British Airways' new chief executive Willie Walsh assumed sole charge of the flag carrier yesterday following the departure of his predecessor Sir Rod Eddington.

The former Air Lingus boss, 43, faces a tough challenge as the company continues its battle to reduce costs and fight off fierce competition from rivals.

Mr Walsh urgently needs to boost revenues and turning around the losses made by BA short-haul flights from Gatwick could be one of the first things he tries to resolve.

BA has already reduced losses at Gatwick from £310 million at the turn of the millennium to £26 million this year but this is still a sizeable deficit which he would like to eradicate.

Over the next two years Mr Walsh will oversee a review of property needs, a reduction in baggage handling costs and schemes to increase productivity at the West Sussex airport.

BA has already begun experimenting with its routes at Gatwick, introducing 11 new European destinations this year, including Split in Croatia and Tirana in Albania.

Although Mr Walsh has daunting times ahead, he will surely be spared the troubles endured by Australian-born Sir Rod who, during his five-year reign, had to contend with September 11, Concorde being grounded then axed, Sars, foot-and-mouth, the Gulf War, wildcat strikes and rising oil prices.

After restoring Aer Lingus's fortunes having originally joined the Irish carrier as a pilot, Mr Walsh will need to tackle employee relations at a time when BA is still looking to slim down staff numbers.

The damaging BA wildcat strike this summer in support of the sacked workers of the airline's catering company, Gate Gourmet, showed the simmering discontent of some workers, as did wildcat action that caused flight disruption in summer 2003.

Mr Walsh earned a reputation at Aer Lingus of being a cost cutter and it could be that a similar approach in his new job will lead to a run-in with the unions at BA.

Mr Walsh will be overseeing BA's move into the long-awaited new Terminal 5 at Heathrow, which will be operational in 2008 and will necessitate major changes in BA's working practices.

He will also be as keen as Sir Rod was to see the US agreeing to an "open sky" policy.

Mr Walsh said: "We have made tremendous progress in the last five years, but I've been very impressed by the fact that everyone I've met at British Airways believes there is room for further improvement.

"All our customers are important to us and service will be at the heart of everything we do at British Airways. We must redouble our efforts to make this airline more efficient, more focused and better able to serve our customers."

Tuesday, October 4, 2005