Aer Lingus Chief Executive Officer
In October 2001, he was appointed CEO from his then position of Chief Operating Officer, succeeding Michael Foley who had resigned following a harassment complaint. The carrier was in financial difficulty. Walsh took action by eliminating 2,000 staff positions, reducing the number of aircraft types and selling non-core assets, including an art collection at the company headquarters. He reconfigured Aer Lingus as a low-cost airline in imitation of Ryanair, and began withdrawing from various services like short-haul Business Class and cargo services, and heavily restricting the airline's frequent-flyer programme, TAB.
The company operating profits rebounded, but the cost of the write-offs and redundancies meant that net profitability was not as quick to recover. Not all of Walsh's reforms were successful, such as the outsourcing of aircraft cleaning. The contracting had not been agreed with Aer Lingus unions which led to large payments to the private contractor while Aer Lingus employees did the cleaning work. A three-day lockout occurred in 2002 during the peak of the cutbacks.
The management team suggested to the principal shareholder, the Irish Government, a float of Aer Lingus on the stock market. Stock floats are often rewarding to top management and this was opposed by the unions who feared a privatised Aer Lingus would impose even tougher working conditions. The Government eventually turned down the float and this led to Walsh and other management executives resigning from the company in January 2005.
The Taoiseach Bertie Ahern subsequently described Walsh's offer of an MBO as "a time when management wanted to steal the assets for themselves through a management buy out, shafting staff interests.".
Dermot Mannion, formerly of Emirates Airline, succeeded Walsh as Aer Lingus Chief Executive Officer.
Read more about this topic: Willie Walsh (Irish Businessman)
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