2019 Travel CEO/head moves; review

[] Air heads.

-Cathay Pacific Group, Hong Kong (CPG; Dragon, Pacific, HK Express).

Hong Kong’s social disturbances, starting July 2019 and continuing, caused collateral damage at CPG. In brief, and much simplified:

-Protests began in June over a proposed law that would allow Hong Kong ‘citizens’ to be extradited to China, for non-political charges only.

-China required CPG to name flight crews for China-mainland flights — adding that those who had joined Hong Kong’s protests would not be allowed into China as they would be considered ‘terrorists’.

-John Slosar, chairman, said CPG would not punish staff for expressing their own opinions. CPG later changed its position, including firing at least four staff including two captains, and giving names for pre-approval for China-mainland flights.

His actions later proved Slosar’s statements a lie. An official communication to Hong Kong’s stock exchange indicated that Slosar had no disagreement with company — which would appear to indicate that he supported the sackings and the control on staff thinking. But why then resign/retire — particularly at that time, and particularly with just over one month’s notice?

-Rupert Hogg, CEO CPG since only mid-2017, resigned August 2019.

-Then Slosar resigned/retired November.

Replacements:

-Patrick Healy, 53, chairman. He joined Swire, CPG’s main shareholder, in 1988. The route to CPG chairman has usually followed a period as CEO. Healy’s appointment was a sign that times are not normal.

-Augustus Tang Kin Wing, CEO. Tang joined Swire in 1982 and has also worked with CPG.

-At HK Express, Ronald Lam was named CEO. He has been with CPG 20 years. But a few days later, Lam was moved to CP to fill an executive gap there, when Mandy Ng was named CEO; she also is steeped in CPG/Swire culture, having been at CP for 17 years.

-Norwegian. Bjorn Kjos became CEO in 2002, changing it from a domestic airline into a Europe-wide airline, as well as operating transAtlantic flights and even a domestic airline in Argentina. In June, he announced his departure and left — boom, just like that.

He was praised widely. We were one of the few who warned of bad choices from the beginning of its expansion out of Europe. We noted many, including:

-Wrong name. ‘Norwegian’ might be ok for all-Europe flights, but not for transAtlantic flights, particularly when flying from the UK, and not for flights from New York to France’s Caribbean colonies. A non-geographic name was needed — even ‘Bjorn’ would be better.

-The transAtlantic flights from UK will probably not survive the UK’s departure from the European Union, due January. Norway is not an EU member, but has a commercial agreement with the EU that means, in effect, it can operate as an EU airline. But that will likely end for UK flights this year.

Norwegian lost US$173mn (Nk1.5bn) in 2018.

There was much between-the-lines criticism of Kjos in chairman Niels Smedegaard’s comments: “We have to ensure that Norwegian is well prepared and positioned to handle volatile markets and unexpected events. It is crucial that we continue to deliver on our cost reduction initiatives and that we constantly ensure that we have a route portfolio that yields profit. It is also important that the new CEO develops an organisation that embraces continued improvement and operational excellence.”

CFO Geir Karlsen became interim chief executive; he was named deputy CEO in April. Starting January Jacob Schram becomes CEO. He has worked at Circle K, Statoil Fuel, McDonalds, McKinsey, which would not seem to qualify him. But he is Norwegian, which probably helped.

-Others.

-Air France named Anne Rigail CEO; sort-of appointed by Benjamin Smith, Air France-KLM’s newish CEO, and replacing Franck Terner. Her most important qualification is her French nationality. And being a woman may help AF manage its destructive unions — which act as though they, not the customer, are king. And it may help that Rigail was EVP Customer at AF.

-Air New Zealand named current Walmart US CEO Greg Foran as its chief executive. He joined Walmart in 2011 and has been its US CEO since 2014. He replaced CFO Jeff McDowall who had been acting CEO from September after Christopher Luxon resigned in June.

-Alaska Airlines. Ben Minicucci new president.

-Avianca Holdings, Colombia. Anko van der Werff CEO.

-Icelandair Group; Bogi Bogason president/CEO.

-IndiGo (nee InterGlobe Aviation), India. Ronojoy Dutta CEO.

-Jet Airways, India. In March, Naresh Goyal, chairman, and his wife Anita, director, left. Naresh G founded the airline 25 years ago, but in effect they were forced out/fired, following a bailout plan for the airline, but it still stopped flying in April after funding was refused.

-Lufthansa Group (LHG) from January: Christina Foerster, ex-CEO of LHG’s Brussels, to LHG board; Jens Bischof, ex-CEO of Sun Express (a LHG JV with Turkish Airlines), to CEO Eurowings*; Dieter Vranckx, with Lufthansa since 2001, to CEO Brussels.

*Lufthansa wants Eurowings to ‘return’ to profitability in 2021. That will be hard, as LHG’s business plan made it unprofitable in the first place, and it has not announced any changes. In earlier reports, we have listed LHG’s mistakes.

-Ryanair, Ireland. CEO Michael O’Leary moved on — well up actually, to Group CEO. Because Ryanair is technically four airlines — Buzz, Lauda, Malta, Ryanair — although only Lauda and Ryanair are currently operating.

Taking over as CEO Ryanair, the key airline, is Eddie Wilson. He has been with Ryan for 22 years, most recently as chief people officer (ugh).

-South African Airways. CEO Vuyani Jarana resigned, citing insufficient funds for a turnaround. Acting CEO Zuks Ramasia replaced him; she was operations general manager.

SAA’s board acknowledged “critical financial circumstances” and wants to create “a financial structure appropriate to supporting the long-term sustainability of the company”. Sounds good — but how to do it?

-Virgin Australia. Paul Scurrah, named CEO and MD, from March. He replaced John Borghetti, who earlier said he would leave this year, after 10 years in the job.

As we said, the company searching a replacement would search the world, and then appoint someone local. It would be difficult to charge search-company fees if a world search was not made.

Scurrah was CEO at DP World Australia (a Dubai state-owned company) and Queensland Rail. He has also worked at Flight Centre, a travel agency group, and Tourism Queensland, an STO.

These may not have provided Scurrah with the experience to make the tough decisions needed at VA.

VA has structural problems at two of its three main divisions. Its international division is weakening in Australia’s liberal-thus-very-competitive airline market. And domestically, its main airline is stagnant. Well, we think so. In some periods it has issued figures for a 6-month period — a practice that the stock exchange should stop.

And there may be problems at its third division, its Tiger no-frills-airline subsidiary. This is also not expanding (Australia was early into the NFA business, and appears to have reached a plateau).

[] Hotel heads.

-Others.

-Easy Hotel, UK. CEO Guy Parsons resigned following a takeover; he had been in the job for four years. Scott Christie, non-executive interim chairman, became interim CEO.

-Four Seasons, Canada. John Davison, interim CEO since end-2018, confirmed in the job in June. He has been 18 years with FS.

There will be no noticeable changes of direction or policy. Despite Davison’s title, FS is still run by Isadore Sharp, who founded the company in 1960. Nevertheless, there must be a mortal likelihood that Davison will still be there when Sharp dies.

That said, CEOs do not last long at FS. Kathleen Taylor was fired in 2013. Replacing her was Allen Smith, who left after his 5-year contract. At the end of Davison’s contract, Sharp would be 92.

-LHW (Leading Hotels of the World), US. After the surprising departure of Ted Teng as CEO in April, his interim replacement, Shannon Knapp, was confirmed in the job in October.

-Minor differences. Minor Hotels CEO Dillip Rajakarier has been named CEO of Minor International, starting January. He also keeps the MH job.

-SHKP Hotels, Hong Kong. Surprisingly, Ricco de Blank resigned after 10 years as CEO. As its name indicates, Sun Hung Kai Properties is a real-estate company but it owns 19 hotels, most managed by other hotel companies. It manages four, all in Hong Kong, three using the ‘Royal’ name.

-Six Senses, Thailand. Bernhard Bohnenberger, president, resigned following InterContinental’s purchase of the brand in February. He had been 28 years with SS.

[] Industry heads.

-Boeing, US. fired CEO Dennis Muilenburg in December, (belatedly) following two fatal crashes of its B737MAX, and the (possibly permanent) shutdown of the aircraft’s production line.

Muilenburg gets a payoff in stocks worth US$60mn. This is one of the current perceived problems with capitalism — where a businessman failure, also indirectly responsible for over 300 deaths, can be awarded a giant sum.

CFO Greg Smith is interim CEO until January, when David Calhoun is due to take over. This is apparently permanent, although Calhoun was chairman and thus directly responsible for supervising Muilenburg. Board member Lawrence Kellner takes over as non-executive chairman.

Many commentators believe that Boeing needs an engineer as CEO, to rebuild confidence in Boeing aircraft. But Calhoun is not that.

He is a ‘GE Man’ (GEM; they have all been men) — meaning a follower of Jack Welch, head of General Electric until retiring in 2001. Calhoun also worked at GE 1979–2006. GEM themes are, broadly: fierce, inflexible, management; quickly firing non-performers; concentration on cash rather than technical innovation. GEMs have been running Boeing since 1997.

There are many criticisms of GEMs, and not all have been successful — most notably Welch’s successor at GE, Jeffrey Immelt, generally considered a failure after his 16 years as CEO — leaving GE dangerously-weak.

-Others.

-AAPA (Association of Asia Pacific Airlines), Malaysia. Andrew Herdman, after 15 years as head, is due to leave this March. He joined AAPA from Cathay Pacific. Due to take over is Subhas Menon, who most recently was VP Europe at the Singapore Airlines Group.

-Airbus, France. Named Guillaume Faury its head; a French national, he had headed company’s helicopter division since February 2018. He replaced Tom Enders, a German national, generally well credited during his seven years running the company.

-ICAO (International Civil Aviation Organization), Canada. Salvatore Sciacchitano, from Italy, due to start January as president. He succeeds Olumuyiwa Aliu, from Nigeria, who held the job for two terms. Sciacchitano was in state aviation jobs in Italy until 2010, but then became executive secretary at the European Civil Aviation Conference — a sort-of European ICAO.

-ARC (the Airlines Reporting Corporation, handling financial settlements between US-based travel agencies and airlines), US. Mike Premo, president/CEO, due to retire end-2020. Lauri Reishus, currently EVP/COO, due to take over then. Reishus joined ARC in 2005.

-Booking*, US. In June, Gillian Tans president/CEO, moved out, and Glenn Fogel, chief executive of Booking Holdings, the parent company, took over immediately, presumably on an interim basis. Tans was named chairman of Booking.com, a new position.

In 2016 Darren Huston, had been summarily fired as CEO of Booking.com.

Skift reports that there may have been disputes between Tans, Fogel, and Steve Hafner, Kayak CEO, over how the different brands should work together, or not.

Under Jeffery Boyd, the former Booking Holdings CEO, group strategy was to let its brands operate independently. Under Fogel, Kayak is now responsible for OT, Rentalcars is now within Booking.com, and Agoda works closely with Priceline.

*Notes. The group brands comprise Agoda, Booking.com, Kayak, OpenTable, Priceline, Rentalcars.com.

-CLIA (Cruise Lines International Association), US. Kelly Craighead named president/CEO from January, taking over from Cindy D’Aoust. Craighead was deputy secretary at the US department of commerce for travel; that is close to what most destinations would describe deputy minister of tourism. CLIA is mainly a US trade body, although it has members in other world regions.

-Embraer, Brazil. Francisco Gomes Neto succeeded Paulo Cesar de Souza e Silva as president/CEO of the aircraft manufacturer.

-Expedia, US. CEO Mark Okerstrom resigned December following a disagreement with the board. Also gone is CFO Alan Pickerill. Chairman Barry Diller and vice-chairman Peter Kern have taken over while the company looks for permanent replacements.

Diller says an “ambitious” reorganisation plan to bring brands and technology together resulted in a “material loss of focus on our current operations”.

Specifics are not known, but Diller forecasts growth (no further definition) this year.

Eric Hart, Chief Strategy Officer, becomes acting CFO.

Diller has been chairman since 2002 when his InterActiveCorp bought Expedia.

-FAA (Federal Aviation Administration), US. Stephen Dickson head (the title is ‘administrator’) of the civil aviation body. He and his deputy are both former military officers — which is not supposed to happen. But in a disarmingly-simple way to ignore rules/guidelines, the government has issued a legislative waiver of that requirement.

-IATA (International Air Transport Association), Switzerland. New chairman at is Carsten Spohr, CEO at the Lufthansa Group. The job is largely honorific and generally for one year. Spohr takes over from Akbar Al Baker, CEO at Qatar Airways.

The man who runs IATA (there has never been a woman) is Alexandre de Juniac, Director-General/CEO.

-ICCA* named Senthil Gopinath its new CEO from April, replacing long-time incumbent Martin Sirk, who left suddenly mid-2018. Gopinath had been at Emirates, VFS Global (which does visa-related work for countries and companies), and the Sri Lanka Convention Bureau. There were many unclear statements about his previous jobs, which we questioned, but never got a satisfactory response.

ICCA was initially an abbreviation for the International Congress and Conventions Association. Then it used ICCA as a name, which it described as The International Meetings Association. It has now reverted to almost the same — ICCA, International Congress and Convention Association.

-Norwegian Cruises, US. Named Harry Sommer president international, a new role, reporting to president/CEO Frank Del Rio.

-Travelport (owner of Galileo), US. Gordon Wilson, CEO since 2011, left August. Greg Webb took over; he had been SVP at Oracle Hospitality.

[] Officialdom heads.

-Others.

-Cologne Tourist Board. Josef Sommer, CEO, retired December, with Juergen Amann taking over. Sommer had been 20 years at CTB; Amann was head of Dresden Marketing.

-CRT, the regional promotional body for the Cote d’Azur (CDA) in France. Claire Behar named DG. The problem for Behar is identity of the region she is promoting. Because CDA is also known as the South of France, the French Riviera, or sometimes by the names of some of its main cities, Cannes, Monaco/Monte Carlo, Nice, St Tropez.

An auxiliary problem is that CRT does not recognise that problem, believing CDA is a brand recognised worldwide.

-European Cities Marketing, Belgium. Petra Stusek, from Ljubljana, Slovenia, elected president.

-Atout France*. Christian Mantei, who had been director general for 10 years, took over in April from Philippe Faure as CEO. His job taken by Caroline Leboucher. Despite those titles, we interpret roles as Mantei similar to chairman, and Leboucher CEO.

Leboucher has been primarily in government jobs — AF is one of the many DMOs that appoint those with government experience, even though most of the work is with the private sector. In her last job she was with Business France — unusually, a sensible name, which might encourage her to change the name of Atout France — we think it should be France Tourism.

*Notes: Despite that name (it means something similar to Advantage France), this is France’s DMO (destination marketing organisation). Its earlier name was the similarly-obtuse Madison de France — House of France.

-Meet in Reykjavík. Sigurjona Sverrisdottir became MD of the city’s convention bureau.

[] Words (paraphrased).

-Keith Barr, CEO InterContinental Hotels.

When I started in 2017, I saw big companies getting bigger, having a full brand portfolio. I knew IHG needed to grow faster to maintain its position. Our new brands are:

-Atwell. All-suites, combining extended-stay and select-service characteristics in upper-midscale. Atwell is in the 4–6/night range.

-Avid. New-builds in midscale. We are ruthless about getting the cost-per-key right.

-Voco. Targets upscale conversions outside the US.

-Regent. We had been pursuing Regent Hotels for a decade.

-Six Senses. A great fit to the portfolio.

We are introducing automation and artificial intelligence into our transactional activities, essentially robotising tasks like travel agency commissions, and down-the-line tasks such as complaints, content queries, reservations.

Cloud-based technologies, such as our guest-reservation system launched in 2018, are another priority.

Everything has to move to the cloud. It’s about agility and security. I never debate the technical; I debate the strategic thinking behind it. Should we be building something, or partnering, or buying a capability?

-Eric Danziger, CEO Trump Hotels.

We try to assure people that there’s a difference between Trump politics and Trump hotels — we are not political. We just run great hotels. For a brief period after he was elected, people did not differentiate. But for a month we did lose people staying at the Chicago property — not because they didn’t like Trump or the hotel. But the 2000 protestors in front of our hotel.

We said when he was elected that we would not do a job outside the US — to avoid any wrong impressions. Once that restriction is lifted, in either one or five years, we will turn up our international profile significantly.

We do have two golf resorts underway in Indonesia and Bali. They are the only ones, because they were underway before we announced the moratorium. We had to back out of many deals, but all those can be resurrected. Remember that we are a private company; we are playing a long game so we don’t have to hit shorter results like most companies. So, we will do them all when it’s the right time.

Notes: This interview was conducted before the Trump organisation cancelled plans to launch Scion and American Idea hotel brands. The second seems to be a mistake; given President Trump’s ‘Make America Great Again’ that brandname should surely be American Ideal? Even if that also is not a good name for a hotel group, surely it is better than American Idea? Did someone mishear an instruction?

[] Life/death.

-Alwin Zecha, 83, died in March following a heart attack; he had earlier recovered from cancer. He was one of five brothers. Better known in the travel industry was an older brother, Adrian, through his work in the hotel business — mainly Regent and Aman Resorts.

All brothers had initials AZ, and one story was that they could buy one membership of a club under the name A Zecha, and all five could get access. Also, their wives had to change their first names so that their initials were BZ.

Although Alwin had been in other activities, including publishing, his travel operating business was the Pacific Leisure Group, founded in its first form in the 1960s.

Zecha was Indonesian by birth, with Chinese, Dutch, Indonesian ancestry.

His activities outside PLG, though, through what is now PATA (Pacific Asia Travel Association) brought him ‘fame’ beyond that which running a biggish travel agency group would normally bring.

Zecha had an important role in moving PATA’s head office from San Francisco to Bangkok in 1998. He was also responsible for changing PATA’s name, in 1986. Originally, its initials meant Pacific Area Travel Association. Because of the growing importance of Asia, we proposed changing its name to the Asia Pacific Travel Association. This idea was accepted by Zecha, but he made an important adjustment to keep the PATA ‘brandname’, and made the change to ‘Pacific Asia’ instead.

-Herb Kelleher, 87, died in January. Kelleher is generally credited as founder of Southwest, also generally considered the first sizeable NFA (no-frills-airline).

However, SW’s founder and financial backer was actually Rollin King (sic). Kelleher was (only) King’s lawyer, but who was also given the job of SW CEO.

According to the legend, SW’s start-up businessplan was written by Kelleher and King on a restaurant napkin. We think that if it that is true, it read ‘Copy PSA’. Most people do not give credit to PSA (nee Pacific Southwest Airlines, an intra-California airline in the late-1960s), but Kelleher did.

SW directly copied from PSA many other marketing tricks — most notably with sexily-uniformed stewardesses.

Europe’s most-successful NFAs, Easyjet and Ryanair, copied the essence of the SW/PSA businessplan. So did Asia Pacific’s Air Asia (although its CEO credits Easyjet for inspiring him).

-Others.

-Rabindra Adhikari, Nepal’s tourism minister, died in a helicopter crash in Nepal in February. Also among the seven who died were Ang Tshiring Sherpa, owner of Nepal’s Yeti Airlines, and founder of Dynasty Air, operator of the helicopter that crashed.

-Barron Hilton (Barron is a name, not a title) died in September, aged 91. He was son of Hilton founder Conrad Hilton and a former head of the hotel company. Despite the accolades, his younger brother Eric (who died in 2016, aged 83) was the smarter one; arguably, it was Eric who ran Hilton as VP, even if Barron had the CEO title.

-Niki Lauda died in his sleep in May, at a hospital in Zurich, where he had been undergoing dialysis treatment for kidney problems. He was 70.

He was an Austrian F1 car-race champion but after a serious crash, he went on to found three airlines. He was a successful racing driver, but a failed airline entrepreneur. His first was Austria-based Lauda Air, which struggled and was then bought by Austrian (before Austrian was bought by Lufthansa), and shut down.

Then it got complicated.

Lauda the man created Niki as a no-frills-airline (well, some frills), but then sold to Air Berlin. But under AB, Niki became a confused hybrid — as was AB itself. Abu Dhabi’s Etihad bought into AB, but could not stop losses, and subsequently shut it down. Lauda then bought parts of the rest of Niki, and renamed it Lauda Motion (LM).

Ryanair bought LM, which became a subsidiary of Ryanair Holdings. LM forecast it will sell 10mn seats annually starting around 2021. Niki did not publish traffic statistics before, but we estimate they would not have reached 5mn annually.

If Ryanair achieves that, then it might ironically be Lauda’s only airline success — three years after he died.

-Wolfgang Mayrhuber, former chairman/CEO of Lufthansa, died from cancer in December 2018 aged 71. He joined in 1970 as an engineer, and later in 2001 joined Lufthansa’s board, then deputy chairman, then chairman/CEO 2003–10, then chairman of the group’s supervisory board 2013–17.

Although well respected, he was slow to establish a no-frills-airline subsidiary, and once said the group would not have an NFA. When one was finally created — now nominally-defunct Germanwings — he would not let it compete against Lufthansa, and so it failed. Mayrhuber preferred the solid airlines, buying Swiss then Austrian.

-James Parker, a former Southwest CEO, died January, the same month as Southwest co-founder Herb Kelleher (see other story), He was running the airline at the time of the 911 terrorist attacks in 2001, and was succeeded by Gary Kelly, current CEO.

-Lucio Tan Jr (LTJ), son of Philippine Airlines’ founder, and PAL head (apparently; read on), died November. In June, president/CEO Jaime Bautista resigned, and then Gilbert Santa Maria was named head in October. In the same month, LTJ was (also?) named head. Some in PAL explained that Santa Maria headed the airline, while LTJ headed PAL Holding, PAL’s owning company. Before all this was clarified, LTJ died.

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