Alex Cruz is no longer the CEO of British Airways, but will remain on as non-executive Chairman for the interim. In his place, Aer Lingus CEO Sean Doyle will become British Airways new CEO. It’s a massive shuffle with interesting dynamics, all spurred on by the covid-19 pandemic and recent retirement of mercurial parent company boss Willie Walsh, of IAG.
Alex Cruz Steps Aside As British Airways CEO
For months, many expected Alex Cruz to step down as British Airways CEO. Now, he has. Willie Walsh, former head of International Airline Group (IAG) passed Cruz over for the top job at IAG, despite excellent share performance at British Airways leading up to the pandemic. Instead, Luis Gallego, formerly of Iberia is in the drivers seat at IAG.
Cruz’ legacy at British Airways all depends upon who you ask.
As a serial technologist in his career, and one of the first to adapt online booking systems decades ago, Cruz drove British Airways down a road most middle managers couldn’t understand: an airline which would compete purely on price in economy, an airline which would introduce a top standard business class seat, and an airline aiming to cut the fat in other areas, via technology. All at the same time.
For holiday makers, British Airways once again became a choice for vacations, often matching EasyJet or Ryanair, but with the benefit of a loyalty program and better flying via Terminal 5. For business travelers British Airways returned to a global airline with a leading business class seat, improved catering and lounges. Not everyone was a fan.
The old guard of flying, who valued complimentary gin and tonics and checked bags in economy chastised Cruz for cost cutting maneuvers, failed to realize that 99% of the market buy on price, and price was changing. In reality, £99 for a gin and tonic isn’t as fun as £30 for a round trip flight to Europe, and many eventually came around.
Introducing the ‘First Wing’ at Heathrow Terminal 5, state of the art new Airbus A350’s and adding Club Suite business class with privacy doors will be lasting legacies left by Cruz, but the good things are often overlooked by major IT struggles which plagued the airline.
There’s some irony in the fact that one of the airline industries greatest technology adapters was plagued by decades old check in systems used by most airlines, which eventually became an achilles heel of sorts. Nonetheless, the good – from outstanding lounge upgrades to new seats and prices people can get behind was very good.
Is British Airways in a better place now, than before Cruz started?
It’d be quite hard to argue a counter point, at least up until circa 8 months ago as covid-19 began to decimate the airline industry.
British Airways is more widely accepted and chosen in the market today than it has been in decades. It’s accessible to more leisure travelers, it’s got a younger fleet and the experience in terminal at Heathrow, and on board around the world is better than when Alex Cruz took over. Recent labor disputes however appear to be the straw that broke the balance.
In his final days at the helm, IAG boss Willie Walsh became increasingly hellbent on brutal staff cut negotiations, including potentially deceiving parliament in regards to staff cut actions in the process. Fire and rehire under weaker terms was the name of the Walsh game, and many believed while cuts were absolutely 100% necessary, the malice went too far.
The labor disputes bruised both sides, and are said internally to have soured relations with CEO Alex Cruz, who was left by Walsh with a fractured workforce in the airline’s greatest time of need. Now, Sean Doyle, a former BA finance analyst and veteran of the company who emerged to lead Aer Lingus will step into the job.
Doyle leaves Aer Lingus in a tricky position, with an improved flying experience, but huge debt via massive aircraft orders, and now, hardly any passengers to fly them. It’s unclear what the future will hold for Alex Cruz once he relinquishes the Chairman title in the transition.
For British Airways, no change in leadership solves any of the problems being faced today, though perhaps a fresh target for labor issues and new public face may buy some reprieve. As a previous director of routes and alliances for BA, Doyle knows how to change things up, which may be just what BA needs.
British Airways further tailored its business in recent years to become a corporate contract dream, and no corporate travelers are flying. Fundamentally, the airline is in serious trouble, after expanding business class cabin sizes in recent years to cater to the billion dollar revenues found from shuffling bankers, pharmaceutical executives and tech gurus around the globe, none of which exist right now.
Business travel is expected to be the last air travel sector to recover. A prediction GSTP made at the start of the global pandemic, among 56 others.
For now, visits to family, friends and relatives is leading the air travel recovery, and British Airways strategy to compete on price, under Cruz’ guidance has been a lifeline in this sector. Perhaps he wasn’t so wrong after all?
In response to the crisis, British Airways has launched a variety of leisure routes and continued its trend of slashing prices to record lows. Without the lucrative margins from business travel up front, the most profitable areas of their business model will remain hard hit.
In other words, further reductions are likely to be needed and the road ahead will likely get worse before it gets better. Sean Doyle is now British Airways CEO, and will take over as Chairman after a transition period. What will Doyle bring to the table? Hopefully a lot. There’s never been a greater crisis in the airline industry, and British Airways is in a precarious position with more slots than flights.
Not sure that I agree with your analysis but Cruz’s difficulties were to a significant extent inherited from both WW & and descisions made before he joined… So why do I disagree?
See: non reclining seats in a longhaul aircraft, failure to service / clean cabins or notify customers eg when ife non functional, dismissal of all but the most legally incontestable compensation claims, response to the recurrent IT issues, resulting in (from memory) 6 separate occasions under Cruz’s tenure when the regulator has had to check BA are following the rules…
PS. IF you consider BA can compete on price then they also have to offer a competitive product; Ryanair have a more generous seat pitch, there are well rehearsed operational issues with BAs BoB catering, the customer service is so appalling that yes even the low costs are easier to deal with (and a heck if a lot more transparent / open about where they are having difficulties). They also seem to have a more pragmatic / consumer friendly approach to eg voucher redemptions than BA who are still fixated on maximising revenue rather than winning friends / loyalty and making a smaller margin.
Will be interesting to see how BA move forward under Doyle. During Cruz’a tenure there was a definite trend away from the regions, other than as feeder flights to Heathrow, with many of those poorly timed for connections.
I think Cruz just wasn’t up to the job. Good at cutting cost, terrible at creating a value product and brand. We also didn’t publicly hear why the 2016 IT fiasco happened – I heard it was a disaster of BA’s own making by cost cutting the IT department and forgetting who maintained the buildings ?
The way he designed the product was so myopic.
It’s surely simple to keep passengers happy, give them:
– a good schedule / flight time. Hopefully a direct flight.
– some really good food and drink(long haul) or a free drink (shorthaul)
– some Leg room space (Not densifying 777/320 planes) that you don’t get on low cost carriers.
– a price that’s similar to other airlines but with a small premium. There are many people out there that will pay for comfort and a good product,.
I disagree with the articles comment on the new business seat. Having tried if the sleeping position to Dubai, is not particularly spacious for your feet and quite uncomfortable. That needs to be changed ASAP.
Also, where BA are going to struggle is operating out of a very expensive Heathrow – maybe it’s time to transfer everything and one world airlines to LGW ? Take over the airport and reduce the airlines costs – Mr Doyle why not ?
I have now read to assessments pointing at Cruz improvements on the business product. The airline coonstantly runs out on basics on long haul in club (=sparkling water; few weeks ago they didn’t have any to start with). The benefits for many frequent flyers only exist on paper, priority baggage or other basic benefits are still not there. If you tried connecting through Heathrow recently, fast track is permanently closed. I really enjoyed the addition of GL to be taken care of by special services but that is now over too. BA management struggles to respect customers and staff; mostly amazing staff is the reason why I still fly BA. BA offers an inconsistent product, well marketed and presented. But when they tested new short haul seats and the feedback about comfort was negative, they still went ahead with the product. They used to extend upgrade vouchers past the official 1 year maximum, now during the pandemic I had multiple vouchers expiring and they won’t offer extension beyond an extra year anymore.
LH has a much more comfortable seat and certainly pays a lot of attention to their top tier hon. I did celebrate when Walsh exit was announced and I am very happy today.
It can only get better. I already shifter my travel from AA to DL and am no longer looking et BA first.
As previously stated, I think that the whole IAG/BA management team has been a catastrophe. Above comments have mentioned some of the shortcomings on BA’s part in business class while economy where most people fly now compares unfavorably with ULCC’s. BA is frequently at war with their own people, with some having to sleep in their cars because the pay is so awful, and now BA is directly threatening customers for saying bad things about the airline. This whole ‘Show Me The F*****g Money’ thing of theirs is horrible for staff and passengers. BA needs real leadership for a change, not another inept nitwit who will drag the airline down even further.
Maybe it’s time BA stopped trying to compete with the low cost carriers and get themselves into a different market segment, that people were excited to choose.
One with really good food and good leg room. With the old planes going, new planes will help a lot .
Also. Up the game on IT, no need to talk to Anyone for Rebooking and changing flights – it would make a big difference to the brand. Please don’t want stress, with Covid it gives peace of mind when booking.
It’s not difficult BA
Everybody in these comments will prefer a loss making airline so that they can have free food on short haul…Nobody will ever admit the positives that cruz brought the company, if not for cruz there will be probably be some sort of haphazard 8 great club world seat with trash lounges and trash food but you feel good because food is free on short haul and you have unbelievably uncompetitive 9 abreast on a 777. People should wake up. More people have flown BA under Cruz’s tenure than ever before, he really changed a lot of things, same people will be scouting for aircrafts with club suite. I remember when club suite everybody asked “oh will it be the same price as standard club world” so what does it all boil down to? price! at the end of the day you want the airline to give what you’re refusing to pay for. you must be jokers.
You’re not wrong!
You’re saying “pay for crap, you get crap”. What you’re omitting is that if crap is the only choice, how can you avoid paying for crap? Further, Delta – under non-pandemic circumstances – doesn’t seem to have a problem making huge steaming piles of profit with their 9 abreast 777’s that you find so wildly uncompetitive. That simply illustrates that you can make more money by offering a quality product rather than what BA is offering these days. As to more people flying, it would be a shock for less people to fly BA given their ever increasing stranglehold on LHR and increased population.