Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code :LDS0009

Year : 2005

Industry :Transportation

Region : UK

Teaching Note:Not Available

Structured Assignment :Not Available

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WillieWalsh’s Challenges after taking over as the CEO In early 2005, it was announced thatWillieWalshwould succeedRod Eddington as theCEOof BA.Nick Van den Brul, an analyst with Exane BNP Paribas,32 London, said, “He was responsible for the turnaround of Aer Lingus and quite a lot of thatwas actually stream-lining and cost cutting the organisation. Someonewith that experience is going to fit in (atBA), because there’s a lotmore to do.”33 However it is believed thatWalsh needs to deal with unions at BA, which face more job cuts asBAcontinues to experience high fuel costs and lower ticket prices as a result of competition. JoeGill, analyst atGoodbody Stockbrokers inDublin, said, “He (WillieWalsh) was helped by the fact that post 9/11 theworldwas in disarray so hewas able to push forwards quite strong changes (in Aer Lingus). Thatmight bemore difficult in a stable environment.

Walsh’s challenges include the improvement of BA’s short distance service in the face of growing competition fromits European low-cost rivals,which depend on point-to-point servicewithout catering or other frill services. They also sell tickets directly to the customers over the Internet, discontinuing the services of travel agents. It is estimated thatRyanair and easyJet sell 90%of their tickets through the Internet,which is ten times over that sold by themainstreamcarriers. 70%of BA’s tickets are sold online and BA also intends to reduce the number of its check-in desks at the airports....

Willie Walsh – The Saviour of Aer Lingus WillieWalsh joined Aer Lingus in 1979 as a cadet pilot at the age of 17.Heworked hisway through the ranks ofAer Lingus to become a captain by 1990.Hewas appointed as the chief of Aer Lingus’ charter airline inSpain, Futura, in 1998.Walsh returned toDublin, Ireland as Aer Lingus ChiefOperatingOfficer in 2000 and eventually became itsCEOin 2001. Itwas reported that he helped the company earn $503,000 in cashwithin amonth of his appointment as theCEOof the company. He raised themoney by selling the corporate art collection of the Irish state-owned airline

In 2001,whenWalsh took over as theCEO,Aer Linguswas a bureaucratic organizationwith an oversize payroll andwas losing $ 2million per day after the September 11 terrorist attacks.However, the airline had a good brand image andwas rated high on customer satisfaction. Willie Walsh came out with a rescue package in consultation with the airline management, its trade unions and the Government. The package included a voluntary severance/early retirement programme that would reduce 6,300 staff. The staff included 150 pilots, 470-cabin crew,more than 500 ground staff and 550 clerical staff.Walshmade Internet themajor channel for sale of its services and 700 temporaryworkerswere laid off....