Support Skift’s Independent JournalismMake a Contribution Now
Faced with an array of inertial forces, great leaders in the airline business have been conspicuous by their absence. There are few standouts, but can their skills be replicated? Or, worryingly, do today’s CEOs even want to change? Benchmarking airline companies against each other and often employed on short-term contracts, there are forceful and counter-productive incentives to continue doing things pretty much the same way, but faster.
One current leader who has undoubtedly been successful in generating profitability is Michael O’Leary, CEO of the European LCC, Ryanair. In many ways he shares some of Steve Jobs’ innovative creativity, albeit within the shackles of often-ludicrous regulatory constraints. Yet he is abrasive publicly, has had a relatively high turnover of management (although junior staff tend to have greater longevity) and can hardly be said to have sympathetic people skills.
Even though he is recently suggesting he may have a fuzzy side to him, Mr O’Leary could not be further removed from the progenitors of the low-cost model his airline emulates – Southwest Airlines.
Southwest founder Herb Kelleher would be most people’s pick as the best airline CEO of all time (at first with Lamar Muse and later supported by Colleen Barrett). A tough lawyer and businessman, he was inspirational, innovative, constantly generated profits and, above all, established a remarkable culture in what became the granddaddy of all LCCs. Like Mr Jobs, he changed an industry. Moreover, the Southwest culture was institutionalised, so that it has survived into the next generation of leadership.
The one a tank battalion commander, the other a skilled conductor of a complex human machine, who created company styles that are the stuff of numerous adulatory management books.
In each case shareholders experienced enormous capital gains and rapid airline growth, but other outcomes could not have been much more at odds, one with a human face, the other a machine to make money (albeit helping change society through enabling pricing).
Ryanair’s arch-rival LCC in Europe, easyJet, has also performed spectacularly over the past two years.Under Carolyn McCall, one of the airline business’ rare woman CEOs, easyJet has adapted brilliantly into a new market niche and its share price has nearly tripled in the space of 12 months. Ms McCall has adopted a low profile as leader and if anything is seen as inclusive and a team player.
Enormously successful LCC, Norwegian Air Shuttle CEO Bjorn Kjos too has presided over a near-trebling of share price in the past year, while also embarking onto a long-haul operation that could provide a new Euro-Asian model. And Vueling’s Alex Cruz has navigated the LCC through a complex evolution while remaining one of the lowest cost operators in the region.
In the US, evolving LCC JetBlue, founded in the dying months of the 20th century, has also been an industry leader under CEO Dave Barger, profitable in a market dominated by the world’s largest network airlines, but imparting a renewed sense of customer service and a human face to a market where dissatisfaction with the nation’s airlines is widespread. Perhaps of all today’s major airline CEOs, Mr Barger is renowned for his compassionate nature and inclusive management.
The very fact that there are so few examples of enlightened leadership in the airline industry suggests there is a preference for conservatism in management, rather than risk taking with new opportunities – and that in turn raises the question of which is the wise direction to take.
Not everyone can easily think outside the square of airline introspection, least of all CEOs of large incumbent flag carrier leaders.
But they are the ones who most need to do it.
For more on this story, read the full CAPA analysis here.
This story originally appeared on CAPA – Centre for Aviation, a Skift content partner.
Additional links from CAPA: