There is one quotation that has followed Willie Walsh from his days at Aer Lingus to the boardroom of British Airways: “A reasonable man gets nowhere in negotiations.”

BA says its chief executive denies ever having made the remark. If he did, it could have been from his time on the other side of the fence, as negotiator for the Irish pilots’ union. Now the boot is on the other foot, as he squares up to BA’s fractious unions.

Mr Walsh joined Ireland’s flag carrier as a trainee pilot aged 17. Ten years later, after his spell as a union rep, he went across to the management side. Again, there are two versions to this story. The official one describes a fascination with the process of running an airline during negotiations. Others have speculated that the bosses were so infuriated with his intransigence that they decided to get him on their side.

What few disagree over is that Mr Walsh is a fighter. In October 2001, just as the industry was reeling after the September 11 terror attacks, he became chief executive of the Irish airline, cut a swath through the workforce and returned the business to financial health.

He became chief executive of BA in October 2005. An executive with a rival airline said: “Willie is doing at BA what he did at Aer Lingus.” The parallels are there because the industry is again heading into turbulence, this time far worse than 9/11’s aftershocks.

Observers say previous chiefs have ducked the issue of BA’s entrenched industrial relations problems, which have given it a cost base and pay structure far more expensive than rivals such as Virgin Atlantic. Some believe the latest crisis has given this combative Irishman the opportunity to go where his predecessors would not.

In selling pay cuts and other austerity measures to staff, Mr Walsh has emphasised that BA is engaged in a “fight for survival” after a “structural shift” in the nature of the business. There is the inevitable suspicion he might be exaggerating for effect, given the continuing talks with the unions.

But the problems are clear. BA, like most other national carriers, depends on the sort of business travellers who wouldn’t balk at paying £4,000 for a flight to New York. Of every 20 of these in the departure lounge, eight have traditionally worked in banking or other financial institutions and for obvious reasons they are not travelling. The response has been heavy discounting and “two for one” offers.

BA made a record £922 million profit in the 2006-07 financial year and restored the dividend. In the latest year, this converted into a £401 million loss and a dividend axed again.

Unions and management have entered a pact not to reveal either side’s position. But BA has said it is seeking permanent changes to pay and other benefits that will give it a competitive cost base to survive and prosper.

So far, the pilots’ union, Balpa, has recommended a new pay structure to its members and they are voting on this. Engineering staff are also onside. But not there yet are the ground staff and the especially militant cabin crew, as well as administrative staff involved in checking in and passenger services. A strike cannot be ruled out.

Mr Walsh has his friends in the City. Howard Wheeldon, senior strategist at BGC Partners, said: “The thing I admire about him, compared to [predecessors] Rod Eddington and [Robert] Ayling, is that he’s the first BA chief executive that’s recognised the importance of staff.

“Instead of commanding them, he’s gone out and talked to them. His approach has been, ‘Whatever other problems we have, if we don’t sort out our industrial relations we are kaput. You never permanently succeed, but he’s gone further than any other CEO in the post-privatisation time.”

He added: “If Ayling or Eddington asked what Walsh said to staff, they would’ve got an inverted V-sign. They wouldn’t have got that support.”

Mr Walsh, 47, is known for his low-key style. He lives in Twickenham, under the Heathrow flight path, with his wife and daughter, and drives a modest car. He does not take his full leave entitlement, though suggestions he never goes on holiday are untrue.

His ethos is “work hard, play hard”, and one form of relaxation is trips to Dublin to mix with friends from his Aer Lingus days. “In that context, you would never imagine him to be chief executive of one of the most high-profile FTSE 100 companies,” said one man who has seen him at play.

Many believe he was fortunate to survive the national humiliation that was the opening of Terminal 5 in 2008. “He said himself he took responsibility and then fired other people,” sniffed the rival airline executive.

The betting is that both he and BA will survive, notwithstanding disobliging remarks from long-term rival Sir Richard Branson earlier this week that the airline could collapse. But it will not be an easy ride, and Mr Walsh will require all of his natural pugnacity.

Gaining altitude

Background: Educated at Ardscoil Rís secondary school, Dublin. MBA at Trinity College.

Best break: Going into management at Aer Lingus.

Worst break: The chaos surrounding last year’s Terminal 5 opening.

Style: Determined, combative.