Airlines' CEOs Can Do This To Airlift Business

Winds of change are buffeting every industry but none as much as the aviation sector. Two of India’s major airlines have shut down and people have to make do with what’s available and the relatively new entrants in this sector - Vistara and Air Asia.

I can tell from experience how wonderful it was to travel on Jet Airways and Kingfisher Airlines. And how, it’s almost exactly the opposite when travelling on Indigo, which my parents did twice this year and hated it. Bad food, even by airline standards, and uncomfortable seats was all they recall from their trips. I did give feedback to Indigo, and told them to stop serving watered down meals to their customers, and serve wholesome and filling sandwiches instead. In Kolkata schools, kids are getting served a way more scrumptious meal than what Indigo does to its passengers.

So, airlines need to look at all the finer details and realise that creature comforts count. But in this super-competitive world, they need to be creative, innovative and agile as well and look beyond the obvious. CEOs and leaders should foster teamwork that ensures results, stated a Survey conducted by Egon Zehnder.

It is CEOs who have to lead transformational teams where innovation, openness (so that cross-functional learning and collaboration occurs), teamwork and proficiency matters. They are required to bring their team on the same page, so alignment is needed, where shared beliefs and goals are emphasized, so the team can focus on them effectively. Efficiency is another important criteria so that resources are optimally used. Resilience will also be required to make decisions out of one’s comfort zone.

Lastly, balance is needed where a diversity of skills needed to make this sector thrive is the need of the hour. These skills, feedback can come from within an organisation or from outside, and both are going to be important because in a CEO study, 52% of leaders believed that talent from outside the aviation segment will make this industry successful, while 36% are unsure and 12% disagree.

This might be understood by many airlines but many of them are reluctant to bring in new talent from outside nonetheless. This is a missed opportunity with obviously negative results, in some cases. So, like almost all industries, human capital development is of utmost importance and even more so in aviation. That’s because this sector has a singularly monocultural kind of environment, also called silo culture by many CEOs, that favours the few, and is not conducive to diversity with regard to gender, nationality or even industry.

Human resources has to have a hand in this in a major way, as a lot of the internal motivational juice has to be provided by them to employees but they also have to drive forward a sense of entrepreneurship and foster this spirit more than ever now, as new business models need to be thought of and implemented.

As the CEO of a legacy carrier stated in the Egon Zehnder Survey, “If we do not start transforming our organization today and in a comprehensive and bold enough manner, we will be out of business sooner than we might expect. There is no alternative for me as a CEO and I feel accountable for driving a substantial change program now. There is no wait – and – see option for us.” This transformation being referred to has to be about continuously changing and adopting a long-term strategic and radical approach. There are three distinct phases of transformation.

It all amounts to CEOs becoming change-leaders from just garden variety leaders. They need to think out-of-the-box more than ever and show customer-centredness, sharp analytical and strategic thinking would also help, being cool about innovation and adopting new technologies and having political acumen, is also expected of them.

Currently, airlines are pursuing six strategies which suits their respective convenience.

• Belief in scale: One CEO explained, “We are in an industry where size matters, where the size of the network matters.” So some airlines are going this route - building economies of scale and networks that will reduce their operating costs and increase customer satisfaction. The Survey stated, “Companies playing the scale strategy can boost their odds of owning and influencing landing slots, gaining entry rights to airports, and growing their hub strategy.”
• Niche players: Cater to certain niches only and manage costs by pricing their routes that will appeal to their core travellers.
• Networked approach: This is a mix that includes the scale of an established airline and the agility of a startup. The Survey explains this as, “These airlines are designed to capture the benefits of local markets and operate on smaller scale cost structures, while tapping into the benefits of a common heritage, a broader network, and the deeper resources of the group.”
• Consumer strategy: This is about keeping the consumer happy at all costs and making them the focus of the airline’s growth strategy.
• Low-cost proposition: This is about flying travellers as cheaply as possible.
• Integrated model: This is more along the lines of a government and industry partnership that will advance a collective national agenda. This will help by producing “integrated models of infrastructure and aviation/logistics development, laying the groundwork for capacity upgrades that enables them to compete globally”, stated the Survey.

Today’s market realities are that deregulation will pick up pace, and as much as 65% believe that airline mergers will occur. Plus there is  the fact that change is the new constant. Almost, 93% of the CEOs felt that the airline sector needs to drive a sustainability agenda. So, managing customer expectations and sustainability is going to be everyone’s goals, if they hope to succeed.