BA suffers from many of the problems Willie Walsh dealt with at Aer Lingus, writes Emmet Oliver

Even Ryanair boss Michael O'Leary had to admit it yesterday, "Aer Lingus's loss is BA's gain".

Speaking after a press conference about the issue of a new terminal at Dublin airport, O'Leary wished Willie Walsh well in his new career, but there was a sense the two men would be locking horns again very soon.

While not due to take over the reins until September, Walsh will be working alongside Rod Eddington between May and September to get an insight into the business and meet staff.

The airline is expected to unveil an ambitious business plan tomorrow, with an operating margin target of 10 per cent. With a new chief executive, rising traffic at its Heathrow base and growing business on the transatlantic, British Airways (BA), even with its high cost base, is in a better position than Aer Lingus.

While its financial fundamentals are not in doubt for now, Aer Lingus is suffering from a leadership vacuum with no chief executive, no permanent chairman and no long-term certainty on the issue of ownership.

The two airlines have even handled the issue of selecting a chief executive differently.

BA did not advertise the position and no formal interviews took place. Instead, the airline asked chairman Martin Broughton to track down the right candidate. The process was relatively quick and was not accompanied by too much speculation.Aer Lingus advertised the position in mid-January and still no appointment has been made. According to sources, interviews have yet to take place.

While the two events are not connected directly, Walsh's departure to BA is likely to hasten the appointment at Aer Lingus.

To its credit, Aer Lingus yesterday reacted generously to Walsh's appointment. "We are delighted to learn of Willie Walsh's appointment as chief executive designate at British Airways. We would like to reiterate our thanks to Mr Walsh for the significant contribution he made to the turnaround of the airline," said a statement.

The strategies used to pull Aer Lingus back from the brink in 2001 and subsequent years are likely to be the ones called on again by Walsh at BA.

The airline is far from being in trouble, but profits have slipped and the rise in world fuel prices has taken a serious toll.

Walsh's first step will be to dampen down expectations.

Some British media reports yesterday appeared to suggest that saving Aer Lingus from bankruptcy meant Walsh would immediately be able to drive up profitability at BA.

This is unlikely in the short term. The key challenge likely to pre-occupy Walsh will be to sort out the structural issues. With more than 51,000 staff, he is likely to seek significant staff cuts at some point. He achieved this in Aer Lingus, although unions in BA are likely to be as vociferous in their opposition to job cuts as Siptu was at Aer Lingus.

While the business plan has yet to be published, Walsh will likely be charged with leading an incremental but radical restructuring programme. One suspects it will be just as challenging as anything attempted at Aer Lingus.