WILLIE WALSH tells a story about moving his desk during his first days as boss of British Airways. Previously tucked away behind some partitions in a wing of Waterside, the airline’s Heathrow headquarters, he shifted it so it was the first thing people saw on stepping out of the lift.

Disconcerted by being confronted by the chief executive, staff scuttled sideways looking for cover. Those with reports or messages for the boss looked round for an intermediary to pass them to - until he sprang up and took them himself.

The story says much about Walsh, a 46-year-old native of Dublin and former commercial pilot. He is unflinchingly direct, confident in his own abilities, and not afraid to upset old ways of doing things. He is also, thanks to the shambles that followed the opening of Heathrow’s Terminal Five 10 days ago, the business equivalent of public enemy No 1.

Since the flagship facility’s baggage system imploded on day one, criticism of Walsh and the company has been relentless and vitriolic. Politicians and business leaders have lambasted the company’s failings, while passengers caught up in the turmoil have made regular television appearances swearing never to fly BA again. This week Balpa, the pilots’ union, will join the chorus calling for Walsh to resign. “We want confidence in our leadership, not arrogance,” said Jim McAuslan, Balpa’s general secretary.

One key constituency, however, has remained silent. In the week when large City shareholders forced a climbdown at Marks & Spencer over Sir Stuart Rose’s elevation to chairman, no voice has been raised against Walsh.

The company’s biggest shareholders have pointedly stayed silent, and those who have spoken have at worst been neutral on Walsh’s future.

Invesco, BA’s largest shareholder with a 10% stake, declined to comment on Walsh’s performance. Richard Marwood, fund manager at Axa, which holds 4.2%, said he was concerned at the damage done to the reputation of the company, but that talk of resignation was “going over the top”. A senior executive at Insight, which holds 2.3%, said Walsh’s future was “not on our radar”. Legal & General and Standard Life (each with 4.2%) also declined to comment.

A look at the BA share price makes it hard to understand why fund managers haven’t joined the antiWalsh clamour. BA has been one of the worst-perform-ing stocks in the FTSE 100 in the past year. It closed the week at 235p, having fallen from a 12-month high of 519p. In the process it has underperformed the FTSE All-Share by a whopping 48%.

The Terminal Five debacle, however, has had nothing to do with its descent. On Thursday, the company estimated the cost of the problems at £16m, insignificant against an annual turnover of £8.5 billion.

Instead, a triple whammy of high oil prices, looming US recession and crisis in the financial services industry has laid the shares low. BA is highly sensitive to the fortunes of Wall Street and the City. At least 75% of its profits come from its flights between London and America. Its powerful position at Heathrow makes it ideally positioned to exploit the rich stream of business traffic between the business capitals.

Big shareholders will not be happy that the value of their stake has fallen, but they are prepared to give Walsh the benefit of the doubt. They respect him for having tackled difficult issues that were facing BA when he took over, in particular the pension deficit, which threatened to cripple the company.

Crucially, he is close to hitting a target that has eluded his predecessors – a 10% operating margin for the airline. Analysts say he will come close, but probably just miss, when he reports results on May 16 for the last financial year.

McAuslan said the City should change its view. “Banks, institutional investors and analysts need to wake up to the fact that there is something very wrong right at the heart of this company that is making our once-great brand a laughing stock. The margins may look good, for this industry anyway, but the financial establishment’s preoccupation with the bottom line has glossed over the warning signs,” he said.

Walsh arrived at BA in 2005, a surprise successor to Sir Rod Eddington, the cerebral but matey Australian who was hired, in the words of one BA insider, “to put a smile on people’s faces” after the gloomy end to the reign of previous boss Robert Ayling.

The Irishman did not seem a choice designed to keep the smiles in place. As head of Aer Lingus, Walsh averted financial disaster by engineering a radical overhaul and ditching hundreds of staff. It was a spectacular turn-round, but one that left him with a reputation as a hatchet man.

He did not see much similarity between the companies, telling The Sunday Times in October 2005: “The only lesson you can learn from Aer Lingus is don’t allow yourself to get into that crisis scenario in the first place. I will do what I believe is right for BA, but that doesn’t mean I will do what I did at Aer Lingus.”

Walsh tackled other areas that Eddington had been unable to resolve, such as making the airline’s nonHeathrow operations pay. He has sold routes from Bir-mingham and Manchester and drastically slimmed down the business at Gatwick. He has also looked for growth elsewhere, overseeing the creation of a base at London City airport and placing BA’s first order for wide-bodied aircraft in more than a decade, a deal that includes the Airbus A380 superjumbo.

Along the way he has upset people. BA’s pilots, traditionally the airline’s most powerful workers’ group, are on the verge of their first strike in 30 years in a dispute over Walsh’s plans for a new “airline within an airline” that will fly to America from the Continent.

The City, however, remains content - for the moment. In reflecting on Terminal Five, Walsh might want to bear in mind the fate of Ayling, who also upset pilots and cabin crew during his reign. He suffered calls for his departure for more than two years and seemed to have weathered the storm. It was only then, in March 2000, that he was persuaded to go.

ALITALIA UNDER THREAT

AFTER years of financial disasters, Alitalia may go under this week. The board will meet on Tuesday to decide whether it should go into administration.

The Italian airline has lurched from crisis to crisis in recent years and been repeatedly bailed out by the Italian government.

This latest flirtation with bankruptcy stems from the collapse of a takeover bid by Air France/KLM, which pulled out of talks last week, saying that the demands of the Italian unions were too great.

While there is a strong likelihood the airline will seek court protection from its creditors this week, there are signs that it could yet escape closure.

The government has said it wants to keep it flying and Silvio Berlusconi, tipped to become Italy’s next prime minister, has called on business to come up with a rescue plan.

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