British Airways’ under-fire chief executive Willie Walsh is to get a £35,000 pay rise and has seen his bonus target changed to focus on customer service, it has emerged.
Mr Walsh announced last month he would forgo his 2007/08 bonus after the airline’s Terminal 5 fiasco, despite unveiling record full-year profits.
However, the airline’s annual report yesterday shows Mr Walsh will see his £700,000 salary increased to £735,000 next month, while he could pick up a bigger bonus in this financial year worth up to 150 per cent of salary.
But the bonus targets will be more dependent on customer service and satisfaction as it seeks to rebuild its reputation in the wake of the disastrous T5 opening.
Dozens of flights were delayed and cancelled and thousands of passengers separated from bags in the troubled move to the new building in March. The reputational woes overshadowed record pre-tax profits when the group unveiled figures last month.
BA made pre-tax profits of £883 million for the year to March 31, up 45 per cent on the previous year, despite soaring oil costs, which saw the airline’s fuel bill top £2 billion. Mr Walsh came under pressure to quit over T5 and made a series of public apologies.
He said last month it would have been “inappropriate” to accept a bonus.
This year he will have to achieve a 10 per cent operating margin to secure a third of the possible £1.1 million windfall, while a third is calculated on customer satisfaction and punctuality of planes – both dependent on BA achieving pre-tax profit.
Airline analyst Andrew Fitchie of Collins Stewart said that BA’s top executives will have to work hard to achieve this year’s bonus targets and praised its move to put greater emphasis on customer satisfaction.
He said: “They’ve set them a challenging hurdle, because the consensus is for zero operating margin with the oil price being where it is.”