Marshall reign ends at BA after 12 years

Airline high-flier: Ayling becomes chief executive in unexpected switch at British carrier

Sir Colin Marshall unexpectedly stepped down yesterday from the chief executive role at British Airways in favour of Bob Ayling, the managing director.

Sir Colin is to continue as chairman but on a non-executive, half-time basis. Mr Ayling, who earned pounds 508,000 against Sir Colin's pounds 765,000 last year, takes over all executive functions from 1 January.

British Airways denied it was anything other than a routine and long- planned handover. Sir Colin has been at BA for 13 years and chairman since 1993. A spokesman said: "There are genuinely other things he wants to do and he really does feel that now is the time to hand over."

Sir Colin, who will be 62 later this month, is taking over as deputy president of the CBI and will be its president from next spring. He is chairman of the Marketing Council, president of the Chartered Institute of Marketing, a director of the New York Stock Exchange and a non-executive at BT and HSBC.

Sir Colin's new role will be more diplomat than executive, with a focus on global alliances, government and regulator relationships and the European Union, where deregulation of airlines could bring new opportunities for BA from 1997.

The lightning rise of Mr Ayling, who took his first mainstream management job only four years ago as director of marketing and operations, boosted the share price 9p to 474p, though part of this was due to good results from Qantas, where BA has 25 per cent. The job change was generally well received ahead of interim profits the City expects to be around pounds 430m on Monday.

Mr Ayling had been head of legal services at the Department of Trade and Industry before joining British Airways, initially as legal director and then as company secretary and director of human resources. It was Sir Colin who made the approach through an intermediary.

BA rejected suggestions that the reshuffle was linked with the imminent resurfacing of the dirty-tricks row with Virgin, whose anti-trust case against BA could stretch over a couple of years, starting early next year. Sir Colin and Mr Ayling were both protagonists in the highly public battle with Richard Branson.

Mr Ayling promised continuity in the airline's policy of developing a global network, which has come under the spotlight recently because of the ups and downs of BA's relationship with USAir. First the 25 per cent owned associate lost money heavily, leading to a pounds 125m write-down of the value of BA's stake, then, after recovering, the company began talks with American Airlines and United Airlines about a partnership that could end its relationship with the British carrier.

Mr Ayling said it was not clear at all that USAir would do a deal with other airlines and if possible he would wish to preserve the existing relationship.

If this was not possible he wanted it replaced with an equally good relationship with another carrier, though he declined to comment on suggestions that this would be with American, which is reported to be dropping out of the talks with USAir.

He praised the virtues of continuity and dismissed as absolute rubbish reports that he was considering dropping the word British from the airline's name. He said the only change in his role would be spending more time on the international side of the business.

Mr Ayling said: "The policy of developing a global network is the right one. But it has never been easy and it is not going to be easy."