Wow: British Airways CEO Alex Cruz Steps Down

Filed Under: British Airways

There are some major leadership changes coming at International Airline Group (IAG), which is the parent company of British Airways, Iberia, Aer Lingus, and Vueling.

Alex Cruz steps down as British Airways CEO

British Airways CEO Alex Cruz will be stepping down from his role effective immediately, and he’ll be replaced by Aer Lingus CEO Sean Doyle. Cruz will remain on as non-executive Chairman for a transition period.

One thing I’ve never particularly liked about IAG is the extent to which the company simply shuffles around executive positions, rather than hiring from outside. While I can appreciate rewarding loyal employees and creating talent within, I feel the company takes that to an extreme, and that’s why innovation is oh-so-lacking at IAG.

Here are some leadership changes we’re now seeing at IAG:

  • IAG CEO Willie Walsh recently retired, and was replaced by Iberia CEO Luis Gallego
  • Aer Lingus’ CEO is taking over as British Airways’ CEO
  • Aer Lingus’ Chief Corporate Affairs Officer Donal Moriatrty is taking over as interim Aer Lingus CEO, with a permanent replacement to be announced soon
  • LEVEL CEO Fernando Candela will now be appointed IAG’s Chief Transformation Officer, which makes me wonder what’s ahead for the company

Alex Cruz is stepping down at British Airways

Alex Cruz’s confusing legacy at British Airways

First it’s worth acknowledging that Alex Cruz has had an incredible career in the airline industry, and as an avgeek I respect anyone who has spent decades working in this very tough industry:

  • Cruz started off working for American Airlines
  • Cruz was the founding CEO of Spanish low cost carrier Clickair
  • Clickair merged with Vueling, and then Cruz became CEO of Vueling
  • In 2016 Cruz became CEO of British Airways

Cruz was the CEO of Spanish low cost carrier Vueling

How did Cruz do leading British Airways?

British Airways introduced Club Suites under Cruz’s leadership

Do I love the direction British Airways took under Cruz’s leadership? No, not entirely. But:

  • I think IAG CEO Willie Walsh was still calling most of the shots
  • The fact that the CEO of an ultra low cost carrier was appointed CEO of British Airways tells you everything you need to know about the direction he was supposed to take the airline

The writing was on the wall for Cruz “stepping down”

I’m not at all surprised to see Cruz stepping down at British Airways now. While I don’t have any inside knowledge here, it sure seems to me like he may have butted heads with IAG leadership:

  • When it was announced that Walsh was retiring as IAG CEO, we expected that Cruz would replace him, since the precedent was that the British Airways CEO becomes the IAG CEO
  • But he was skipped over (the Iberia CEO instead got the role), so clearly something wasn’t going right

That’s also why I’m not surprised to see him now “stepping down” as British Airways’ CEO. What we don’t know is if:

  • He was forced out of the role
  • He left voluntarily, because he was mad about being skipped over for the IAG CEO role, and figured at this point there’s no reason to stick around, since it’s not like the position will be particularly lucrative in the next few years

What do we know about British Airways’ new CEO?

When I first heard that Aer Lingus’ CEO was taking over as British Airways’ new CEO, I was kind of excited. Of IAG airlines, Aer Lingus is the airline that impresses me the most by far. The airline has undergone an incredible transformation, and has grown consistently and sustainably.

That being said, I’m not sure Doyle deserves much credit for that:

  • Doyle was appointed Aer Lingus CEO as of January 2019, so he has been in the role for less than two years, and most of the decisions that got Aer Lingus to this point happened before that
  • Prior to that, Doyle was British Airways’ Director of Network, Fleet & Alliances
  • Doyle spent his entire career prior to that at British Airways, as he had been working there since 1998

I wouldn’t expect any fresh ideas here, since we’re seeing someone who has spent his entire career at IAG, as seems to be the case with most of the leadership there.

Aer Lingus has come a long way in recent years

Bottom line

British Airways CEO Alex Cruz is stepping down immediately, and is being replaced by Aer Lingus CEO Sean Doyle.

Personally I don’t have particularly strong feelings here one way or another. IAG simply shuffles around executive positions, so I wouldn’t expect any radical transformation at British Airways, one way or another.

Perhaps the more interesting question revolves around the creation of the new “Chief Transformation Officer” role for IAG.

What do you make of Cruz stepping down as British Airways’ CEO? Are you expecting any major changes?

Comments
  1. Historically, data shows that company insiders have been more successful than outsiders. Secondly, it is less common in Europe to hire outsiders compared to the US. Lastly, all these moves were likely part of the negotiations that happened when these airlines were merged into IAG.

  2. The writing was on the wall a few months back, when Walsh publicly slapped down Cruz.

    Despite the US’s longstanding attachment to the “great men” theory, in fact most CEOs make only relatively small differences to their organisations. Which is why their vast pay packets and incentivisation schemes are unwarranted. The coincidence of circumstances is usually much more important.

    Napoleon knew that: it’s why he said the one quality he wanted in all his generals was that they should be lucky.

  3. I personally think there will be a lot more of these articles over the coming months. Everything travelwise seems to be on the verge of collapse.

  4. Alex Cruz has been the worst leader of BA ever – he deserves no respect, I’m surprised you actually say that Ben. Another talentless charlatan cutting a grift way above their competency and skills. He’s presided over the destruction of the airline, handled every problem terribly and made industrial relations worse. The positive improvements to BA’s dated premium product you mention would have happened anyway, aren’t revolutionary because he’s a moron with zero creativity or innovation – he’s introduced an existing available everywhere and basically stolen other airlines idea of getting Do&Co to do catering it’s hardly really a complex or innovative solution to the issues of BA’s outdated product. Good riddance.

  5. Also I have to add – his background is hardly stellar. He was at American during one of its worst periods, and Vueling is hands down the worst airline in Europe in terms of customer service and customer care. His history and whole career is pretty much all an appalling record.

  6. That’s right. Step down when there’s a real challenge. That’s why CEOs make so much $$$… to step down when things get tough, not to try to save the company. Must be nice.

  7. Hope that BA ditches there gag order in which they threaten Executive Club members for speaking out publicly.

  8. Good. He was a terrible leader that destroyed a once great airline. Only second in incompetence and brand destruction to Alan at Qantas.

  9. Ben I want to challenge you on this comment you made

    “…since the precedent was that the British Airways CEO becomes the IAG CEO”

    What precedent? There have been only two IAG CEOs – Willie Walsh and now Luis Gallego.

    If there had been half a dozen CEs of IAG all coming from the BA side then yes you could say the BA CE would always get the top job but that’s clearly not the case.

    If anything the precedent now would seem to be that there would be a CE from BA to be replaced by the CE of IB and then back to BA and so on. But again since we are now only onto our second IAG CE that’s not exactly precedent either!

    Uness there is something written into the IAG constitution that says BA supplies the CE and IB the chair they can appoint anyone they like to the jobs.

    I wonder how well the PANJNY would be run if they appointed the Chair and CE based on merit and not because NY appoints one role and NJ the other.

  10. Would be nice if BA would incorporate some Aer Lingus quality service and product.

    But I won’t count on it.

  11. While it has been evident BA has embellished lovely service in Business and First, it has been extremely sad to see the downgrade in coach. This should be highly re-evaluated. Only a few years ago before Cruz, BA offered always such nice service for the regular cabin traveler, many of whom saved up to pay for a special trip (and not a business). BA’s attention to little details made the long international flight a wonderful experience far beyond other companies (ie hot towels before arrival), and why I would choose when possible over the decades of travel.

  12. Unfortunately (getting old sucks) I’m in my 50s with 30+ years of work experience at different companies and managers/leaders usually fall into 3 categories (sorry for the boring names):

    1. Functional – Get the job done but nothing really great or bad.

    2. Bad – Egomaniacs, power trippers, do it my way or the highway, etc. One of these can destroy a strong office/company in a short period of time. People tend to stay loyal, often more than they should, and enjoy their coworkers in a good office but once a bad manager gets there and a few key people leave the office, others look around and say “why should I stay?” and anyone with talent leaves and it becomes a domino effect.

    3. Excellent – I was lucky enough to see a few of these. They treat people with respect, realize you can’t squeeze blood out of a rock, hold people accountable while giving them freedom and tools to get the job done. As an office gets more talent, no one wants to be the weak chain and everyone tries harder and enjoys their coworkers (mostly).

    Even with an excellent manager it can take a long time to build up and recruit top workers to the office unlike how quickly a bad manager can destroy an office/company.

    I started my career with an excellent manager and it has spoiled me for much of the rest of my career since it is hard to find those in the real world. We had a team of people who got a ton job, many went far in their careers, and we worked and played hard. A great way to grow up (from college graduate to mid 30s).

  13. It’s fair to say Doyle doesn’t deserve recognition for the improvements at Aer Lingus. That said, Cruz doesn’t deserve recognition for the improved club suite either – that was before his time too, as were the A350 orders. To be fair to Cruz, the negatives were already there before, and he was hardly able to do anything positive because Walsh was calling the shots. Do I think with Walsh now gone he’d have done anything good even without covid? No. But it’s probably unfair to blame him for all the failures at BA since he’s been there. He’ll be remembered for the economy food debacle and the hi-vis jacket. That’s about it. As you say, Doyle has been around BA for longer than Cruz had – now it’s up to Doyle to see what he can do now Walsh isn’t around to foul things up.

  14. Be careful for what you may have wished for or please to see happen.

    BA is up the creek without a paddle in a storm. This is not a case of just bringing back full service and world beating products. They come at a price, a very large one, and how many of these people are currently spending or will be anytime soon.

    I wonder how long Doyle will truly last?

  15. I’ll tip my hat to the new constitution
    Take a bow for the new revolution
    Smile and grin at the change all around
    Pick up my guitar and play
    Just like yesterday
    Then I’ll get on my knees and pray
    We don’t get fooled again
    Don’t get fooled again
    No, no!

    Meet the new boss
    Same as the old boss

  16. Genteel “stepping down” or getting fired/shown the door?
    One doesn’t do “stepping down” unless there is some “stepping up” plan somewhere else. That does not appear to be the case here, so I guess he’s putting up the ‘Airline Exec For Hire’ shingle given he’s not near retirement age.
    Should Doug Parker be nervous?

  17. @vicnc
    Absolutely spot on. He should join the other faker, Mueller just as useless on the scrap heap.

    If Willy Walsh was calling the shots on Cruz, that makes Cruz a useless yesman of a CEO. If Willy was not, then Cruz did it on his own, so he’s equally useless.

    Good riddance does even come close to how I feel about this moron.

  18. Strategically I wonder if Qatar Airways is happy with these changes. Is the relationship with Mr Gallego as strong as it was between Mr Walsh and Mr Al Bakkar. Could we see QR bid for the 70+% of shares it does not own, given the rumours that IAG may want to sell off BA as a standalone airline particularly now that the UK is out of the EU and about to do a deal or no deal on trade with Europe. All we do know is that change is coming faster than ever now with the pandemic and airlines need financially strong owners. I suspect over this Winter we are going to see some very interesting moves.

  19. @William Q Jones: Technically QR can’t buy a majority stake in BA still as all EU law becomes British Law when we leave the EU at the end of the year. This piece of legislation would have to be individually repealed and new legislation proposed before that could happen.

  20. @William Q Jones can you cite any source for the “rumours that IAG May want to sell off BA as a stand-alone airline”? BA has generally been by far the most profitable arm of the group, so I cannot see a situation in which they would flog it off.

    QR would never get permission from the UK to hold a majority and foreign majority ownership of airlines is barred in the EU as well.

    Overall this is a positive move – Sean Doyle was a BA exec from the days when they were a world-leading airline, not from a low-cost carrier background. Hopefully he brings a different management philosophy with him and helps to restore some pride (and better labour relations) among BA staff.

  21. Rumours are just that – they swirl. You can never say never. The airline world has changed for good. Direction post COVID is totally different to pre COVID. Cash burn of BA is enormous and will continue for the foreseeable future in business terms and IAG does not have unlimited access to cash. The UK state was not prepared to help VA and would not have the capacity to help BA given the skyrocketing UK debt. There is speculation over multiple European airline bankruptcies airing at the moment. Qatar is a very good friend of the UK and the QR CEO is nothing if not very ambitious. I would not bet on anything remaining constant at the moment. Whatever you think about the management changes, the new people have a huge rock to push uphill against a resurgent virus.

  22. @Kerry
    “QR would never get permission from the UK to hold a majority”

    That’s a bold assertion. The UK has consistently demonstrated its willingness to flog off pretty much anything commercial to foreign owners (and don’t forget Qatar is already the owner of vast chunks of UK infrastructure and has huge property holdings in London (the frequency of QR flights between Doha and London is not at all a coincidence, and nor is it coincidence that QR’s flight number 1 flies to London)).

    I’d be amazed if (post-EU) the current UK government tried to block an attempt by IAG to sell BA to the Qataris. They might even encourage it, seeing it as preferable to it being owned by Spain (with whom the UK’s relationships are already rapidly freezing. British possession of Gibraltar is a running sore to Madrid, and the long-running dispute has only been suppressed because of both countries’ EU membership. With that ending for the UK, expect the EU to pivot behind Spain’s claims to the territory).

  23. @The nice Paul, If BA were to be sold to QR it will be Al-Baker calling the shots all the way. Great for customers as we will get top notch products. However all staff for back office functions will all be gone abroad if not already done so and cabin and to a certain degree flight crew will all get new contracts on lower rates.

    Otherwise if QR upped the shareholding Al-Baker will be on the IAG board for sure!

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