British Airways chief executive Alex Cruz is to step down from the role, the airline’s parent company IAG said.
He will be replaced by Aer Lingus chief executive Sean Doyle.
IAG chief executive Luis Gallego said: ‘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.
‘I want to thank Alex for all that he has done at British Airways. He worked tirelessly to modernise the airline in the years leading up to the celebration of its 100th anniversary.
‘Since then, he has led the airline through a particularly demanding period and has secured restructuring agreements with the vast majority of employees.’
The coronavirus pandemic has caused carnage at BA, which in April announced plans to cut up to 12,000 jobs, 30 per cent of its global workforce.
Mr Cruz defended the job cuts last week and said the pandemic has left the national carrier ‘fighting for survival’.
British Airways chief executive Alex Cruz (left) is to leave his role, the airline’s parent company has confirmed. He will be replaced by Aer Lingus chief executive Sean Doyle (right)
He stressed that ‘people need to get flying again’ if the company is to emerge through the winter and weather the ‘worst crisis in its 100 years of history’.
BA boss warns of ‘airline bankruptcies’ if slot relief is not extended
There will be airline bankruptcies and thousands more job losses if a waiver requiring airlines to use airport slots is not extended, British Airways chief executive Alex Cruz has warned.
‘I suspect that if that slot relief is not provided for the winter season we will have a number of airline bankruptcies and there will be many, many thousands of jobs that will be lost, in addition to the jobs that have already been lost,’ Mr Cruz told MPs.
He said he was not contemplating that scenario because reports from the European Union were encouraging that the waiver of the requirement that airlines use 80 per cent of their take-off and landing slots would be extended until March 2021.
But he told MPs that many would-be customers are still cautious about travelling for fear their holiday destination will suddenly be brought on to the government’s quarantine list.
Passenger numbers have nosedived and in the first week of September the airline only flew 187,000 passengers, compared with almost a million the same week last year.
The slump in flights – roughly a quarter are operating – is causing BA to burn through £20million a day and has led to a jobs bloodbath.
Mr Cruz’s removal from his position comes as it was revealed that Heathrow’s passenger numbers were down 81% in September.
Just 1.3 million people travelled through the west London airport last month, compared with 6.8 million in September 2019.
More than half of the passengers who used Heathrow last month were flying to or from the European Union.
Heathrow said long-haul business travel continues to be restricted by international border closures and ‘a lack of testing’ for Covid-19.
Last week, the Government unveiled a taskforce to develop a coronavirus testing system as a potential way of easing quarantine restrictions for arriving passengers.
Heathrow chief executive John Holland-Kaye said: ‘The Government’s Global Travel Taskforce is a great step forward, but needs to act quickly to save the millions of UK jobs that rely on aviation.
‘Implementing ‘test and release’ after five days of quarantine would kickstart the economy.
‘But the Government could show real leadership by working with the US to develop a common international standard for pre-departure testing that would mean that only Covid-free passengers are allowed to travel from high-risk countries.’
Mr Cruz previously said: ‘Fewer passengers means fewer flights, and fewer flights means fewer people required to actually service them.’
In April, British Airways announced plans to axe up to 12,000 jobs, representing nearly 30 per cent of its workforce.
On September 16, Mr Cruz revealed that 7,200 employees have already left the company, and said the final amount out of redundancies would likely be around 10,000, although this could be greater.
Appearing before the Commons’ Transport Select Committee, he said: ‘As CEO of British Airways, I have to take responsibility. I cannot ignore the situation. I had to act incredibly fast.
The boss of British Airways has defended his decision to cut up to 12,000 jobs and said the pandemic has left the national carrier ‘fighting for survival’
‘I deeply, deeply regret that way too many loyal and hardworking colleagues of mine are having to leave our business, and I understand why MPs are concerned.’
Mr Cruz said he had ‘very difficult and yet very constructive’ meetings with pilots’ union Balpa, which resulted in a package being agreed on job and pay cuts aimed at avoiding a larger number of redundancies.
But he added: ‘This is an impossible situation. We’re having to make incredibly difficult decisions as a consequence of this pandemic and it is really only because of Covid-19 that we have had to go through such deep restructuring.
‘I have to make these difficult decisions at this time but I am completely dedicated and focused on protecting those nearly 30,000 jobs of those British Airways colleagues that will remain within the business.’
Key numbers underpinning BA’s ‘worst crisis in 100 years’
Jobs: BA announced around 12,000 redundancies, but the estimate now is closer to 10,000 – 7,200 have already left.
Passengers: Mr Cruz announced that last week, BA only flew 187,000 passengers, compared with almost a million the same week last year.
Flights: BA is currently operating only 25-30 per cent of its flights.
Funds: Mr Cruz said BA is burning through £20million a day.
Pay: Mr Cruz revealed his own financial package to the MPs, and said he took home £805,000 last year in salary, benefits and pension. He added he had taken a 33 per cent pay cut, and his top team a 20 per cent pay cut.
The chief executive, whose fleet was mostly grounded during the pandemic, said his mission objective was the survival of Britain’s flagship airline.
Not mincing his about the precariousness of BA’s future, he said: ‘The main focus at the moment is to survive.
‘We must make it through, then we must be able to compete effectively and make it through the recovery cycle… people need to get flying again.’
Laying bare the uphill struggle to revive BA’s dire financial fortunes, he said: ‘We ended up last year, British Airways, with £2.6billion in cash.
‘At the end of June we had £2.1billion in cash. We’ve been burning approximately an average of £20million of cash per day.’
Mr Cruz also told the MPs that BA had processed 2.1million refunds and 1.6million vouchers for customers whose flights had been cancelled.
Mr Cruz revealed that he had taken a 33.3 per cent pay cut, and his top team a 25 per cent cut.
Last year, the boss made £805,000 in salary, benefits and pensions, he said.
But Mr Cruz’s efforts could be thwarted by a nervous public who he claimed are avoiding trips abroad for fear of having to quarantine.
He said: ‘People are still afraid of travelling. Of course, we are having weekly changes, as you know, to the quarantine list.
‘We don’t have a testing solution yet. And still our customers are paying APD (air passenger duty) even just to fly on domestic regional flights.
‘So the overall situation is quite challenging, and this is why we are taking every measure possible to make sure that we can actually make it through this winter.’