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Axe man Cruz was never going to survive the post-Walsh era at BA

Alex Cruz was sent in to wage war on British Airways' costs – but the battle may have cost him dear in the race to succeed Willie Walsh

“Didn’t he do well,” one of Alex Cruz’s team said to me last month after his appearance in front of parliament’s transport committee. 

The remark was an assertion, but it really should have been a question.

True, Cruz had not completely stuffed up. He had taken the “firing and rehiring” of staff – a threat to move British Airways employees to inferior terms in response to Covid – off the table. He made this revelation early on in his grilling, giving the Westminster committee the win they were looking for.   

But otherwise it was a rather dull affair. Well-rehearsed contrition contrasted sharply with the kind of forthright rebuttals politicians had been accustomed to from his erstwhile boss, Willie Walsh. 

Alex Cruz (left) and Willie Walsh

Cruz’s first appearance in front of the influential group of MPs on behalf of BA will not be repeated. The 54-year-old steps down today, drawing a line under a turbulent four years “running” the nation’s flag carrier, to be replaced by Aer Lingus chief Sean Doyle. 

In 2016 Cruz was hired by Walsh, boss of IAG, BA’s FTSE 100 parent organisation, as “chief executive and chairman”. It was a curious title. Why? Because in many ways he was neither.

“Slasher Walsh”, a moniker that had stuck with IAG chief since his days running Aer Lingus in the early noughties, needed an enforcer. And Cruz, who knew a thing about cost control after running Spanish budget carrier Vueling, was just the ticket.

He wasted little time getting to work. Within a month he culled free inflight meals on short-haul flights

Apparently nobody wanted them, BA’s research had found. But customer uproar suggested otherwise. At the very least, passengers wanted the option to choose whether or not to eat a tired-looking egg and cress sandwich or sip a gin and tonic on the 6.30am from Heathrow to Edinburgh.

Meanwhile, savings could be found by outsourcing BA’s computer systems to India – much to the chagrin of the 700 UK staff who lost their jobs.

It was a decision backfired spectacularly within months. In May 2017, the airline's systems went down, prompting more than 1,000 flight cancellations during one the UK’s busiest travel weekends of the year.

This was not down to what staff had called a “slash-and-burn management style” but a “power supply issue”, the airline insisted.

In 2018, the computer said “no” again. This time, hackers diverted customers to a fraudulent website and pinched details from 500,000 of them

The carrier brushed off assertions that it had under-invested in technology. Cruz said: “BA.com has been operating for nearly 23 years. During that time we have never had any breaches like this. It shows the commitment to data integrity in the company."

While IT failures marred the first part of Cruz’s tenure, it was his approach to employee relations that will be best remembered by BA’s 40,000 or so staff.

BA’s wage bill was a mess. Paying cabin crew £70,000-a-year or more was not feasible when competing with Ryanair or Norwegian. 

Meanwhile, pilots needed to realise that the glory days of air travel, and the perks that went with it, were over. One is my brother; plenty of others live near me within sight of Gatwick airport. Trying to convince them that flying was now a matter of getting passengers from A to B did not go down well. Neither did waving goodbye to five-star hotels, long layovers, final salary pensions and inflation-busting salary rises. 

Although cabin and ground crew agreed to a new pay deal last year, increasingly caustic relations culminated in the first-ever pilot strike last autumn. It marred what was supposed to be a celebration – the airline’s centenary in 2019.

Then Covid hit. Targeting 10,000 job cuts, Cruz managed to convince the pilots of the severity of the situation. Getting Unite, which represents cabin and ground crew, on side proved a tougher task. Cruz was at the centre of allegations of betrayal, not just from staff but also MPs and even celebrities. 

The figures don't lie: Cruz has been successful in making BA a leaner organisation. In 2016, BA spent almost 66p for every pound of revenue it earned. Three years later it had fallen to 61p. 

And remarkably, pay still went up. In 2016, employee costs totalled £2.4bn across 43,874 staff, an average salary of £55,702. In 2019, the bill was £2.5bn across 42,322 – equivalent to an average of £59,756 each.

Based on these figures Cruz has some reason to feel hard done by and may well walk away from BA wondering what might have been. 

He was seen as the heir apparent at IAG with Walsh's retirement on the horizon. But he has been outflanked, even as he was doing the Dubliner’s bidding.

His former number two, finance chief Steve Gunning, has leapfrogged him onto the parent company board. Meanwhile, when Walsh announced he would step down earlier this year, it was Luis Gallego of Spanish flag carrier Iberia – an airline that takes a third of BA’s revenue and makes a quarter of its profit – that was picked as his replacement.

Given his remit, perhaps it was foolish to think that Cruz would succeed Walsh. There was always likely to be collateral damage from his reforms. In many ways, Cruz's failing was to not realise he was on a hiding to nothing.