“I’m getting ready for retirement.” Last November Willie Walsh had already warned IAG investors that his career at the helm of airlines (Iberia, Vueling, British Airways, Level, Air Europa and Aer Lingus) was reaching the final stretch. The director had two years of leeway to step aside and relinquish a successor. This term, however, has not been extended as originally proposed. The company announced on Thursday that Iberia President Luis Gallego will be taking over Walsh as CEO of the group. The Madrid manager will assume the new role from March 26, weeks after the Brexit takes effect on January 31. The departure of the United Kingdom from the European Union will usher in a new stage of obstacles for the IAG, especially in the case of an unfriendly agreement.
Gallego was one of the founders of the merger of Iberia and British Airways, which culminated in the birth of IAG. With the addition of the two companies, Antonio Vázquez relinquished the presidency of the Spanish airline to become non-executive chairman of the group. At the time, Iberia was in its fifth year in red numbers, while the British counterpart was pushing the benefits of holding. In the presidency, Gallego has, over the last six years, succeeded in reversing this situation through an aggressive cost-cutting plan that has led him to return to benefits in the second year in office. He has also sought to shield the airline as a bridge between Spain and Latin America and to retrieve historic routes to Asia such as Tokyo and Shanghai.
The so-called President of Iberia – first unveiled with Air Nostrum – also knows one of the aviation segments that has reported the most benefits to IAG in recent years. The manager was chief operating officer of the new Vueling, just after merging with Clickair, and later he laid the foundations for founding Iberia Express, the lower price brand for the former flag carrier. Spanish. The holding company now has Level, one more leg to exploit the low-cost, low-flying transatlantic flight business with the Norwegian Scandinavian.
Stage of consolidation in the airline sector
On the other hand, Gallego takes control of IAG at a time when consolidation has taken over the sector. The holding has already bought Air Europa to strengthen its race for the Latin American market in a € 1 billion transaction. In this sense, the formula for creating larger groups that are resistant to the shocks of demand and oil prices will be maintained by 2020. Corporate operations are compounded by tensions with the workforce, which during the last summer has become more intense through strikes by Iberia’s land staff at major Spanish airports.
With Walsh taking over – and waiting to know who will replace Gallego – all IAG brands and the same group will be controlled by Spanish managers, with the exception of Aer Lingus (with Sean Doyle as Irish director). delegate). For the moment the announcement has not changed the Spanish stock market and during the beginning of the day the shares of IAG increased by 1%.
Iberia leads the increase in traffic
Precisely on Thursday the group reported to the National Securities Market Commission (CNMV) the results of its operations in 2019 with a notable contribution from Iberia. Last year, IAG carried 118.2 million passengers, a growth of 4.7% in traffic, which was 7.2% for the Spanish airline. In the case of Vueling – which is predicting a more gradual evolution by 2020 – the number of passengers increased by 5.6% to 34.6 million. Level is the brand with the most growth path: it is more than doubling its traffic and already carrying 2 million passengers.