Álex Cruz steps down as BA chief after Covid job cuts row

  • 10/12/2020
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Álex Cruz has stepped down as chief executive of British Airways with immediate effect after heavy criticism of the handling of 12,000 job cuts at the airline. Cruz will be replaced with immediate effect by Sean Doyle, the chief executive of Aer Lingus. Doyle will also take over Cruz’s role as non-executive chairman of BA after a transition period. Both carriers are part of International Airlines Group (IAG). Last month, Cruz was forced to defend BA’s job cuts strategy, described as “fire and rehire” by unions, which said it was a plan to push the 30,000 employees who still had jobs on to downgraded terms and conditions. Speaking to a committee of MPs, which called British Airways a “national disgrace”, Cruz said the airline was in a “fight for survival” and that he regretted “that way too many loyal and hardworking colleagues are having to leave the business”. IAG has promoted Donal Moriarty, the Aer Lingus chief corporate affairs officer, to the role of the Irish airline’s interim chief executive while a permanent replacement is found. “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 Luis Gallego, the IAG chief executive. “Cruz has led the airline through a particularly demanding period and has secured restructuring agreements with the vast majority of employees. As our new team comes together we remain focused on making the right operational and strategic decisions for the long-term benefit of all IAG’s shareholders.” Cruz, who was appointed chairman and chief executive of British Airways in 2016, was paid £805,000 in salary, benefits and pension last year, but took a 33% pay cut during the pandemic. The Unite union called for complete transparency over any severance payments to Cruz and for a more constructive relationship with the incoming chief executive, describing BA’s handling of industrial relations in the Covid-19 crisis as “unnecessarily confrontational and at times heartless”. Cruz never appeared to win the hearts and minds of staff at BA, many of whom resented what they saw as the downgrading of the national carrier into a competitor with budget airlines. On arrival from IAG’s sister airline Vueling, Cruz quickly signalled his intent to chop out the free sandwiches from economy, bringing in a paid-for trolley on short-haul routes. A cabin-crew strike over pay was brewing within his first year, before Cruz had to mop up after one of the biggest fiascos since the opening of Terminal 5, an IT meltdown that left tens of thousands of BA passengers stranded at Heathrow on a busy May bank holiday weekend. Cruz’s days appeared numbered when his boss, the chief executive of IAG, Willie Walsh, conspicuously failed to back his handling of the BA pilots’ strike last autumn, and refused to agree he was a potential successor for the top job at IAG. Instead, Gallego was named as chief executive after Walsh, although because of the pandemic the handover was delayed until last month. The new chief executive has not spared his long-standing colleague and former boss – who had told MPs last month of their close working history. Gallego worked with Cruz in starting up ClickAir, a small Barcelona-based carrier, and followed him in its merger with Vueling, where Cruz became chief executive again. Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown, said: “This is a sign that Gallego is flexing his muscles and trying to demonstrate that he’ll make the changes necessary to lead a sustained recovery for the airline group.” In July, IAG reported a record loss of €3.2bn (£3.8bn) in the first half of the year as passenger numbers collapsed amid the coronavirus crisis. The record loss forced the group to make a €2.75bn rights issue to shore up its balance sheet and it has warned that it does not expect 2019 levels of passenger demand to return until 2023 or even 2024. Mishaps while Cruz was chief executive May 2017 – IT meltdown. British Airways’ check-in and operating systems crash at the start of the bank holiday weekend, causing tens of thousands of passengers to miss flights, and throwing schedules into disarray for days. The BA boss takes two days before appearing on camera to explain the chaos. September 2018 – data breach. BA’s ticketing system is hacked and up to 380,000 passengers’ bank details are compromised. The following year the information commissioner hands BA a record £183m fine for failing to take sufficient care of its customers’ data. September 2019 – pilots strike. Virtually all BA flights are ground during two days of strike action by pilots, the first such walkout in the airline’s history, after pay negotiations turn sour. Walsh later urged him to “get involved” to solve it and mulled that he “understood the issues better”. April 2020 – Covid crisis Cruz tells unions that BA will seek 12,000 redundancies and causes further anger by threatening to fire and rehire remaining staff warning that the airline is in a fight for survival. BA is branded a “national disgrace” for its treatment of staff.

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