ALEX BRUMMER: BA apology comes far too late, the confidence of its customers has been shattered
As the chief executive of British Airways (now International Airlines Group) since 2005, Willie Walsh is one of the few FTSE 100 bosses recognisable to swathes of the travelling public.
Indeed, over the years Walsh has faced down the trade unions and dealt with major crises such as the bungled inauguration of operations at Terminal 5.
The public has become used to him leading from the front.
So it was shocking to find him missing from check-in areas at Heathrow or the television screens at the weekend.
Absent: BA boss Willie Walsh missing from check-in areas at Heathrow or the television screens at the weekend
As the boss of the holding company IAG, Walsh deliberately kept himself in the background. In my chat with Walsh yesterday he made it clear that he deliberately held back.
He did not want to step on the toes of BA’s own chief executive, Alex Cruz, who is new to the job.
In the recent past Walsh has also faded in the background when there have been problems at other airlines in a group which now includes Iberia and Aer Lingus.
If that explains Walsh’s absence from communicating with customers, it doesn’t account for the late appearance of Cruz who did not emerge before the cameras until Monday.
Sure it is understandable that Cruz was up to his neck with electrical engineers and systems experts as BA fought to get planes back in the skies, the booking system up and running again and sort out the growing baggage mountain.
But one might have thought he would find time out to do some personal grovelling.
Walsh is at pains to shift the blame away from Cruz and is firmly resistant to any notion of resignation.
He argues that Cruz was doing what he is paid to do in such circumstances – which is to work flat out with the engineers to get the systems back up.
The initial failure, caused by an electrical fault or surge, was compounded, Walsh says, when the ‘uninterruptable’ power system was restarted and caused havoc, taking out not just the main system but back-up computers powered by diesel and battery.
Walsh totally rejects the notion that it was cost cutting of IT and the outsourcing of jobs which was at the core.
One big lesson for Walsh from this is that if BA.com is not working then the group needs the capability to connect to customers using social media sites. This did happen over the weekend but it was more serendipity than strategy.
The terrible frustration for passengers at the start of a half-term holiday is understandable. Many of us know personally the heartbreak of losing luggage and the tensions of travelling with young people, the elderly and infirm.
If it is any comfort to BA passengers, what happened was not the worst such incident. When US carrier Delta’s systems went down in August 2016, plum in the middle of the American holiday season, some 2,300 flights were lost, against 600 or so at BA.
IAG shares, after an early steep fall, bounced back in later trading. There will be revenue and profits impact and the need for expensive investment in more robust back-up systems.
The reputational damage will linger and Cruz’s leadership will hang by a gossamer thread. Planes may be back in the skies but the confidence of customers in BA has been shattered.
Peter Hambro rightly is frustrated by the efforts of Russian oligarch Viktor Vekselberg, aided by M&G’s Debt Opportunities Fund and others, to eject him from the board of gold miner Petropavlovsk, which he founded.
He fears that using their holding of 30 per cent of its shares, the Russian-backed group is seeking to achieve a backdoor takeover.
Hambro and three non-executives would be removed. And the founder and the company’s army of small investors would miss out on a bid premium.
Hambro says that accounting rules mean that the underlying income and value of the enterprise is far greater than recognised in the current share price. Time for the Takeover Panel to ripple its muscles.
What does Goldman Sachs know which no one else does?
The Wall Street Journal reports it has invested a chunky $2.8billion (£2.2billion) in bonds issued by the Marxist regime in Venezuela’s basket case economy. The bonds currently trade at a 31 per cent discount.
Goldman must be rubbing its hands at the prospect of a Corbyn government and all those bonds in newly nationalised industries.