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Approach Mesa Air Boss With Caution

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Mav204

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[FONT=arial,helvetica]New York Times
January 19, 2007
Approach Boss With Caution
By JEFF BAILEY

PHOENIX — On a scale of one to 10, with 10 being the most volatile personality, Jonathan G. Ornstein, chief executive of the Mesa Air Group, cheerfully admitted, “I used to be an 11.”

Mr. Ornstein, 49, will not hazard a guess as to his current level of hotheadedness, but some in the airline business say he still rates double-digits. “I don’t know that I’ve ever hung up on anyone in my life — except Jonathan,” said Scott Kirby, president of US Airways, which, employing Mesa to fly smaller planes on shorter routes, is Mesa’s biggest customer.

Mr. Kirby said he had handled the Mesa relationship for nearly a decade “frankly because I was the only person who could deal with Jonathan at times.”

“He’s loud, volatile, insulting, doesn’t listen to the other perspective.”

College dropout, stock market fanatic, motorcycle enthusiast and, on occasion, an uninhibited dancer to hip-hop music, Mr. Ornstein is a throwback to an era when airlines tended to resemble the personalities of their chief executives.

And if his personality is outsize, so are Mesa’s ambitions. He wants to make the regional airline global. In December, Mesa announced it had formed a joint venture to start a regional airline in China, with plans to have 20 jets in service in time for the Olympic Games in Beijing in 2008. And in June, Mesa began flying among the islands of Hawaii with a new subsidiary, Go, setting off a price war there.

Yet for all his grand plans, Mr. Ornstein’s core business is relentlessly detail- driven — keeping 200 small planes on schedule for 1,300 daily flights and keeping costs low enough to hang on to the likes of US Airways as a customer.

Regional airlines have grown rapidly since 2000, faster even than low-fare carriers like JetBlue. That has happened as big network carriers like US Airways, United Airlines, Delta Air Lines and Northwest Airlines jettisoned many of their airplanes in bankruptcy and turned to smaller jet operators to fly less popular routes.

Now, however, that shift has slowed and the big airlines are trying to pay the regional carriers less.

Pay scales are low at airlines like Mesa, but the rapid growth has helped buy labor peace, as first officers move quickly to captain. When growth stalls, as it has recently, pilots and others can become frustrated and demand better pay and benefits.

Mr. Ornstein, prone to outbursts against organized labor, is currently locked in a dispute with the Air Line Pilots Association, which represents Mesa’s 1,800 pilots. The union sued Mesa in an effort to force the airline to stop rejiggering pilot schedules, which the union said ran roughshod over seniority rights in an effort to hold down costs.

The union leaders became so angry that in November they issued a no-confidence statement regarding Mr. Ornstein. He called the moves posturing in advance of contract negotiations. “They sort of have a script,” he said.

Either way, Mesa can be a hard place to work, particularly in proximity to Mr. Ornstein.

Stacy Heath, employee relations and events manager at Mesa, was until recently Mr. Ornstein’s administrative assistant. Her tasks included tracking his mood and warning executives away from a meeting with the boss. “They would call and say, ‘Is he in a good mood?’ I used to laugh, but I do it now, too.”

Mr. Ornstein, who grew up in Scarsdale, N.Y. , said the high-decibel communication style he learned from his family was a healthy way to deal with conflict. “Being upset comes and goes in 10 minutes,” he said.

But upset seems to come more than it goes with Mr. Ornstein. Ms. Heath, who spent nearly six years as his gatekeeper, said: “Maybe 60 percent — maybe even higher than that — he was not in a good mood. Sometimes he would come in to the office in a bad mood in the morning and it would set the tone for the whole office.”

So what was eating at Mr. Ornstein, who says he has a lovely wife and children and enjoys good health? Ms. Heath said, “A lot of it has to do with the stock market.”

She was not referring to Mesa’s stock, which has suffered the same wide swings as most airline stocks through the years. Mr. Ornstein, a stockbroker for nearly a decade before joining the airline business, admitted he had a recurring stock-picking habit, and said that in a good year his market gains could outweigh his substantial airline pay. In the year ended Sept. 30, 2006, Mesa paid him about $1.6 million in cash and stock and he had a $2.8 million gain from exercising stock options.

Two years ago, Mr. Ornstein said, he became convinced that the old network airlines would come roaring back and he loaded up on those shares. He also bet that shares of JetBlue would fall, he said, because he was convinced that rising maintenance costs would eat into its profits as its once-new fleet of planes aged. Those were winning bets (he would not discuss the losing stock picks).

His worst investment decision, however, may have been passing up an opportunity for Mesa to buy $150 million of US Airways shares as the big carrier was exiting bankruptcy in late 2005. Its stock then tripled. “I kick myself,” Mr. Ornstein said.

He worries that he has become too risk-averse. Without naming the target company, he said he recently decided against a takeover of another airline in part because of a losing and brutal battle Mesa made for Atlantic Coast Airlines in 2003. “It slowed me down,” he said.

And after hopping around earlier in his career — he left Mesa to run Continental Airlines' regional operation, then went on to start Virgin Express, a low-cost European airline, for Richard Branson, then came back to Mesa — “I think I’m done moving around,” Mr. Ornstein said.

China, in addition to being a huge growth opportunity, gives Mesa a place to send its planes should it lose business with bigger airlines in coming years. And the ability to shift planes abroad also gives him more bargaining leverage with the pilots union — ask for too much and the planes you’re flying disappear.

But by keeping Mesa’s costs low, Mr. Ornstein hopes to pick up business as Northwest and Delta decide whether to replace aging jets like DC-9s and MD-80s, or turn over some routes to regional airlines.

For all his grumpiness, Mr. Ornstein knows how to have a good time. At Ivan Kane’s Forty Deuce nightclub in Los Angeles, Ivan Kane, an owner, said he immediately took a liking to Mr. Ornstein, who frequents the club, often with 5 to 20 friends. “I saw the energy he brings to the room,” Mr. Kane said. “He’s very generous, so the staff loves him.”

On a recent Saturday, Mr. Ornstein and his wife, Lisa, ended up sitting with Sting, the singer, who was celebrating the birthday of his wife, Trudie Styler, and with Russell Crowe, the actor. Mr. Ornstein and his guests have been known to end up on stage, dancing, Mr. Kane said. Ms. Heath said: “Oh my gosh, he loves to dance. Hip-hop. That sort of thing.”

While being confrontational with unions, Mr. Ornstein goes to great lengths to be in direct contact with Mesa employees and to curry their favor. Mesa’s holiday party is tomorrow night at a nightclub in Phoenix, where Mesa is based, and Ms. Heath, the party planner, is expecting 1,300 workers and spouses. Mr. Ornstein will personally give away 80 or more door prizes. Go-go dancers — with pilot caps, wings, ties and hot pants — will be up on the tables. Mesa gives a similar party for East Coast workers and a Phoenix water-park party in the summer.

Mr. Ornstein also runs a perfect-attendance contest, a drawing that awards one worker a free car every year. And he encourages all employees to e-mail him directly and he said he answered all messages.

He gets management advice, often from pilots. “Sometimes the best way to streamline financially is to spend some money,” wrote one. “Expand personnel so that everyone isn’t bogged down so much.” Another pilot warned Mr. Ornstein about a chart posted in the Dulles International Airport break room for Mesa pilots that made Mesa’s pay look poor compared with SkyWest, a competitor. “Doesn’t help morale,” the pilot said.

“I find out about a lot of things I wouldn’t normally know about,” Mr. Ornstein said.

So when David Butler, senior vice president for human resources at Mesa, told a subordinate to stop sending Mr. Ornstein copies of what he thought were trivial e-mail messages, Mr. Butler was called on the carpet. “ ‘You cannot tell people not to e-mail me,’ ” Mr. Butler said Mr. Ornstein told him.

Despite rankling many, Mr. Ornstein also forms strong friendships. Mr. Kirby, the US Airways president, said, “We can literally have a screaming match where one of us can hang up on each other and then play golf together.” Mr. Kirby said that Mr. Ornstein’s ferocity “seems personal, but it’s really not.”

“As long as you’re not insulted, the result it pretty good,” Mr. Kirby said.

Ms. Heath, after being yelled at on the phone early on by Mr. Ornstein, said she confronted him. “The next time he came in the office, I said I didn’t deserve that,” she recalled. “He had respect for me.”

But friends remain taken aback by his intensity. Frank Johnson, a former player and coach for the Phoenix Suns basketball team, regularly plays pickup games at a local gym with Mr. Ornstein, who lists himself at 5-foot-9.

A fierce defender and point guard in his day, Mr. Johnson appreciates his friend’s competitiveness — “he’s not afraid to foul” — but has had to say at times, “J.O., relax.”

“Jonathan views it as an outlet,” Mr. Johnson said. “But is this really an outlet if you’re getting that upset? I’d hate to see you at work.”
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The union sued Mesa in an effort to force the airline to stop rejiggering pilot schedules,


Rejiggering?

It'd be interesting to see a few regional guys sneak into one of his pick up B-ball games and foul him back. An elbow to the nose would do nicely.
 
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This article is like the battered white trash chick on COPS who starts crying when they take away her man. Freaking rediculous.
 
[FONT=arial,helvetica][FONT=arial,helvetica]China, in addition to being a huge growth opportunity, gives Mesa a place to send its planes should it lose business with bigger airlines in coming years. And the ability to shift planes abroad also gives him more bargaining leverage with the pilots union — ask for too much and the planes you’re flying disappear.[/FONT][/FONT]

Wow...
 
He's got to be a Catch-22 for those who work for him. It sounds like a growing company but the wages, treatment, and benefits are below par.
 

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