Communication, trust brand and culture are key when leading an organisation through change according to Andrew Swaffield CEO of Monarch Airlines. He has successfully turned around the business returning the airline to profitability. Andrew spoke last week to an industry audience where I asked him what leadership qualities you need to transform and restructure an airline – surely one of the toughest jobs for any CEO.
Andrew strongly believes that openness, honesty, trust and good communication are key to success. He read personally as many e mails as possible from employees rather than relying on information from intermediaries. This is indeed important. CEO’s sometimes receive only good news from their direct reports. And many companies use external consultants to support their change plans. However, it is vital for the leadership team to drive the process and maintain responsibility for the tough decisions and difficult conversations. Or they will lose employee trust. Andrew also commented about the importance of other stakeholder relationships and noted how supportive the unions BALPA and UNITE had been in the process.
So what was achieved and what pain did the business go through? Monarch moved from a loss in 2014 of £94m to reporting £40m of underlying profits last year. The airline has been streamlined into a low cost scheduled European carrier. The business reduced costs by £200m, lost 700 employees with those who stayed agreeing to 30% pay cuts and modernised terms and conditions. It reduced its aircraft fleet by 10 and new owners Greybull Capital were found.
Andrew said he was attracted to the airline because of its reputation for great service, a great brand, excellent staff and loyal customers. ‘” These are hard to build –as hard as it is to do, it is much easier to restructure and cut costs, and rationalise a fleet than it is to build a brand, change a culture and gain customer loyalty”. I worked with Andrew at British Airways in the early 90’s, and know him to be marketing and people led. All too often restructure is driven purely by the bottom line and the harder to measure cultural and brand values are neglected.
The remarkable turnaround has been achieved despite severe challenges of terrorism and markets closing. The closure of Tunisia and Sharm El-Sheikh, the migrant crisis dampening Greek bookings, bombs in Turkey and the Paris and Brussels attacks have all dampened consumers desire to travel. Andrew stated “We have now set what we call our True North, which is our unchanging goal for the long term to be Europe’s most recommended airline group, as measured by customers”. He’s also modest as he described himself as a ‘lucky general’!