No retreat for 'Slasher Walsh': IAG airline boss to keep cutting costs
LONDON: Once dubbed "Slasher Walsh" for his relentless drive to cut costs, the boss of British Airways-owner IAG is showing no sign of going soft.
Willie Walsh (54) has built his reputation on his refusal to give ground to unions and a willingness to wield the axe at former state-owned airlines, convinced it's the only way to stay competitive in an era when budget carriers increasingly rule the roost.
It is a testament to his success that while IAG lags Lufthansa and Ryanair in terms of passenger numbers, it is expected to report more operating profit for 2015 than those carriers or any other European rival.
Sporting a close-cropped haircut as he spoke to industry delegates at a conference in January, ahead of the five-year anniversary of the formation of IAG, he said there would be no let-up in his mission.
"Hence the reason for my haircut - that's the theme for 2016, it's all going to be about cutting costs," said the Irishman, who encourages a focus on financial results by telling staff "show me the money".
Walsh's strategy over the past 15 years has also been marked by an aggressive M&A policy as he sought to prevail in what he once described as a "fight for survival".
As CEO of British Airways (BA), he lined up a merger with Spanish carrier Iberia in 2011 to create IAG, which in turn snapped up Britain's BMI, Spain's Vueling and Ireland's Aer Lingus.
Once again, Slasher Walsh signalled there would be no retreating from this strategy for IAG, even should he follow through on his once-stated plan to retire at 55.
"There's lots more deals for IAG to do, but whether I do them or someone else ... It doesn't matter when I go or if I go, there'll be someone there to replace me," Walsh added on the sidelines of a conference in Dublin this month.
'ZERO TIME FOR TITLES'
A pilot from the age of 17, he rose to become CEO of Aer Lingus in 2001, taking over just when the 9/11 attacks crippled global travel demand. It was there he formed the template for his strategy, when he had a front-row seat to the rapid expansion of budget airline Ryanair as its neighbour at Dublin Airport.
He soon earned the Slasher Walsh nickname for the job cuts he made at the Irish carrier before he was hired to become boss at BA in 2005 where his skills were put to the test when the global financial crisis also dampened demand for travel.
He cut BA staff and froze pay, despite 18 months of bitter industrial dispute, and after the 2011 merger with Iberia, he embarked on a similar battle at the loss-making Spanish carrier.
"I was really sceptical how that was going to work out with the (Iberia) unions, and he got that all through," said one top-30 shareholder in IAG, who declined to be named.
When Iberia workers went on strike in Madrid, waving flags saying "British Go Home", a bullish Walsh declared he would see off the protests, telling the media: "I've done it before and I'll do it again."
"This is an all too rare example of an airline management team setting a clear path and sticking to it, in the face of strong opposition from unions," said Jonathan Wober, the CAPA Centre for Aviation's chief financial analyst.
While he can be tough Walsh is also pragmatic, said Jack O'Connor, president of Aer Lingus's largest union, SIPTU.
"Like most employers I'd say he'd prefer not to deal with us but he's not ideologically opposed to making deals with trade unions ... That's not to say that he's easy to deal with," he said.
Slasher Walsh showed similar single-mindedness during the Icelandic ash cloud crisis in 2010, when he ordered full Britain-bound BA planes to take off from the east coast of the United States and Canada, even though UK airspace was still closed to landings.
It was a risky bet, but with BA losing millions of pounds a day due to grounded planes, he wanted to pressure authorities to quickly revise a decades-old safety code to reflect new tests that had shown flying through a certain concentration of ash was possible without damage to aircraft.
The gamble paid off - the authorities changed the rule in the nick of time and his planes were able to land in London, rather than resort to back-up destinations, such as Ireland's Shannon.
One adviser, who worked with Walsh on one of his takeovers, said the ash cloud episode showed how ruthless he could be to achieve his goals. But he added he could also use charm and diplomacy to navigate political and union tensions when needed.
"It helps that he has a huge appetite for work while being able to relax outside of it," the adviser, who declined to be named, said of Walsh, a Liverpool soccer club fan.
"He tends to eschew the pomp and ceremony of leadership and instead wears his no-nonsense approach to business with pride. He has zero time for titles."