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British Airways owner's boss Willie Walsh to step down

By Justice Kofi Bimpeh
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Willie Walsh, chief executive of International Airlines Group (IAG), the owner of British Airways, has announced he is to step down.

He is set to retire as chief executive and from the board of IAG on 30 June.

Mr Walsh said it had been a privilege to have worked on the development of IAG after British Airways and Iberia were merged.

Antonio Vázquez, IAG's chairman, described Mr Walsh as one of the "main drivers" of the project.

He will be replaced by Luis Gallego, who is currently head of its Spanish division, Iberia.

Willie Walsh

Walsh was born in Dublin, Ireland. He attended his local secondary school Ardscoil Rís. At age 17 he became a pilot at Irish flag carrier Aer Lingus, joining as a cadet in 1979. He acquired a Master's degree in management and business administration from Trinity College, Dublin during his pilot years, while advancing to become a Boeing 737 captain.

He joined company management in various positions including chief executive of then company subsidiary, Futura from 1998 to 2000. He returned to Aer Lingus at that time as Chief Operating Officer (COO)

In October 2001 Walsh was elevated from COO to CEO, succeeding Michael Foley who had resigned following a harassment complaint. The carrier was in financial difficulty. Walsh eliminated 2,000 staff positions, reduced the number of aircraft types and sold non-core assets, including an art collection at the company headquarters. He reconfigured Aer Lingus as a low-cost airline in imitation of Ryanair, and began withdrawing from various services like short-haul Business Class and cargo services, and severely restricting the airline's frequent-flyer programme, TAB.

The company operating profits rebounded, but the cost of the write-offs and redundancies meant that net profitability was not as quick to recover. Not all of Walsh's reforms were successful, such as the outsourcing of aircraft cleaning. The contracting had not been agreed with Aer Lingus unions which led to large payments to the private contractor while Aer Lingus employees did the cleaning work. A three-day lock-out occurred in 2002 during the peak of the cutbacks.

The management team suggested to the principal shareholder, the Irish Government, a float of Aer Lingus on the stock market. Stock floats are often rewarding to top management and this was opposed by the unions who feared a privatised Aer Lingus would impose even tougher working conditions. The Government eventually turned down the float and this led to Walsh and other management executives resigning from the company in January 2005.

The Taoiseach Bertie Ahern subsequently described Walsh's offer of an MBO as "a time when management wanted to steal the assets for themselves through a management buy out, shafting staff interests.".[6]

Dermot Mannion, formerly of Emirates, succeeded Walsh as Aer Lingus chief executive officer.

Source : BBC