Luis Gallego, new IAG boss, takes the helm next week as the airline industry goes through the biggest crisis in its history.
Spaniard Luis Gallego will succeed Willie Walsh as the group’s chief executive at the annual meeting in Madrid on Tuesday. At the same time, investors will vote on the company’s plan to raise £ 2.5 billion, a move that has already won backing from its largest shareholder Qatar Airways. A motion to approve an £ 883,000 bonus for Walsh at the meeting, however, could ignite tensions. The Institutional Shareholder Services Advisory Group said it should be rejected.
IAG seeks to shore up its struggling finances as the industry struggles to survive the Covid-19 pandemic and border lockdowns that have blocked flights around the world. Shares are down 65% this year. The group has already cut costs at British Airways, with 12,000 jobs poised to disappear and new mandates for some long-time employees, creating a bitter conflict with the unions.
Gallego, 52, is managing director of Spanish airline Iberia, which is also owned by IAG along with Aer Lingus and Vueling. He will now have to pull the company out of the depths of the worst recession to ever hit the airline industry. Former pilot and negotiator, Walsh, 58, created IAG by bringing British Airways and Iberia into the modern era of low budget flying, taking a tough stance on unions, and cutting costs to create a group that for years has surpassed its traditional European peers.
Gallego took charge of Iberia in 2013 and has been credited with the successful transformation of the Spanish airline. His task will now be to reduce group costs at IAG while managing the degraded relations with unions and politicians and by intensifying the battle with its low-cost rivals, Ryanair and Easyjet.