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Why BA's boss is clocking up air miles

Keith Williams, the new chief executive of British Airways, is the perfect man to take over from the pugnacious Willie Walsh, who has moved up to lead the merged BA-Iberia combined International Airlines Group.
This is because the calm 55-year-old former historian and archaeology specialist loves solving problems. And there can be no job in British corporate life that brings such a huge problem as restoring the battered reputation of the country's leading flag carrier.
When he took the hot seat in January, BA was in the middle of a two-year battle with cabin crew that had cost the company UKpound150 million in strikes and stoppages.
Relations between Walsh and the unions were awful. But in his first four months, Williams made it his priority to settle the issue. "There was a recognition that we had to move on. There was a recognition that we had to solve it. That made it easier," he says. In an exclusive interview with Financial Mail, Williams downplays his own role, but in his first four months he spoke directly to 1,500 cabin crew. And he won over the more militant union members.
He did this by writing personally to all 13,500 cabin crew, telling them that in the battle to restore the BA brand they were the key. He told them he wanted to put confrontation behind them and then surprised the union by offering staff a bonus.
More importantly, he established a relationship with the Unite union's new general secretary, Len McCluskey, who has a tough reputation. This was the key to ending the troubles. Walsh's more combative approach had alienated the union, making any agreement impossible.
In ending the strike he also made a friend of McCluskey, who described Williams as "a decent genuine honest" man.
By solving the dispute, Williams may have given BA a chance to survive by slashing costs. The older cabin crew get to keep their extra allowances, but new entrants are brought in on modern (and cheaper) contracts.
For most new chief executives, a clash with Britain's most militant union would be a huge challenge, but Williams says: "What I really love is to be presented with problems, then gather all the facts and solve them." And he is able to do that because he brings a first-class academic brain -- and a nerveless demeanour -- to the task.
Williams ended up at British Airways despite starting with the ambition of being an academic historian. After gaining a first-class degree in history and archaeology from Liverpool University, he went on to do a PhD.
But halfway through he decided that it was not for him and instead trained to be an accountant at Arthur Andersen.
In 1998 he received a phone call from Bob Ayling, BA's chief executive. After an interview in a hard hat because of building work at BA's headquarters at Waterside near Heathrow, he took the job as group treasurer and head of tax. He moved to Windsor with his wife, Lynn, a teacher, and his two sons.
Williams got what he wanted -- problems. He was heavily involved in restructuring the company after 9/11 and as Walsh's right-hand man applied his intelligence to slimming down the business, selling off Deutsche BA, Air Liberte and its own domestic business, BA Connect. He also helped to mastermind the Iberia merger and American Airlines link-up.
But it was the financial crisis that began in 2009 that brought Williams his greatest challenge. In the following two years the business lost nearly UKpound1 billion, but losses have been stemmed and a much slimmer airline has emerged. New routes such as London to San Diego, which started last week, are crucial to the fightback.
Williams spoke of his battle to win resources to enable BA to expand. "I am trying to persuade the board that we should buy more slots at Heathrow Airport from BMI," he says.
BA has about UKpound5 billion earmarked for expansion. Plans include new aircraft, new routes and modernising some of the older aircraft.
These challenges will inevitably bring more problems. Williams is going to be a happy man for some time to come.
To see more of the Financial Mail on Sunday, or to subscribe to the newspaper, go to http://www.thisismoney.co.uk/.
Copyright (c) 2011, Financial Mail on Sunday, London
Distributed by McClatchy-Tribune Information Services

Last Updated (Sunday, 05 June 2011 18:39)


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