It’s times like these where airlines need great leaders… and then you have the CEOs of IAG and British Airways.
British Airways pilots given 50% pay cut
Like most major global airlines, British Airways is in a dire situation. Just days ago, British Airways CEO Alex Cruz sent a note to employees with the title “Survival of British Airways.”
The Financial Times reveals that British Airways pilots will be getting a significant pay cut over the next few months, which equates to roughly 50%:
- For April and May, British Airways pilots are getting a 50% reduction in their basic salary, which will be distributed over three months
- Pilots will have to take two weeks of unpaid leave in April and May
As the airline described this to pilots, this is intended to address “the immediate threat to the business in the face of Covid-19 and the unprecedented impact this is having on the airline.”
BA CEO doesn’t take a pay cut, IAG CEO takes 20% pay cut
While British Airways CEO Alex Cruz tells employees the company is in a fight for survival, and is reducing pay for pilots, how much of a pay cut has he indicated he’ll take? Nothing so far…
Meanwhile Willie Walsh is the CEO of IAG, the parent company of British Airways. He’s the former CEO of British Airways, but got promoted to CEO of IAG several years back. He’s expected to retire this summer. Unlike Cruz he will be taking a pay cut… but only of 20%.
The story of his retirement is an interesting one as well. He was only expected to retire in a year or two, but it was suddenly announced at the beginning of the year that he’d retire earlier than expected.
No reason was really given, but last year he sold over $4 million in IAG stock to finalize his divorce, and he also allegedly has a relationship with an employee. However, the company claims that neither of those things is related to his departure.
When times are good, airline executives are the ones who benefit the most from it. When times are bad, they are also the ones who should be leading by example and taking pay cuts before anyone else.
In many cases these cuts are more symbolic than anything, since a lot of executive compensation comes in the form of bonuses and stock options, and when executives give up their compensation, it’s typically just their base salary.
It’s incredibly disappointing to see Cruz not take any pay cut before giving pilots a 50% pay cut, and to see Walsh only take a 20% pay cut.