BA owner IAG suffered a significant shareholder revolt on Tuesday over plans to pay outgoing chief executive Willie Walsh and other executives large bonuses even as it struggles through the worst crisis in its history. A fifth of voting shareholders voted against the company’s pay report, which includes a bonus of GBP883,000 for Walsh for his work in 2019, as part of a total package worth just under GBP3.2m. Influential shareholder advisory group ISS had urged investors to vote against the packages at the group’s annual meeting, arguing there was “ample evidence” the industry was about to face turbulence when they were announced. IAG executives have since taken pay cuts as part of a cost-cutting drive. IAG said it was “disappointed” that just over 20% of shareholders voted against the pay award. “The board will continue to engage with shareholders to fully understand their concerns,” it said. Walsh told shareholders on his final day as CE: “Aviation has been decimated by the impact of the pandemic, resulting in substantial losses for the global industry. It is the worst crisis we have ever faced.” Walsh handed over to Luis Gallego on Tuesday, a company insider who ran Spanish flag carrier Iberia for almost seven years. The Spaniard will have to chart a course through an uncertain winter as Covid-19 cases rise and the company downsizes itself to reflect the impact of the pandemic. IAG is also in the process of renegotiating its E1b deal to buy Air Europa, which it expects to go through in the next six months. “My goal is to ensure that IAG adapts to the ‘new normal’ in aviation,” Gallego said.<br/>
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Luis Gallego faces tough challenges right out of the gate. The new CEO of BA parent IAG must decide on job cuts, an uncertain takeover deal and the future of once-lucrative long-haul routes, in an aviation world laid waste by the coronavirus crisis. The Spaniard succeeds Willie Walsh, who created IAG through the purchase of Iberia by BA in 2011. Just recently, Walsh announced 12,000 job losses at BA in response to the pandemic. But the Irishman has left some key decisions open, giving Gallego a chance to show he’s learned from the consummate cost cutter. “He has been my natural successor for several years,” Walsh said of Gallego prior to standing down at IAG’s annual investor meeting Tuesday. At the same time he warned of the challenges ahead, saying each group airline must shrink its size and cost base to compete in a “decimated” market. Walsh said other issues including the role of IAG’s Level arm, which is being refocused on its original business of providing cheaper long-haul flights out of Barcelona. IAG Chairman Antonio Vázquez said the acquisition of Air Europa, which the company is looking to renegotiate following the collapse in global demand, could come later this year or early 2021. Shareholders at the meeting approved a key E2.75b rights offering backed by No. 1 investor Qatar Airways. The measure drew 99% support, IAG said. Gallego, 51, held various posts at Spanish airlines before joining IAG. He later led Iberia’s regional arm before becoming CEO in 2013. IAG’s leadership change extends the increasingly Spanish dominance of IAG at executive level, with BA, Iberia and Level run by countrymen of Gallego. Vázquez will be replaced by Javier Ferrán, another Spaniard, when he retires in January.<br/>
IAG said Tuesday it had obtained the necessary approvals to continue flying if no free-trade deal is agreed between Britain and the EU. “In compliance with the European Union connectivity regulation last year our airlines submitted their plans on ownership and control to the respective national regulators in Spain and Ireland,” Chairman Antonio Vazquez told the group’s AGM in Madrid. “We’re delighted to announce that regulators confirmed that these plans in case of a hard Brexit do comply with European Union connectivity regulations.”<br/>
American Airlines will let employees wear Black Lives Matter pins on their uniforms, calling it a matter of equality and not politics. With the move, American joins Starbucks, Delta and other major companies that let employees wear items supporting the movement that protests police violence against Blacks. An American Airlines spokeswoman said Tuesday that Black employees saw workers at other airlines wearing a Black Lives Matter pin and asked if they could too. “Fundamentally, we believe Black Lives Matter is an expression of equality, not a political statement,” said the spokeswoman, Sarah Jantz. “It doesn’t mean other lives don’t matter, rather that in our society Black lives should matter and be valued the same as others.” American is working with Black employees to design the pin. The airline allows other pins including ones supporting Christians, veterans and LGBTQ people.<br/>