What is takes to be an airline CEO?

[BOHICAgain]

A complete lack of talent, ethics, and morality.

BINGO... ever watch WALL STREET

 

[whymeworry?]

The problem with airline CEOs is most have never worked in labor. Airlines are a very labor-instensive business. If you don't master the art and skill of working with labor, you are never going to make it as a leader long term.

They can't teach labor at Harvard/ Yale/ or any other business school. You have to spend time working on that side of the fence to learn what works and what doesn't. You have to get into the mind of your employee to understand him/ her. As a businessman myself, I always apply this principal when it comes to working with my labor pool. I certainly can't give away the store, that would be fooling business and fiscal practice; however, I can prevent a lot of frustration and distraction in the business if I just take the time to understand them, rather than wielding my "Big Boss" sword.

In the context of pilots as labor. They are the asset managers of the business. The number one asset in an airline is the airplane. Pilots control that plane from pushback to block in. They can taxi fast or slow, take initiative or just "do their job", save fuel or not, and most implortantly fly fast/ direct or not. The larger the plane the higher the by-the-minute cost. The larger the airline the more the potential exists that unmotivated pilots can decimate the bottom line due to economies of scale.

Airline managers, including CEOs, histroically maintain a rather adversarial relationship with their pilots (asset managers) and that ignorance translates to millions of dollars in extra costs at the bottom line. It would be in their best interest to work with the pilots and bring them into the fold as mgrs rather than beat them up because once the door closes and the jet is airborne, the pilot is in control of any extra costs for that flight. Pilot moral is one of the many keys to success at any airline. Don't manage the moral factor and you're staring down the barrel of a gun. Just look at what happened to NW this summer. UAL is struggling as well. Low pilot moral isn't helping UALs present dilemma when it comes to getting back into the black despite their CH11 process shedding billions of dollars of debt.

No airline has ever been successful in the long term by pummeling it's labor. Sure it may cost more to pay a bit more but that increased costs translates into a higher ROI (return on investment) over time.

And it's not all about costs. Sometimes it purely respect. I have seen our management refuse to provide a crew meal to a capt who was flying a 8.5 int'l flight. When they could have simply done the right thing and gave the guy a $6.00 meal, they chose to take it to a level 3 grievance and deny him what he felt was contracturally his. How much do you think that will cost the company over time? At let $20,000 from that one employee I would surmise. why would you want to expose your business to that kind of workplace behavior?

It's kind of like telling the neurologist he's a fkhole on your way into the operating room. Once you treat him with such disrespect, do you really think he's going to do the best job he can on your brain surgery despite the fact that he is suppose to give the utmost care?

I have worked in mgmt. I have run small charter airlines. I learned early on, its costly to fk with your pilots. So why would you? The only explanition I can come up with it simply because you don't understand this dynamic. Airline CEOs have no clue when it comes to pilot, and for that matter, labor mgmt.

 

[NuGuy]

Heyas,

Wow...that should go into FI Hall of Fame, "quality post" category.

WMW, very nice post.

Nu

 

[PhatAJ2008]

Thanks for the info, I will check out those books

 

[whymeworry?]

Heyas,

Wow...that should go into FI Hall of Fame, "quality post" category.

WMW, very nice post.

Nu

Thanks. Sorry about the grammar/ spelling errors. I tried to fix it but the edit button is not available for this post for some reason.

 

[pilotyip]

Management makes it happen

This is repeat but if fits here. This is a pilot board so saying anything in defense of management is like peeing into the wind, that it is going to come back to you. CEO's are not intentionally running airlines into the ground. They would very much like to succeed. For lack of other reason it would make their resume look great, they would be doing something no other CEO had ever done. Top management includes many besides the CEO, the CEO sets direction as requested by the board. The CEO has little control over the airline, the airline is run by regulation and union contracts. They are at the mercy of the purchasing public, who with Internet access has made the airline ticket a perfectly elastic commodity. There is little they can do inside their structure. Other high paid top management personnel, in Operations, Maintenance. Marketing, Legal, Finance, etc. have unique skills in dealing with large organizations. This makes them marketable when shopping for a job, unlike pilots whose skills are nearly universal. An issue of ATW in 2002 had an article about “Airline Management a dying breed”, the article basically said no one wants to do it. The good track record CEO’s are going to other industries. With tremendous, payrolls, overhead burdens, and extremely low margins, there is no tried and true path to success. Most have tried to increase market share, but this has lead to low price and ridiculous breakeven load factors in 95% range. What is management supposed to do? Eliminating management will bring the end quicker for the airplane industry, and their salaries are insignificant to the airlines operating costs. Without management you could not operate the airline, The FAA would shut it down without approved Part 119 key management. Would the pilots step up and become management for free in their spare time? Why is every time, pilot salaries come up, they are immediately compared to top management. I saw an article in ATW in 2001 that stated at DAL there were 17 members of top management made more than the top DAL Captain. The combined top 17 salaries equaled less than 1/6 of 1% of the combined pilot salaries. If management worked for free all pilots in the company would get a 1/10 of 1% raise. (for a $100K per year pilot that would be $3/wk increase in take home) Boy that raise would really make the pilot group happy. Top management possesses skills that allow them to move from job to job and command high salaries. And every one of these managers wants to see his/her airline prosper. They just can not do it.