King takes up job for life at BA

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LORD KING is to become life president of British Airways, handing over the chairmanship to Sir Colin Marshall, his second-in-command.

The move, expected to be announced either at or shortly after BA's annual shareholders' meeting on Tuesday, will almost certainly lead to a management shake-up at the airline.

While a board committee has been established to seek a replacement for Sir Colin, currently joint deputy chairman and chief executive, insiders are tipping Robert Ayling, the airline's director of marketing and operations, as his likely successor.

Lord King, 74, will remain titular head of BA but will have no day-to-day executive responsibility. He will have an advisory role, working from a newly built office at his Belgravia home.

His departure will raise doubts about the future of some of the airline's most senior figures. Sir Francis Kennedy, a former diplomat, sits on the board as his special adviser; Lord White, a non-executive director, is a close personal friend; Sir Michael Angus, joint deputy chairman, has just taken over as chairman of Whitbread; and David Burnside, BA's public affairs director, is closely identified with Lord King.

Although Sir Colin is rumoured to have clashed in the past with Lord King over policy, there is not said to have been any doubt about his taking over as chairman.

One of their biggest disputes arose over BA's proposed link- up with United Airlines two years ago. It was seen as Sir Colin's idea with Lord King exercising restraint from the sidelines. In the end, the merger came to nought.

A senior insider said that after the United debacle, the pair went through an uneasy period, but 'Sir Colin has finally won his spurs'.

Another source close to the board said: 'Sir Colin has always been regarded with the greatest respect and there was never any question about him succeeding Lord King.'

Sir Colin was brought in as chief executive from Sears, the stores group, in 1983 - two years after Lord King took over as chairman of what was then an ailing state-owned airline.

The two men are credited with turning BA from a loss- making, over-staffed and inefficient airline into one of the world's most profitable carriers.

BA made a pre-tax profit of pounds 285m last year while the rest of the world's airlines were notching up combined losses of more than dollars 2bn.

Lord King is renowned as an arch deal-maker and political fixer and became one of the Thatcherite business heroes of the 1980s.

His garrulous manner and sharp humour meant that he was never far from controversy. He refused to bow to criticism of his pay increases, and he decided last year to cease making contributions to the Conservative Party.

Even in semi-retirement, Lord King is unlikely to lie low. 'He will still get up at 5.30 every morning, read the papers and get on the phone to everyone on his list,' a friend said.

Sir Colin, 58, is an altogether different character. Much quieter in speech and dress than his predecessor, he is a consummate technician whose skills lie in the smooth day-to- day running of a business with a pounds 5bn turnover.

Lord King's semi-retirement, one observer said, 'will mark the end of what was actually a dream ticket. John King liked the big brush and was very political. He had immense sensitivity to deals and an intuitive grasp of the problems posed by regulators and politicians. Colin is very much internally focused.'

An Americanophile, Sir Colin is expected to press ahead with discussions to take a stake in US Air, the US carrier.

Until recently, Sir Colin's likely successor was thought to be Liam Strong, the operations and marketing director. But Mr Strong left to become chief executive at Sears. His replacement was Mr Ayling, a former Whitehall mandarin and the airline's legal director.

The main question mark against Mr Ayling, 45, who joined BA in 1985, is his lack of experience.

Another internal candidate could be Derek Stevens, BA's chief financial officer. But he is also a comparatively recent boardroom recruit. He joined BA from the TSB Group three years ago.

(Photograph omitted)