RUTH SUNDERLAND: Disaster that left BA worth less than Just Eat

RUTH SUNDERLAND: The way BA pressed the ejector button on boss Alex Cruz lays bare disaster that has left it worth less than Just Eat

The unceremonious way British Airways has pressed the ejector button on its boss Alex Cruz is a sign of just how desperate the situation is at our national airline.

Mr Cruz is paying the price for the pandemic – and for presiding over the most toxic period in BA’s industrial relations in recent memory.

That is saying something, when one reflects on the litany of industrial disputes his predecessors at BA have endured over the past three decades.

His exit was greeted with undisguised glee by union officials, who accuse him of masterminding the worst attack on employees in the history of the company.

Whatever the truth of that, his confrontation with Unite and the GMB over 12,000 redundancies and pay cuts for long- standing staff earlier this year escalated with spectacular venom.

The unceremonious way BA has pressed the ejector button on its boss Alex Cruz (pictured with the Queen last year) is a sign of just how desperate the situation is at our national airline

In its campaign, Unite projected ‘BA Betrayal’ slogans at night-time on landmarks including the Angel of the North and Harrods in London.

Unfortunately for Mr Cruz, it was not just the unions who had him in their sights.

Criticism also came from unusual quarters including the Conservative chairman of the transport committee, who described the BA job cuts as a ‘national disgrace’.

Early in his five-year reign, Mr Cruz performed well, delivering record profits – but he also made other mistakes.

He presided over the IT meltdown in 2017 that left 75,000 passengers stranded. To the disgust of some passengers, he also axed the free food on short-haul flights. Luis Gallego, the new chief executive at IAG, the Anglo-Spanish giant that owns BA, certainly lost no time in ousting Mr Cruz when he took the helm last month.

His successor Sean Doyle will have his work cut out to navigate the airline through its troubles. BA, which celebrated its centenary last year, has survived two world wars but coronavirus is by far the biggest peacetime crisis it has ever faced.

His successor Sean Doyle will have his work cut out to navigate the airline through its troubles

The virus brought air travel to a standstill, leaving empty skies and planes marooned. With revenues from ticket sales slashed to a fraction of normal income but debts and bills still having to be paid, BA has been burning cash at a rate of £20million a day.

Such is the scale of the crisis that BA has even been reduced to selling off the art from the first-class lounges: a Bridget Riley, Cool Edge, fetched £1.875million at a Sotheby’s online sale. That sum makes barely a dent in the losses, which came in at more than £700million for the second quarter of this year, dwarfing the red ink from 9/11 and the financial crisis. The company has taken advantage of Bank of England loan cash, swelling its considerable debt pile and it has raised £2.5billion from shareholders including the Qataris.

Ignominiously, BA’s parent group is now valued at several billion pounds less on the stock market than takeaway delivery operator Just Eat. So much for the self-styled world’s favourite airline.

BA’s parent group is now valued at several billion pounds less on the stock market than takeaway delivery operator Just Eat (file photo)

Yet the UK Government, unlike the French, Germans and Americans, has declined to offer a bailout to BA or other airlines here.

Any hopes of recovery are being stymied by the fiasco over airport testing and the failure so far to open a corridor with the US so vital transatlantic routes to resume.

So, however Alex Cruz may be lambasted by disgruntled staff or blamed by IAG for failing to bring the union hardmen to heel, making him a scapegoat will not ease BA’s predicament.

For our flag carrier to revive, and for our future as an open trading economy post Brexit, the Government needs to get Britain flying again.

British Airways chief executive heads for the departure lounge as he’s axed after four years of turbulence as the nation’s flag carrier

By Tom Payne Transport Correspondent

The chief executive of British Airways is stepping down following a turbulent four years in charge of the nation’s flag carrier.

Alex Cruz, 54, who has been with BA since April 2016, has been ousted as part of a shake-up to help the airline navigate the worst crisis in its history.

During his time in charge, BA has suffered major IT failures, customer data leaks and highly damaging pilot strikes.

The airline has also faced criticisms for cost-cutting measures, including the decision to replace free food and drink with buy-on-board menus on short-haul economy flights.

The changes have been blamed for denting the prestigious BA brand, putting it on a par with low-cost budget airlines. Mr Cruz’s tenure culminated in MPs branding the airline a ‘national disgrace’ for its treatment of 12,000 staff laid off during the pandemic.

Luis Gallego, the new chief executive of IAG, is thought to be behind the major shakeup

BA’s parent company, the International Airlines Group, said Mr Cruz will be replaced by Sean Doyle, the boss of Irish airline Aer Lingus, another IAG business.

Brian Strutton, general secretary of pilots’ union Balpa, said yesterday: ‘I hope this heralds a new dawn which sees BA behaving like the proud flag carrier airline it should be.

‘Mr Cruz has been in the departure lounge for some time. He was given a remit to cut costs and found it impossible to do that without alienating BA passengers and employees alike.’

IAG chief executive Luis Gallego thanked Mr Cruz for ‘modernising’ the airline, adding: ‘He has led the airline through a particularly demanding period and has secured restructuring agreements with the vast majority of employees.’

Last month, Spanish-born and American-educated Mr Cruz told the Commons transport committee that BA is ‘fighting for our own survival’.

However, the committee accused him of presiding over ‘the wanton destruction of a loyal workforce’ by laying off a quarter of staff while drastically reducing the pay and benefits of those that do survive the cull.

Under the so-called ‘fire and rehire’ policy, long-serving staff were facing cuts of up to 70 per cent.

However, in a climbdown last month Mr Cruz said staff would not be issued with new contracts on reduced terms.

Coronavirus has left BA operating around a quarter of its schedule and burning through around £20million every day.

Mr Cruz will remain at BA as non-executive chairman for a transition period until Mr Doyle also takes on his role.

Nadine Houghton, of the GMB union, said: ‘Alex Cruz presided over the worst attack on BA employees in the history of the company. He is now the scapegoat for BA’s catastrophic threat of fire and rehire.’

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