Interview: IAG CEO on Low-Cost Competition and Passenger Experience
Photo Credit: Willie Walsh is so unafraid to make tough decisions that he once earned the nickname "Slasher Walsh." International Airlines Group
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Willie Walsh is not afraid to make decisions that anger employee unions and disappoint some passengers. That may seem like poor strategy, but it's a big part of the reason that International Airlines Group is in better shape than most of Europe's other airlines. Sometimes, an executive must make unpopular decisions to ensure the long-term success of a business.
Future of Passenger Experience
To better understand the challenges facing airlines in an age of fluctuating oil prices, rapid growth, and changing passenger expectations, our Future of Passenger Experience series will allow leaders in the industry to explain their best practices and insights.Years ago, Willie Walsh earned one of the more unusual nicknames in the airline industry.
After he drove to remove costs at Aer Lingus, the Irish carrier he led from 2001 to 2005, some called him, 'Slasher Walsh.'
It's a nickname he probably deserved, after cutting 2,000 jobs on his first day as CEO, ending unprofitable routes, and squeezing revenue from every asset he could — even selling the company's art collection. But considering the rough fiscal shape Aer Lingus was in, his moves were probably necessary. Had Walsh not remade Aer Lingus, the airline could have gone out of business.
Walsh, now CEO of International Airlines Group, the European company that owns British Airways, Aer Lingus, Iberia, and the Spanish low cost airline, Vueling, remains unafraid to make decisions unpopular with unions and passengers, so long as they make sound financial sense. Airlines, he has said, must adapt, or they will die.
Before taking over IAG, Walsh was CEO at British Airways, where he deftly (and sometimes combatively) took on the carrier's unions, ensuring it could compete with discounters like EasyJet and Ryanair. He made unpopular decisions, like cutting staff and withholding raises, but his choices helped the airline fight incursion into its markets. Walsh avoided making many of the same mistakes as Air France, which still has not implemented a cohesive strategy to compete with low-cost airlines, partly because of opposition from its employee unions.
Now, as head of the company that owns four carriers, Walsh is a little less involved in the day-to-day functions of running an airline. But he remains committed to cost cutting and efficiency. Not long ago, for example, British Airways announced it would stop providing free meals on short-haul flights, as it has for decades. It's a move Walsh supports.
Walsh is also a proponent of further European airline consolidation, arguing the region has too many weak players. Some airlines, he has said, could be targets for IAG — at the right price.
We interviewed Walsh on Nov. 10 in New York City to discuss issues facing IAG, including political changes in the UK and United States, competition from low-fare airlines, and changes in passenger expectations.
Note: This interview has been edited for length and clarity.
Skift: Thank you, Willie, for joining us. I'll start with
