Friday 9 December 2016

Walsh may yet emerge from union battles to win war

Emmet Oliver Deputy Business Editor

Published 22/05/2010 | 05:00

Bruising industrial relations battles have defined the Willie Walsh era at British Airways, but despite seemingly endless union squabbles, the Dubliner may yet turn the airline around.

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Mr Walsh went to British Airways in 2005 and acquired the nickname "slasher Walsh" from the British press for his uncompromising stance on getting costs down. It wasn't just those at the bottom of the corporate pyramid who faced redundancy either; he also asked 600 middle and upper management staff to leave in 2007/2008.

BA has traditionally had a higher cost base than its peers and Mr Walsh has struggled to take out cost without incurring the wrath of powerful unions, among them Unite. Mr Walsh has also run into other controversies that have left him with something of a steely image.

He nearly lost his job in March 2008 when the airline moved most of its operations to Terminal 5 at Heathrow Airport. Mr Walsh found himself having to bat away calls for his resignation when the baggage system effectively collapsed and 23,000 bags went missing and 500 flights had to be cancelled.

Alliance

Despite this, Mr Walsh -- before the financial crisis -- had BA moving in the right direction with profit margins edging past 10pc and dividends being paid for the first time in years.

Since then, the company has been downgraded to junk status and turnover has remained flat. But an alliance has been built with Iberia and a fleet-renewal programme is well advanced.

The airline can take a certain amount of punishment from the strike as it has cash of more than £1.7bn on its balance sheet, even if losses are climbing fast.

But Mr Walsh will know that traffic is coming back and fare yields are improving. The airline gets 45pc of its revenue from premium traffic and that is improving in Britain and the US, so if he can see off the threat from Unite, the airline may yet recover under his watch.

Irish Independent

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