LONDON: With an enviable reputation, IAG’s CEO Willie Walsh would be a hard act to follow at the best of times, but his successor Luis Gallego will have to steer its British Airways and Iberia out of the depths of the worst downturn in aviation history.
A former pilot and dealmaker, Walsh created IAG by dragging two old-fashioned flag carriers into the modern age of budget flying, taking a tough line on unions and cutting costs to build a group that for years outperformed traditional European peers.
As a key player within IAG, Gallego took the helm of Iberia in 2013 and was credited with turning the Spanish airline around. His task now will be to cut group costs while managing damaged relations with unions and politicians and stepping up the battle with low-cost Ryanair and easyJet.
Gallego steps into the role on Sept. 8 and said of his new tenure: “Our idea is to compete with everybody.”
The world looked very different when Walsh announced his retirement in January. He was set to leave on a high, with IAG’s share price and profits close to record levels.
Weeks later COVID-19 hit, and airlines were in the eye of the storm. With one of the world’s largest airline groups bleeding cash, he postponed his retirement to steady the ship.
On the day he bows out IAG expects to raise €2.75 billion ($3.25 billion) at its annual meeting from shareholders in a rights issue which is backed by its biggest shareholder, Qatar.
“Major shareholders are satisfied that IAG’s equity raise will be enough to weather the crisis … or at least that’s their hope,” said one banking source.
The group has already slashed costs at British Airways, with 12,000 jobs set to go and new terms for some long-serving staff.
Unions have vowed to fight the cuts and the British government said the plan was a “breach of faith” after the airline accessed state funds to pay wages during the crisis.
A motion to approve Walsh’s incentive bonus of £883,000 at the meeting could inflame tensions. The Institutional Shareholder Services group said it should be rejected.
Another challenge on the horizon is the need to renegotiate the price of Air Europa, the Spanish airline which IAG agreed to buy pre-crisis.
His job will also not be made any easier by the stop-start nature of flying and the impact COVID-19 is having on IAG’s key routes, including Britain, Spain and the United States.
But Gallego does have reasons to be optimistic. Unlike Air France-KLM and Lufthansa, IAG was not bailed out by government and retains its independence and speed of movement.
“Their main competitor for European consolidation, Lufthansa, just dropped out of the race,” said Bernstein analyst Daniel Roeska.
“Our bigger question over the next three years is, will they come up with the next big thing?” said Roeska. “Will Luis be able to phrase a strategy for the group that convinces employees, convinces shareholders to go with him?“
Walsh, one of the most experienced bosses in the industry, said he will be watching “with interest from a distance.”
He shrugged off questions about his own next move, telling analysts on a final call he would be “in Mary Mac’s Pub, and a few other nice pubs in Dublin.”
Tough start for new boss of BA-owner as Walsh bows out
https://arab.news/r7vwz
Tough start for new boss of BA-owner as Walsh bows out
- Unions have vowed to fight the cuts and the British government said the plan was a “breach of faith” after the airline accessed state funds to pay wages during the crisis
AI will never replace human creativity, says SRMG CEO
- Speaking to Maya Hojeij, senior business anchor at Asharq with Bloomberg, Jomana R. Alrashid expressed pride in SRMG platforms that had absorbed and adopted AI
RIYADH: Jomana R. Alrashid, CEO of Saudi Research and Media Group, highlighted how AI cannot replace human creativity during a session at The Family Office’s “Investing Is a Sea” summit at Shura Island on Friday.
“You can never replace human creativity. Journalism at the end of the day, and content creation, is all about storytelling, and that’s a creative role that AI does not have the power to do just yet,” Alrashid told the investment summit.
“We will never eliminate that human role which comes in to actually tell that story, do the actual investigative reporting around it, make sure to be able to also tell you what’s news or what’s factual from what’s wrong ... what’s a misinformation from bias, and that’s the bigger role that the editorial player does in the newsroom.”
Speaking on the topic of AI, moderated by Maya Hojeij, senior business anchor at Asharq with Bloomberg, the CEO expressed her pride in SRMG platforms that had absorbed and adopted AI in a way that was “transformative.”
“We are now translating all of our content leveraging AI. We are also now being able to create documentaries leveraging AI. We now have AI-facilitated fact-checking, AI facilities clipping, transcribing. This is what we believe is the future.”
Alrashid was asked what the journalist of the future would look like. “He’s a journalist and an engineer. He’s someone who needs to understand data. And I think this is another topic that is extremely important, understanding the data that you’re working with,” she said.
“This is something that AI has facilitated as well. I must say that over the past 20 years in the region, especially when it comes to media companies, we did not understand the importance of data.”
The CEO highlighted that previously, media would rely on polling, surveys or viewership numbers, but now more detailed information about what viewers wanted was available.
During the fireside session, Alrashid was asked how the international community viewed the Middle Eastern media. Alrashid said that over the past decades it had played a critical role in informing wider audiences about issues that were extremely complex — politically, culturally and economically — and continued to play that role.
“Right now it has a bigger role to play, given the role again of social media, citizen journalists, content creators. But I also do believe that it has been facilitated by the power that AI has. Now immediately, you can ensure that that kind of content that is being created by credible, tier-A journalists, world-class journalists, can travel beyond its borders, can travel instantly to target different geographies, different people, different countries, in different languages, in different formats.”
She said that there was a big opportunity for Arab media not to be limited to simply Arab consumption, but to finally transcend borders and be available in different languages and to cater to their audiences.
The CEO expressed optimism about the future, emphasizing the importance of having a clear vision, a strong strategy, and full team alignment.
Traditional advertising models, once centered on television and print, were rapidly changing, with social media platforms now dominating advertising revenue.
“It’s drastically changing. Ultimately in the past, we used to compete with one another over viewership. But now we’re also competing with the likes of social media platforms; 80 percent of the advertising revenue in the Middle East goes to the social media platforms, but that means that there’s 80 percent interest opportunities.”
She said that the challenge was to create the right content on these platforms that engaged the target audiences and enabled commercial partnerships. “I don’t think this is a secret, but brands do not like to advertise with news channels. Ultimately, it’s always related with either conflict or war, which is a deterrent to advertisers.
“And that’s why we’ve entered new verticals such as sports. And that’s why we also double down on our lifestyle vertical. Ultimately, we have the largest market share when it comes to lifestyle ... And we’ve launched new platforms such as Billboard Arabia that gives us an entry into music.”
Alrashid said this was why the group was in a strong position to counter the decline in advertising revenues across different platforms, and by introducing new products.
“Another very important IP that we’ve created is events attached to the brands that have been operating in the region for 30-plus years. Any IP or any title right now that doesn’t have an event attached to it is missing out on a very big commercial opportunity that allows us to sit in a room, exchange ideas, talk to one another, get to know one another behind the screen.”
The CEO said that disruption was now constant and often self-driving, adding that the future of the industry was often in storytelling and the ability to innovate by creating persuasive content that connected directly with the audience.
“But the next disruption is going to continue to come from AI. And how quickly this tool and this very powerful technology evolves. And whether we are in a position to cope with it, adapt to it, and absorb it fully or not.”
