LONDON (CNNfn) - British Airways chief executive Bob Ayling bowed to stock market pressure and stepped down Friday. He will be replaced on a short-term basis by his predecessor, Colin Marshall.
The slack performance of British Airways stock put Ayling's position under strain, and BA shares jumped 5 percent to 308 pence on the news of his departure, after an initial 9 percent surge. BA (BAY) stock has fallen by around a third over the past year, and almost fell out of the blue-chip FTSE 100 index.
In a statement the firm said it had suffered "unprecedented pressures from competitors". The departing boss admitted the demands of his four years at the controls had taken their toll.
"Inevitably, the pressures have affected my family and I owe it to them to take some time off," Ayling said.
"This is good for sentiment, because he was perceived as arrogant, and not good at handling negotiations with unions and regulators," said an airline analyst, who declined to be named.
Ayling has presided over a strategy of pursuing more business class passengers and reducing the number of cheaper fares. Despite some signs that this plan may be working, the airline, buffeted by high fuel prices, tough competition on its key North Atlantic routes and the appreciation of sterling against other European currencies, is heading for its first loss since its 1987 privatization.
"The latest numbers showed BA may have turned the corner," said another London-based analyst, pointing out that BA remains "largely hostage to the general competitive environment."
Ayling's personal popularity at the company was reported to be at a low ebb, following thousands of job cuts in recent years, and a protracted strike in 1997.
"There's a tricky period ahead for industrial relations at the company," said analyst Alastair Gunn at Credit Lyonnais. He pointing out that the airline is attempting to cut capacity by about 12 percent in the next few years, and also said it will need delicate negotiating skills to protect its interest as Europe and the United States work towards new accords regulating airline traffic across the Atlantic.
Gunn, who recommends buying BA shares, professed himself pleased with the return of Marshall as interim CEO, because "Marshall was associated with a period of success for BA," and the strategy put in place by Ayling is unlikely to be reversed.
Analysts said there are a number of leading internal candidates to take the top job on a longer-term basis, although executive search agencies are also looking outside the company.
Barbara Cassani, current head of Go, BA's low-cost subsidiary, is said to be one of the candidates. Rod Lynch, appointed by BA to the chief executive's role at Greece's Olympic Airways last year, is another contender. BA won a contract to manage Olympic last year, and is currently negotiating with the Greek government to buy a 20 percent stake in the company. 
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