US Airways' chief executive Rakesh Gangwal has unexpectedly quit in the second high-profile departure from the US airline industry. Chairman and former chief executive Stephen Wolf (left), who will succeed Gangwal, expressed "disappointment" at Gangwal's decision to leave with immediate effect for a job "in the field of private equity and venture capital".
Gangwal and Wolf had worked together for the better part of a decade. But, says analyst Holly Hegeman of PlaneBusiness.com, "Wolf is not a day-to-day operations man. He is the big-picture wheeler-dealer. Rakesh was the operational whiz who took Wolf's overall vision and tried to make it work on a day-to-day basis."
That division of labour may have worked in the first three years after their 1996 arrival at US Airways. However, both the vision and the daily reality struggled this year as regulators blocked merger talks with United Airlines, union resentment grew at a radical restructuring plan, and low-fares competition ate away at market share in its limited home territory of the East Coast.
Gangwal had designed a recovery plan that focused on doubling the regional jet operations while finding an international alliance partner and cutting costs. Despite cutting 11,000 jobs and making some progress in the small-jet talks with the pilots union, US Airways is still seen as one of the country's most vulnerable majors.
US Airways expects to end the year with about $1 billion in liquidity, but its strategic future is unclear. Buckingham Research analyst Helane Becker expects Wolf will try to sell the airline, but ABN Amro's Ray Neidl disagrees: "US Airways intends to go it alone now that Wolf is getting more involved, rolling up his sleeves and getting back to work."
Gangwal's departure comes less than a month after James Goodwin, chairman and chief executive of United Airlines, quit under pressure from unions.
Source: Flight International
