British Airways has been mismanaging its worst nightmare scenario of the pandemic, collapsed passenger numbers, atrociously handled staff lay offs and a public relations disaster that left if facing parliamentary questions and an inquiry from MP’s.
All of that was under the watch of CEO Alex Cruz, one of the now retired IAG CEO Willie Walsh’s senior henchmen.
Cruz had been at BA for four and a half years and was ideally suited to managing an airline that was on the never ending highway of profits, and keeping its business and first class customers reasonably happy with endless upgrades and service improvements, not that they weren’t long overdue.
However Cruz’s mismanagement of the last eight months – he seemed completely out of his depth at times, and now a sharp levelling off of long term and short term bookings, even after a bargain basement sale in every class of seating suggesting a dire year ahead. Cruz has clearly had to fall on his sword and left his job with immediate effect.
His replacement is Aer Lingus CEO Sean Doyle, who is also slated to take over the job of Chairman after a transition period. he previously worked at BA for twenty years.
I have the feeling that quite a few now former employees will not mind too much Cruz has gone, but you can bet your life he didn’t leave with just statutory redundancy pay!
Malaysia on the brink
Malaysia Airlines CEO has warned that it will have to close if the already irritated lessors don’t agree to a major restructuring plan for the airline this week.
Most creditors have agreed to come on board, but the leasing companies, who are being hit left right and centre from the collapse in global aircraft demand, are facing a crisis of their own. Yet most see they have no choice. After all, what else are they going to do with the aircraft if they take them back? Nobody else wants them.
The restructure requires the Malaysian state investment company to prop the airline up with US$1.8 billion and the airline is committing to become profitable within five years and at break-even by late 2023.
However the leasing companies who own 70% of the airlines engines have said that the plan is ” inappropriately and fatally flawed”, and they’re playing hard ball over agreeing to the restructure.
If the lessors don’t agree then there is a Plan B, moving everything to a new AOC and in effect a ‘new’ airline, leaving Malaysia Airlines a rump of bad debts and bad feeling.
Etihad cuts the A380
As if the A380 hasn’t had a bad enough deal over the last few months, Etihad, which had been planning on their full reintroduction by Christmas, has said it now has no plans to reintroduce the type in the immediate future, and speculation is rife that they may now never come back.
The airline operated ten, the oldest of which is just 6.3 years and the newest just 3.8 years old. The last two are leased from Amadeo, the other eight are owned outright. It’s not without possibility that the leased pair will be off loaded, even with high penalties. It would make a lot of financial sense to do so.
Meanwhile the only airline still actively committing to its fleet of 12 is BA which said it still sees them as a valuable member of its fleet. Well it did until Cruz got kicked out – that might not be the case once Doyle conducts the inevitable fleet review.