Rod leaves BA on a high note

Rod Eddington, it seems, will leave British Airways on something of a high. Financials for the June quarter, the last that he will deliver as chief executive, were fairly impressive, with net profits doubled on the back of some strong revenue gains. See related article There are still some challenges ahead for BA, but Rod is now handing over to Willie Walsh a group in much stronger shape than the one that he inherited back in 2000.


In large part, the latest set of figures reflect a general recovery in premium flying that has begun to lift other European majors too. BA benefits particularly from a stronger US dollar given its strength on the other side of the North Atlantic. Yields were up by 1.5% in the quarter!


But his real success has been in bringing BA out of its funk as a legacy carrier struggling to come to terms with the new world order and its own role in it.


The European operations under intense low-cost competition were bleeding BA dry and that has largely been stemmed, although there are still no great profits to show. More than that, Rod has helped BA to regain its sense of ambition, not least pioneering on the web. It is now competing online with the best of them and that showed through too in the latest quarterly results: selling costs were down by over 20%, representing a saving of more than $50 million dollars. That more than paid for the quarter’s wage increases!


Willie Walsh himself is no stranger to reinvigorating an ailing legacy carrier as his transformation of Aer Lingus shows. Will he succeed at BA? With a fair wind, I reckon he will. Like Rod, he’s an affable guy but shrewd too. I saw him a few weeks ago and he certainly seemed all geared up to go after a few months in the background. Rod’s leaving party is on 6 September, so there’s not much waiting left!

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