High hopes for pilot Walsh as new head of BA

Michael Smith, Reuters/London

Willie Walsh, a former pilot who jettisoned the art collection of Ireland's national airline to help save it, will be targeting more excess baggage when he takes the helm at British Airways.

At only 43, the straight-talking Irishman was fast-tracked into one of world's top aviation jobs on Tuesday when he was named as the new boss of Europe's second-largest airline.

Until January, Walsh was chief executive at state-run Aer Lingus where he slashed jobs and helped reposition the firm as a low-cost carrier following its brush with bankruptcy in 2001.

"He was responsible for the turnaround of Aer Lingus and quite a lot of that was actually streamlining and cost cutting the organization. Someone with that experience is going to fit in (at BA), because there's a lot more to do," said Exane BNP Paribas analyst Nick Van den Brul.

Walsh, who joined Aer Lingus as a cadet pilot at 17, once famously said he would sell the paintings off the wall to salvage the company. He was as good as his word.

A month after his appointment to the top job in 2001, the airline raised US$503,000 by selling off the cream of its corporate art collection.

British Airways shareholders will be expecting similar things from Walsh when he takes over from Rod Eddington, an outspoken Australian who is also credited with steering his company through turbulent times.

Analysts say Eddington, who axed 13,000 jobs at BA, will be a hard act to follow but are impressed by Walsh's track record despite his relative youth.

Walsh was a teenage pilot in 1979 who worked his way through the ranks at Aer Lingus to captain by 1990.

He was appointed chief of Aer Lingus' charter airline in Spain, Futura, in 1998, and returned to Dublin as Aer Lingus Chief Operating Officer in 2000.

Walsh became Aer Lingus Chief Executive a month after the September 2001 attacks on the United States which resulted in a global downturn in travel and sent many airlines bankrupt.

He reacted with a radical program that cut 30 percent of the airline's costs and laid off one-third of its 4,000-strong workforce. The airline survived.

He and two senior executives resigned late last year after differences with the Irish government about the airline's future direction. Walsh was said to be frustrated about finding new sources of funding to invest in a long-haul fleet.

Originally scheduled to leave Aer Lingus in May, Walsh and his management team finished work at the end of January, but denied they were hurried out by reports they were planning to set up a rival carrier.

Walsh, who received a flood of different proposals from several continents after his resignation, may even have been surprised to get a position as senior as Eddington's.

When asked about his interest in the BA job last month, Walsh modestly said he'd have to take such an offer seriously if it came along.

Walsh will be the second Irishman to head a major European airline alongside the feisty chief of Dublin-based low-cost giant Ryanair, Michael O'Leary.

Described as frank and less of a showman than O'Leary, Walsh's knowledge of Ryanair may also be invaluable to BA which has had to cut fares due to competition from low-cost airlines.

Analysts say Walsh wisely steered Aer Lingus away from head-to-head competition with Ryanair during his tenure.

"I think for BA to get somebody like Walsh, who has been having to deal with the likes of Ryanair as a state carrier, is positive," said Joe Gill, analyst at Goodbody Stockbrokers in Dublin.

Walsh's big test will be how he deals with unions at BA which may face more job cuts as it continues to battle high fuel costs and lower ticket prices.

"He was helped by the fact that post 9/11 the world was in disarray so he was able to push forwards quite strong changes (in Aer Lingus). That might be more difficult in a stable environment," Gill said.

Tackling trans-Atlantic travel, BA's most important market, will also be a crucial role ahead of an expected liberalization of travel between Europe and the United States.

Walsh, married with a daughter of nine, will take the reins in September when Eddington retires to his native Australia.

(Additional reporting by Jodie Ginsberg in Dublin and Mark Potter in London)

REUTERS

GetRTR 3.00 -- MAR 8, 2005 23:59:30