Willie Walsh, the chief executive of International Consolidated Airlines Group (IAG) which owns the likes of British Airways and Iberia, earned nearly £3.2 million last year according to newly filed documents. The long-serving CEO, who is set to leave the company later this month, saw his pay jump by more than 5 per cent despite falling profits at the airline group.
Last week, IAG reported a 5.7 per cent fall in operating profit which the group partly blamed on a pilots strike at British Airways. A two-day strike over pay, benefits and working conditions led to over 2,300 cancelled flights and cost IAG around €137 million.
But in its annual report, IAG said it had used the pilots strike to reduce employee costs by 1.4 per cent at constant currency by withholding annual bonus payments from frontline staff. The group was also feeling the final benefits of closing a pension scheme for long-serving staffers at British Airways.
Walsh, however, is set to earn £883,000 in an annual bonus which IAG said was partly down to his performance in “cost reduction programmes”. He is also set to pick up 1.1 million shares worth £5.2 million under a previously announced bonus scheme.
The board of IAG also praised Walsh for developing a clear IT strategy for the group, despite several high-profile IT meltdowns especially at British Airways. The IAG Group is currently appealing a £183 million fine by the UK’s Information Commissioners Office for a massive data breach.
IAG says it continues to “make representations” and believes any final penalty will be “considerably lower” than the original proposed fine.
In the first three months of 2020 alone, Walsh will earn £288,000 in pay and benefits before leaving the company on March 26. Walsh officially retires in June after playing a “formidable role” in shaping IAG when British Airways and Iberia merged in 2011.
His replacement, current Iberia chief executive Luis Gallego, will take the helm on a base salary of £820,000.
Operating profits at IAG were down €200 million in 2019 but those losses weren’t all down to the British Airways pilots strike. Walsh blamed a “sharp increase” in the group’s fuel bill, air traffic control delays and a “softer” economic environment for IAG’s woes.
Walsh is said to earn 72 times the wage of the average IAG employee.
