BRITISH Airways is not noted for giving much away in its press releases, but a very terse 40-worder earlier this month told rather more than was intended.
The release entitled ‘US litigation solved’ looked newsworthy enough but contained nothing apart from saying BA and US Airways have settled their differences.
The dispute stemmed from BA choosing American Airlines for a global alliance in 1996 instead of former partner USAir, now US Airways. The chairman of US Airways Steve Wolf, a veteran of the aviation industry, with stints at United Airlines, American Airlines, Continental Airlines and Pan Am, proceeded to wage a four-year legal battle with BA.
Wolf accused BA of breaking contracts and the US’s anti-trust laws, even naming senior BA managers in legal documents.
Strange then, that neither side wanted to claim victory following the lengthy case.
Well, maybe not so strange given that Wolf is the one person whose name keeps cropping up in discussions with industry experts on who is to replace Bob Ayling as BA chief executive.
The timing of the litigation press release coincided with BA chairman Lord Marshall finally deciding that Ayling had to go.
Wolf certainly has the pedigree to head troubled BA after 34 years in aviation.
Significantly, he has the backing of City analysts – a crucial bunch if BA’s share price is to climb – who claim BAneeds a complete overhaul to restore confidence.
ABNAmro’s analyst Andrew Monk said: “I would certainly say buy shares if Steve Wolf was made chief executive.”
BA is expected to appoint from outside the airline to ensure it is not accused of continuing Ayling policies. Other potential candidates include Qantas chief executive James Strong and media company Pearson’s chief executive Marjorie Scardino.
Strong knows BA well, having been at the Australian carrier since it formed an alliance and sold a 25% stake to BA.
Scardino is a less likely tip but fits well as a high-profile UK industry executive.
Internal BA choices have centred on three people.
Commercial director Carl Michel is the hot tip having taken over the demanding role last year ahead of expected choice, and now Thomson chief executive, Charles Gurassa; Go chief executive Barbara Cassani is respected and has served BA diligently; and Mike Street, the director of customer service and operations, has staff support having worked hard to settle the 1997 cabin-crew strike.
Although BA is claiming it’s business as usual, a new chief executive is sure to make changes (see Comment on this page).
BA’s policy of going for business-class passengers and axing travel agents’ commission will be reviewed. There is also speculation that Go may be transferred into a short-haul feeder airline for BA.
If BA does choose its old adversary Wolf, the irony will not be lost on the American.
As Ayling commented as he officially opened the BALondon Eye knowing he would fall on his sword within 24hrs: “What goes around, comes around.”
Steve Wolf – US Airways chairman. Been at the former BA partner airline since 1996. Previously chairman and chief executive at United Airlines. Has also served with American Airlines, Pan Am and Continental Airlines. Top outside choice by City analysts.
James Strong – Qantas chief executive. Joined the Australian airline in 1991. Instrumental in setting up alliance with BA on the ‘Kangaroo route’. Rated a strong choice, but believed to be unconvinced by the role.
Carl Michel – BA commercial director. Moved to BA from subsidiary Deutsche BA, where he was chief executive, last year. Rated the top internal BA choice. Liked by staff and considered to be willing to listen. At only 35, his age may count against him.
Barbara Cassani – Go chief executive. Has held positions with BA in the UK and in the US since the 1980s. Made Go’s boss when the low-cost airline was set up in 1997. Highly thought of, although the position may have become vacant too early.
Mike Street – BA customer services and operation director. Spent almost his entire career at BA. Sorted out the highly damaging cabin-crew strike in 1997. Also liked by staff. Rated an outsider among the internal candidates.
Marjorie Scardino – Pearson chief executive. Joined the global media group in 1997. Considered a long shot among the outside tips but is well respected and would give BA an inside track into a fresh, much-needed, media image.