High flyer – BA's Keith Williams revisited

When British Airways CFO Keith Williams gave an exclusive interview to Financial Director in the autumn of 2007, the mood at the company was more upbeat than it had been for most of the new millennium thus far.

Concerted efforts to re-engineer the business to cope with the long-term effects of the attacks on the World Trade Center in New York on 11 September 2001 had been swiftly effected by the board, while Williams had moved to shore up BA’s huge pension scheme on which any investment in its fleet was contingent, get rid of underperforming functions and reduce its debts.

While the opening of Heathrow’s Terminal 5 in 2008 was a public relations disaster for chief executive Willie Walsh, Williams could bask in the glory of heading up a finance function that had reported record profits and, for the first time in the company’s history, a 10% profit margin.

To prepare the business to achieve this, Williams spent a lot of time focusing on the basics, as many businesses have spent the past two years refocusing on. “We ran the company a little bit like a leveraged buyout, which was to go back to cash generation, dispose of non-core businesses and rebuild the balance sheet of the company,” he told us.

Journey’s end
A couple of months after the terrorist attacks, Williams revealed that he had received a phone call from a journalist at The Sunday Times. “You’re going to be bankrupt in three months on our figures,” they asked him. “What have you got to say?”

He told us he wasn’t ruffled by that. “We’re reaching the end of that journey. The company is now embarking on a period of growth and investment to sustain us into the future.”

Famous last words. Life changed once again and irrevocably so for BA, its embattled CEO Walsh and for Williams. The solution, its decision to merge with Spanish carrier Iberia, is now well underway with the plan to present the transaction to both BA and Iberia’s shareholders no later than this November and to complete the deal by the end of the year. In the proposed structure, BA and Iberia are renamed as OpCos and come under the ownership of a new group holding structure, TopCo.

Walsh becomes CEO of TopCo while Williams has been designated CEO of BA’s OpCo and joins the six-person TopCo management board in that capacity. Iberia group CFO Enrique Dupuy de Lôme becomes TopCo’s group CFO and joins the management team of BA OpCo, while Williams joins Iberia OpCo’s team. The companies are to remain separate entities.

Most interestingly, there is now talk that Williams could replace Walsh as CEO of BA on a permanent basis. Bookies Paddy Power put him on as favourite for the job against 11 other names, including members of the company’s management team and Iberia’s chairman and CEO Antonio Vazquez in a special bet laid on at the beginning of the year.

His odds warmed up from 9/4 to 10/11 a week later, settling at 2/5 by the time this magazine went to press mid-January. “Seemingly informed punters have wasted no time backing Keith Williams for the top job,” Paddy Powers says.