British Airways CEO Steps Down As Parent IAG Reshuffles Executives, COVID-19 Decimates Air Travel

Alex Cruz has stepped down as chairman and CEO of British Airways, or BA, in one of the first major executive shakeups arising from the COVID-19 crisis.

BA’s Spanish-based parent, International Consolidated Airlines Group, or IAG, said on Monday that Cruz will be replaced by Sean Doyle, the current chairman and chief executive of Aer Lingus, another IAG subsidiary.

Cruz will remain as BA’s non-executive chairman, which means he will no longer hold a management position at the airline. Cruz first became BA’s chairman and chief executive in April 2016.

Doyle initially joined BA in 1998, eventually becoming a member of the airline’s executive management committee in 2016. He ascended to the role of Aer Lingus chief executive in January 2019.

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

“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 IAG chief executive, Luis Gallego.

Gallego, who himself took over as IAG CEO in September, succeeding Willie Walsh who retired, praised Cruz for leading the airline “through a particularly demanding period.”

BA and its unions have been engaged in a contentious battle over layoffs and pay reductions. The airline already said it will cut 13,000 jobs – while some workers have seen their wages cut by as much as 50%.

"This [shakeup] 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," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Theo Leggett, BBC’s business correspondent, wrote that Cruz’s final task at BA was to implement thousands of job cuts and reduce pay.

“Those cuts may have been necessary due to the COVID crisis, but the way BA went about it --effectively threatening to fire employees who refused to sign new contracts -- provoked deep resentment and bitterness among the workforce,” he wrote. “And [Cruz] was hardly popular to begin with. He arrived at BA with a [mandate] to cut costs and boost profitability, to enable the airline to compete with budget carriers. He succeeded, but at a price.”

Streeter said that BA’s new boss, 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."

BA is currently operating at only about one-fourth of capacity. In the second quarter, the airline saw its passenger traffic plunge by 95% from a year earlier, resulting in a first-half operating loss of 4.04 billion euros ($4.77 billion).