Airey to be Channel Five chair and chief executive

Dawn Airey will be chair and chief executive of Channel Five when she joins the broadcaster from ITV, it has been revealed. This heralds the end to Jane Lighting's tenure five years after she succeeded Airey as chief executive.

As the Five chief executive, Airey will take a seat on RTL's management committee alongside the group chief executive, Gerhard Zeiler, and other senior executives such as Tony Cohen, the chief executive of production company Fremantle Media. Airey will have to serve out a period of gardening leave before joining RTL, thought to be at least six months.

Staff at Five were caught by surprise by the news and RTL has been forced to plan a conference call later this evening to discuss the appointment with senior executives at Five following ITV's surprise announcement. Lighting has been away from Five at a meeting for newspaper group Trinity Mirror where she is a non-executive director and Five executives this afternoon were unsure if she had been informed of the news. An RTL Group spokesman said: "RTL Group is going to publish a statement in the following days." Five directed calls to RTL Group.

Airey's return to Five, where she worked as director of programmes and chief executive between 1996 and 2003, brings down the curtain on the Lighting era. Lighting has been responsible for Five's move into multichannel, which saw it launch Five Life and Five US. However, there were criticisms that this was left too late and Five Life has already been rebranded to Fiver after an unspectacular performance.

Under Lighting, Five's coups included winning the rights to Test match cricket highlights, buying in Australian soap Neighbours and hiring Natasha Kaplinksy as the new face of its news coverage earlier this year. But despite these eye-catching moves, Five has failed to build on the growth of its early years and has seen audience share decline in recent years.

Airey's move to head Channel Five has puzzled analysts and raised the possibility that she may spearhead a bid for her old employer. Five's owner RTL Group has long maintained that it wants to be number one or two in all its markets. Along with Israeli billionaire Haim Saban, RTL has reportedly been investigating swapping Five for BSkyB's 17.9% stake in ITV and could use such a deal as a springboard for a potential bid. "Dawn Airey could provide valuable insight if they are interested - but she could well know enough about ITV to put RTL off," one analyst said.

The problem is that RTL's parent company, German media giant Bertelsmann, has not had funds for a major acquisition since buying out minority shareholder GBL. "I don't think they have necessarily got £5bn swilling around they are looking to find a home for," said Paul Richards, a media analyst at Numis Securities. And in spite of ITV's languishing share price, raising money for a deal is also highly problematic given the ongoing credit crisis.

So some analysts believe Airey has been recruited not as the leader of an ITV bid but as the dynamic force who can finally take Five to a new level. Under the current chief executive, Jane Lighting, Five has struggled to reverse a decline in audience share and to punch its weight alongside the longer established terrestrial channels. "Jane Lighting seems to have run out of road in terms of trying to turn Five around," said Paul Reynolds, an analyst at Deutsche Bank. "Dawn is probably a more credible candidate for doing that."

John Overend, joint managing director at Omnicom-owned media operation Opera, said: "Five has had a very disappointing last few years but it has reversed this trend so far this year really on the back of one show - Neighbours. Five has the ability to take audience from other broadcasters but it is not a long-term strategy basing it on one show."

Reynolds said it was odd, however, that Airey should want to return to the same job she left in 2003 and abandon the challenge of driving ITV's content-led recovery. "It's perplexing - what's in it for Dawn? What does that tell you about ITV's ability to execute its content strategy?" One senior media industry executive said her return to the Five job meant RTL could well have a major strategic objective in mind. "[RTL chief executive] Gerhard Zeiler would not have bought her on board unless there was a larger strategy to merge or sell Five," the executive said. "Given Dawn's experience there is no way she would do the job unless there would be a serious vision".

Today's announcement from ITV took Five by surprise - and it is understood that ITV executives were similarly taken aback last night when they heard Airey was leaving. ITV's statement drew attention to Airey's gardening leave - thought to be between six and 12 months - while the executive chairman, Michael Grade, who hired her to great fanfare last year, failed to mention his former charge at all.

"She has gone for jam today instead of jam tomorrow," said one senior media executive. "The reaction across the industry is that walking out so quickly on something like this doesn't look good [for her], although it is a big, interesting job and you can see why she might be tempted. It isn't good for ITV, but the thing to remember is that ITV is an awful lot bigger than Dawn. There are a lot of good people there and they will get over it quickly."

Airey's path to Channel Five:

1985: Dawn Airey began her TV career at Central Independent Television aged 25, as a management trainee, after graduating from Harvard Business School and Girton College, Cambridge.

1989: Promoted to director of programmes.

1993: Moves to ITV Network Centre to become controller of children's and daytime programmes.

1994: Airey moves to Channel 4 to become controller of arts and entertainment.

1996: She moves again, this time to Channel Five as director of programmes.

2000: Channel 5 promotes her to chief executive.

2003: Sky Networks recruits Airey as managing director.

2004: Airey is appointed non-executive director of Easyjet, as well as director of the Community Channel and the Media Trust.

2006: Her jobs at Sky shifts to managing director of channels and services but in a surprise move, Airey announces at the end of the year that she is to leave Sky to head up a new multimedia startup called Iostar.

2007: Just eight days into the role at Iostar, Airey quits following what she calls "a significant breach in her contract" related to the firm's funding. Within weeks, she joins ITV as managing director of global content. Airey also becomes a director of the British Library.

2008: Airey, who was appointed to the ITV board in February, resigns eight months after joining ITV on the day the news breaks that the broadcaster faces a £4m fine over phone-in scandals. She is to become the chair and chief executive of Channel Five.