IAG’s new boss to take helm as airline industry reels from biggest crisis in its history
IAG’s new boss will take the helm next week as the airline industry reels from the biggest crisis in its history.
Spaniard Luis Gallego succeeds Willie Walsh as chief executive of the British Airways owner at the annual meeting in Madrid on Tuesday.
At the same time, investors will vote on the company’s plans to raise £2.5billion in a rights issue that has already secured the backing of its biggest shareholder Qatar Airways.
A motion to approve a bonus for Walsh of £883,000 at the meeting could inflame tensions, however. The Institutional Shareholder Services advisory group said it should be rejected. IAG is seeking to shore up its creaking finances as the industry battles to survive the Covid-19 pandemic and lockdown that has grounded flights around the world. Shares are down 65 per cent this year.
The group has already slashed costs at BA, with 12,000 jobs set to go and new terms for some long-serving staff, setting up a bitter clash with unions.
Gallego, 52, is chief executive of Spanish airline Iberia, which is also owned by IAG along with Aer Lingus and Vueling.
He will now have to steer the company out of the depths of the worst downturn ever to hit the airline industry. A former pilot and dealmaker, 58-year-old Walsh created IAG by pulling BA and Iberia into the modern age of budget flying, taking a tough line on unions and cutting costs to build a group that for years outperformed traditional European peers.
Gallego took the helm of Iberia in 2013 and was credited with turning the Spanish airline around. His task now will be to cut group costs at IAG while managing damaged relations with unions and politicians and stepping up the battle with low-cost rivals, Ryanair and Easyjet.
The world looked very different when Walsh announced his retirement in January. He was set to leave on a high, with IAG’s share price and profits close to record levels. Weeks later, Covid-19 hit – and airlines were in the eye of the storm.
The Irishman shrugged off questions about his own next move, telling analysts on a final call he would be ‘in Mary Mac’s pub, and a few other nice pubs in Dublin’.