The parent company of British Airways and Spanish flag carrier Iberia has been forced to deny reports that group chief executive Willie Walsh is set to retire over an office romance with an employee in the company’s finance department. International Consolidated Airline Group (IAG) unexpectedly announced Thursday that the 58-year old Irish aviation executive would retire later this year, saying he had made the decision to leave the company.
Walsh is set to stand down from his role on 26th March and then fully retire on 30th June 2020. Only a couple of months ago, Walsh told investors he planned to quit IAG before his 60th birthday on October 25, 2021, but the suddenness of his departure has taken many by surprise.
Known as ‘Slasher Walsh’ from his time at Aer Lingus when he embarked on an aggressive cost-cutting programme which included mass redundancies, he went on to join British Airways as its chief executive in 2005. In 2011, when British Airways and Iberia merged, Walsh became group chief executive at the parent company which is headquartered in Madrid but listed on both the Madrid and London stock exchanges.
Walsh has since turned the airline group into one of the world’s largest aviation powerhouses which now includes his former employer Aer Lingus, Spanish low-cost carrier Vueling and the budget brand LEVEL.
But while some companies would take a very dim view of senior executives embarking on relationships with their employees, IAG told the Sunday Times (pay wall) that this wasn’t the reason behind Walsh’s decision to retire.
“Willie’s personal life has nothing to do with the timing of his retirement,” a spokesperson for the company told the newspaper last night, adding that they had found an “excellent” candidate in Luis Gallego, currently CEO at Iberia who will take over from Walsh when he departs.
In November, British business executive Steve Easterbrook was sacked from his role as President and Chief Executive of McDonald’s following the revelation that he had been having a relationship with an employee. Easterbrook had been let go because he “violated company policy” in embarking on a consensual sexual relationship with a fellow McDonald’s employee.
McDonald’s said the strict rules were in place to prevent a conflict of interest.
However, the IAG board is said to have been made aware of Walsh’s relationship with an employee, although a spokesperson couldn’t say when the board had actually been told about the romance.
Last year, Walsh reportedly sold over €4 million worth of shares in IAG to fund a divorce from his first wife.
IAG expects to make a full-year profit of more than €3 billion for 2019 despite a costly pilots strike at British Airways and aggressive pricing for its short-haul LEVEL operation out of Vienna. The results will be announced at the end of February.
