British Airways chief executive Alex Cruz is due to step down, airline parent company IAG has said.
He will be replaced by Aer Lingus CEO Sean Doyle, but will remain as non-executive chairman for a transition period before his successor takes on the post.
Mystery surrounds the sudden departure of Mr Cruz, who less than a month ago clashed with MPs to defend the airline’s employment policies during the pandemic.
The coronavirus crisis has caused carnage in BA, which in April announced plans to cut up to 12,000 jobs, 30% of its global workforce.
The airline has been accused of threatening a “layoff and rehire” program that has seen some employees face pay cuts of up to 50%.
The Unite union claimed to have made only a “partial turnaround” on the issue, “still too many BA workers facing threats to their wages and working lives”.
In June, the Commons Transportation Selection Committee called the airline’s treatment of its workers “national disgrace.”
Mr Cruz defended the job cuts last month and said the pandemic has left the national carrier “fighting for its survival”.
However, he declined to comment on an £ 833,000 bonus paid to outgoing BA parent company boss Willie Walsh, who left IAG in September.
British Airways chief executive Alex Cruz (left) is due to step down, the airline’s parent company has confirmed. He will be replaced by Aer Lingus CEO Sean Doyle (right)
He stressed that “people have to get on the plane” if the company is to come out of winter and face the “worst crisis in its 100 years of history”.
BA boss warns of ‘airline bankruptcies’ if slot relief is not extended
There will be airline bankruptcies and thousands more job losses if a waiver requiring airlines to use airport slots is not extended, British Airways chief executive Alex Cruz has warned.
“ I suspect that if this slot relief is not provided for the winter season, we will have a number of airline bankruptcies and there will be many, many thousands of jobs that will be lost, in addition to the jobs that have already been lost, ” Mr Cruz told MPs.
He said he was not considering this scenario because European Union reports encouraged that waiving the requirement for airlines to use 80% of their take-off and landing slots would be extended until ‘in March 2021.
But he told MPs that many potential clients are still hesitant to travel for fear their vacation destination will suddenly be put on the government’s quarantine list.
Passenger numbers have plummeted and in the first week of September the airline carried just 187,000 passengers, up from nearly one million the same week last year.
The collapse of flights – around a quarter are in operation – is burning BA £ 20million a day and has led to a bloodbath of jobs.
IAG Managing Director Luis Gallego said: “ We are going through the worst crisis in our industry and I have no doubts that these internal promotions will ensure that IAG is in a good position to emerge in a position of strength.
“I want to thank Alex for everything he has done at British Airways. He worked tirelessly to modernize the airline in the years leading up to its 100th anniversary celebration.
“Since then he has led the airline through a particularly demanding period and has entered into restructuring agreements with the vast majority of employees.
Mr Cruz’s dismissal from his post comes as it was revealed that Heathrow passenger numbers fell 81% in September.
Just 1.3 million people passed through West London Airport last month, up from 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 limited by the closure of international borders and “ a lack of testing ” for Covid-19.
Last week, the government unveiled a task force to develop a coronavirus testing system as a potential way to ease quarantine restrictions for arriving passengers.
Heathrow Managing Director John Holland-Kaye said: ‘The government’s Global Travel Task Force is a big step forward, but must act quickly to save the millions of UK jobs that depend on it ‘aviation.
“Implement test and release” after five days of quarantine would kickstart the economy.
“ But the government could show real leadership in working with the United States to develop a common international standard for pre-departure testing, which would mean that only passengers without Covid are allowed to travel from countries with high risk. ”
Mr Cruz previously said: “Fewer passengers means fewer flights, and fewer flights means fewer people needed to serve them.”
In April, British Airways announced plans to cut up to 12,000 jobs, representing nearly 30 percent of its workforce.
On September 16, Cruz revealed that 7,200 employees had already left the company, and said the final amount of the layoffs would likely be around 10,000, although it could be higher.
Appearing before the Commons Transport Selection Committee, he said: ‘As CEO of British Airways I have to take responsibility. I cannot ignore the situation. I must have acted incredibly fast.
The British Airways boss defended his decision to cut as many as 12,000 jobs and said the pandemic had left the national carrier “ fighting for survival ”.
“ I deeply, deeply regret that too many of my loyal and hardworking colleagues have to leave our company, and I understand why MPs are worried. ”
Mr Cruz said he had had ‘very difficult and yet very constructive’ meetings with the Balpa pilots’ union, which resulted in an agreement on a package of job and wage cuts aimed at avoiding a higher number of layoffs.
But he added: “It is an impossible situation. We have to make some incredibly difficult decisions because of this pandemic and it is really only because of Covid-19 that we have had to undergo such a profound restructuring.
“ I have to make these tough decisions right now, but I am totally dedicated and focused on protecting these nearly 30,000 jobs of these fellow British Airways who will remain with the company. ”
Key figures underlying the ‘worst BA crisis in 100 years’
Works: BA has announced around 12,000 layoffs, but the estimate is now closer to 10,000 – 7,200 have already left.
Passengers: Mr Cruz announced that BA only carried 187,000 passengers last week, up from nearly a million the same week last year.
Flights: BA currently only operates 25 to 30% of its flights.
Funds: Mr Cruz said BA spends £ 20million a day.
Pay: Mr Cruz revealed his own financial package to MPs and said he won £ 805,000 in salary, benefits and pensions last year. He added that he had suffered a 33 percent pay cut, and his top team a 20 percent pay cut.
The managing director, whose fleet was largely grounded during the pandemic, said the focus of his mission was the survival of Britain’s flagship airline.
Not to mention the precariousness of BA’s future, he said: ‘The main focus at the moment is to survive.
“We have to be successful and then we have to be able to compete effectively and go through the recovery cycle… people have to get on the plane.
Exposing the bitter struggle to revive BA’s dire financial fortunes, he said: “ We ended up last year, British Airways, with £ 2.6bn in cash.
“At the end of June we had £ 2.1bn in cash. We burned around £ 20million a day. ”
Mr Cruz also told MPs that BA processed 2.1 million refunds and 1.6 million vouchers for customers whose flights were canceled.
Mr Cruz revealed that he suffered a 33.3% pay cut and his top team by 25%.
Last year the boss earned £ 805,000 in salary, benefits and pensions, he said.
But Mr Cruz’s efforts could be thwarted by a nervous public who he says shun overseas travel for fear of having to quarantine.
He said: “People are always afraid to travel. Of course, we have weekly changes, as you know, to the quarantine list.
“We don’t have a test solution yet. And our customers still pay ODA (Air Transportation Tax) even just to fly on domestic regional flights.
“So the overall situation is quite difficult, and that’s why we are taking all possible measures to make sure that we can actually survive this winter.