Gestures do matter and the decision by Willie Walsh, the chief executive of British Airways, to forgo his £625,000 bonus will end speculation over whether he will keep his job.

Mr Walsh, the pilot turned executive, has now apologised for the chaotic opening of Heathrow's Terminal 5 in March and personally paid for it as well.

BA's Irish boss has also strengthened his position by delivering on a promise to reach profit margins of 10 per cent - equivalent to an operating profit of £875 million.

This has enabled BA to give shareholders their first dividend in seven years. This is an excellent result and it will not be Mr Walsh's fault that it is unrepeatable in the coming year.

Rising fuel costs are out of Mr Walsh's hands and institutional investors understand that the airline industry is about to go through a very difficult period. They seem happy to trust the chief executive to keep BA airborne through the worst of it and Mr Walsh said that he expected to stay in charge for another ten years.

However, there is one area where Mr Walsh could struggle in the coming months. BA's employee relations have always been awkward and the company will meet its pilots' union in the High Court on Monday to decide whether it can take industrial action.

Mr Walsh's dispute with his pilots is ironic as he was himself a union negotiator for Aer Lingus's pilots during his flying carrier.

He joined Aer Lingus, the Irish flag carrier, in 1979 as a cadet and was known as a tough union leader. Aer Lingus solved that problem by inviting him into management and he became chief executive in 2001 at the age of 40.

He took over at BA in 2005 and has been dealing with crises that have been largely beyond his control ever since. This included the shutdown of Heathrow in 2006 because of a threatened terrorist attack and criticism of BAA, the airports operator, for providing poor services.

Mr Walsh's biggest successes to date are resolving the problem of the airline's £2 billion pension deficit, which will allow it to buy a new fleet of aircraft, and reaching the target of producing a 10 per cent profit margin last year.

However, BA's management has developed a reputation for arrogance and antagonism with its workforce. The airline narrowly avoided strike action at the beginning of this year and its dispute with the pilots could result in aircraft being grounded just as the summer holiday season picks up.

Times Recommends

• House prices falling fastest in 18 years
• Britain 'faces full-year fall in GDP'
• Savills millionaire clients feel property crunch