August 2015: Willie Walsh, CEO, IAG

IAG’s takeover of Aer Lingus means that CEO Willie Walsh’s career has come full-circle.

The success of IAG’s epic takeover bid for Aer Lingus, already one of the landmark deals in Irish corporate history, closes one chapter and opens another – both for the airline and for Willie Walsh, CEO of its new owner IAG.

On August 18th, IAG announced Ryanair’s acceptance to sell its shares in Aer Lingus and that the offer was now unconditional: the deal was in the bag following the acceptance of over 95% of shareholders.

“We’d like to welcome Aer Lingus into IAG,” said IAG chief executive Willie Walsh. “It will remain an iconic Irish brand with its base and management team in Ireland but will now grow as part of a strong, profitable airline group. This means new routes and more jobs benefiting customers, employees and the Irish economy and tourism.”

With that, north Dublin-born Walsh’s career had come full-circle since joining Aer Lingus as a 17 year-old cadet pilot in the late 1970s. He progressed to captain while building up his managerial know-how with a nighttime Trinity College master’s before his first chief executive role, with troubled subsidiary Futura, in 1998.

Returning to Aer Lingus proper in 2000, Walsh served as chief operating officer before taking over the CEO’s desk at perhaps the most inauspicious time for the airline industry in living memory: the aftermath of 9/11.

Walsh acted quickly to cut costs and reposition the airline, which avoided collapse. After plans for a management buy-out and flotation were blocked by the government, Walsh resigned in 2004.

He wasn’t long out of the spotlight, being appointed chief executive of British Airways the following year. IAG, or International Airlines Group, stemmed from a merger with Iberia in 2011 – making it one of the biggest airlines in the world.

THE NEXT STAGE

IAG’s bid for Aer Lingus this year had to clear numerous hurdles such as the flag carrier’s pension problems, rival Ryanair’s near-30% shareholding, union disquiet, political discomfort – and the future of valuable and strategically important Heathrow landing slots.

An understated, largely behind-the-scenes effort saw IAG fail to convince the Aer Lingus board to accept €1.23bn and €1.28bn, before €1.4bn – €2.55 per share – moved things on to the next stage, with chairman Colm Barrington and CEO Stephen Kavanagh coming out in favour of the deal. The Government, a 25.1% shareholder, agreed to support the bid in May, and Ryanair’s acceptance sealed matters.

It was a good year for Walsh’s IAG in other ways, too: 2015’s first-half operating profits were €555m, a jump of 141% backed by a 5.6% increase in passengers. “We said previously that profit improvement would be slower in the second quarter and we are on track to reach our full-year targets,” he said.

“We continue to take cost out of the business, with both employee and supplier unit costs down at constant currency, and improvements in productivity levels.”

Productivity has never been a problem for this acknowledged workaholic CEO, who has steered through a deal that will be remembered for many years to come.