ahead. 

‘Now I would expect the focus of the company to switch from survival mode to the recovery position, and it’s likely that plans are already in the pipeline for a period of heavy flight promotion to entice customers to take to the skies again once quarantine restrictions are lifted.’

Davy analyst Stephen Furlong said it was not a surprise that Gallego had moved quickly to make the changes, calling him ‘decisive’ and noting that his background is of leading significant restructuring at IAG’s Iberia Express and Iberia.

‘The last few months have been tough for Cruz, who was tasked with driving through 13,000 job cuts at BA, making him a frequent target of trade union hostility.

‘I suspect they wanted a newer face going forward with BA,’ Furlong said, adding that Doyle had proved himself at Aer Lingus, which went into the coronavirus crisis as IAG’s no.1 performing airline. 

Unite assistant general secretary Howard Beckett said: ‘It’s unsurprising that Alex Cruz has suddenly left British Airways. The handling of industrial relations through this crisis has been unnecessarily confrontational and at times heartless.

‘The harsh reality is that BA’s fire and rehire policy, exposed by Unite, caused untold and unnecessary misery to thousands of loyal employees. These brutal industrial practices has seen the reputation of BA damaged on an international scale.

‘It is only because of the dedicated work of Unite and in particular our shop stewards that widespread industrial action has been avoided so far.

‘We hope that the incoming CEO Sean Doyle will begin a new chapter of constructive relations with staff and unions, repair the reputation of the airline and boost the morale of staff. Unite stands ready to work with the new CEO.

‘At this moment of crisis it is vitally important there is complete transparency on the terms on which Mr Cruz will be leaving British Airways and that these are the same as the thousands of staff who have left through redundancy.’

Unite national officer for civil aviation Oliver Richardson said: ‘Although this change clearly represents a new chapter for British Airways, there is still uncertainty and the continuing threat of ‘fire and rehire’ hanging over a number of BA employees. These threats should be removed in order to allow for a constructive approach to the challenges faced to be found.’

Brian Strutton, general secretary of pilots’ union Balpa, said: ‘Mr Cruz has been in the departure lounge for some time so this is no surprise. He was given a remit to cut costs and found it impossible to do that without alienating BA passengers and employees alike.’

He added: ‘I hope this heralds a new dawn which sees BA behaving like the proud flag carrier airline it should be.’

The Irish Aer Lingus chief set to become the new boss of British Airways 

Sean Doyle first joined British Airways in 1998 and carried out various financial, strategy and commercial roles, culminating in his appointment as director of network, fleet and alliances in 2016.

As part of his role he was accountable for Network and Fleet planning, Airline partnerships and oversight of BA’s business units at London Gatwick and BA Citiflyer. Sean is a non-executive director of Comair Holdings SA. 

He has served in a number of roles in his time at BA including Finance Director BA Cargo, Head of Corporate Strategy and Executive Vice President British Airways Americas. 

Originally from Cork, Ireland, he became Aer Lingus chief executive in January 2019.

Mr Cruz will remain at British Airways as non-executive chairman for a transition period until Mr Doyle also takes on that role. 

IAG refused to confirm the length of the transition period.  

Donal Moriarty, currently chief corporate affairs officer at Aer Lingus, will become interim chief executive at the Irish airline.

Nadine Houghton, national officer of the GMB union, said: ‘Alex Cruz presided over the worst attack on BA employees in the entire history of the company.

‘He leaves behind a demoralised workforce during the greatest crisis the aviation industry has ever seen.

‘Cruz is now the scapegoat for BA’s catastrophic threat of fire and rehire. His departure should be a stern warning for any other CEO believing it’s a tactic they can get away with lightly.’  

New CEO Mr Doyle first joined British Airways in 1998 and carried out various financial, strategy and commercial roles, culminating in his appointment as director of network, fleet and alliances in 2016.

Originally from Cork, Ireland, he became Aer Lingus chief executive in January 2019.

Mr Cruz will remain at British Airways as non-executive chairman for a transition period until Mr Doyle also takes on that role.

IAG refused to confirm the length of the transition period. 

Fernando Candela, chief executive of IAG’s low-cost airline Level, is joining IAG’s management committee in a new role of chief transformation officer.

Donal Moriarty, currently chief corporate affairs officer at Aer Lingus, will become interim chief executive at the Irish airline.

IAG chief executive Mr Gallego said: ‘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.

‘I want to thank Alex for all that he has done at British Airways. He worked tirelessly to modernise the airline in the years leading up to the celebration of its 100th anniversary.

‘Since then, he has led the airline through a particularly demanding period and has secured restructuring agreements with the vast majority of employees.’

Mr Cruz’s removal from his position comes as it was revealed that Heathrow’s passenger numbers were down 81% in September.

Just 1.3 million people travelled through the west London airport last month, compared with 6.8 million in September 2019.

More than half of the passengers who used Heathrow last month were flying to or from the European Union.

Heathrow said long-haul business travel continues to be restricted by international border closures and ‘a lack of testing’ for Covid-19.

Last week, the Government unveiled a taskforce to develop a coronavirus testing system as a potential way of easing quarantine restrictions for arriving passengers.

Heathrow chief executive John Holland-Kaye said: ‘The Government’s Global Travel Taskforce is a great step forward, but needs to act quickly to save the millions of UK jobs that rely on aviation.

‘Implementing ‘test and release’ after five days of quarantine would kickstart the economy.

The new IAG supremo thought to be behind Alex Cruz’s sudden BA exit 

The removal of Alex Cruz as British Airways CEO is thought to have been pushed by new IAG chief Luis Gallego.

Mr Gallego is hoping to spearhead a recovery for the airline, with the pandemic causing carnage in the aviation industry.  

He is an aeronautical engineer from the Polytechnic University of Madrid who started out in the Training Service of the Air Force.

He worked for Spanish airlines Aviaco, INDRA and, between 1997 and 2006, in several positions in Air Nostrum – where he was technical director of the maintenance workshop until his signing by Clickair as Production Director until the merger of the airline with Vueling.

Mr Gallego was Production Manager at Vueling with responsibility for flight operations, instruction, quality and safety, maintenance and operations.

He was commissioned by Iberia to found Iberia Express in 2012, where he was CEO until his passage to Iberia, first as CEO, on March 27, 2013, and since January 1, 2014 as executive chairman of the company.      

Mr Gallego has a base salary of £820,000.

‘But the Government could show real leadership by working with the US to develop a common international standard for pre-departure testing that would mean that only Covid-free passengers are allowed to travel from high-risk countries.’

Mr Cruz previously said: ‘Fewer passengers means fewer flights, and fewer flights means fewer people required to actually service them.’ 

In April, British Airways announced plans to axe up to 10,000 jobs, representing nearly 30 per cent of its workforce.

On September 16, Mr Cruz revealed that 7,200 employees have already left the company, and said the final amount out of redundancies would likely be around 10,000, although this could be greater. 

Appearing before the Commons’ Transport Select Committee, he said: ‘As CEO of British Airways, I have to take responsibility. I cannot ignore the situation. I had to act incredibly fast.

‘I deeply, deeply regret that way too many loyal and hardworking colleagues of mine are having to leave our business, and I understand why MPs are concerned.’

Mr Cruz said he had ‘very difficult and yet very constructive’ meetings with pilots’ union Balpa, which resulted in a package being agreed on job and pay cuts aimed at avoiding a larger number of redundancies. 

But he added: ‘This is an impossible situation. We’re having to make incredibly difficult decisions as a consequence of this pandemic and it is really only because of Covid-19 that we have had to go through such deep restructuring.

‘I have to make these difficult decisions at this time but I am completely dedicated and focused on protecting those nearly 30,000 jobs of those British Airways colleagues that will remain within the business.’ 

The chief executive, whose fleet was mostly grounded during the pandemic, said his mission objective was the survival of Britain’s flagship airline. 

Not mincing his about the precariousness of BA’s future, he said: ‘The main focus at the moment is to survive. 

‘We must make it through, then we must be able to compete effectively and make it through the recovery cycle… people need to get flying again.’ 

Laying bare the uphill struggle to revive BA’s dire financial fortunes, he said: ‘We ended up last year, British Airways, with £2.6billion in cash. 

‘At the end of June we had £2.1billion in cash. We’ve been burning approximately an average of £20million of cash per day.’ 

Mr Cruz also told the MPs that BA had processed 2.1million refunds and 1.6million vouchers for customers whose flights had been cancelled.

Mr Cruz revealed that he had taken a 33.3 per cent pay cut, and his top team a 25 per cent cut.

Last year, the boss made £805,000 in salary, benefits and pensions, he said. 

But Mr Cruz’s efforts could be thwarted by a nervous public who he claimed are avoiding trips abroad for fear of having to quarantine. 

He said: ‘People are still afraid of travelling. Of course, we are having weekly changes, as you know, to the quarantine list. 

‘We don’t have a testing solution yet. And still our customers are paying APD (air passenger duty) even just to fly on domestic regional flights.

‘So the overall situation is quite challenging, and this is why we are taking every measure possible to make sure that we can actually make it through this winter.’    

source: dailymail.co.uk

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