IAG’s new Spanish CEO has tough choices to make back home

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/>