Comment
Very different stories of two CEOs
June 1st 2012
Airline management is a complex and often precarious business. Chief executives live and die by results that are often the outcome of external factors rather than internal management decisions. Read More »
Coping with fuel costs, economic conditions, natural disasters and other issues outside their control is part and parcel of the challenge. Last month saw two Asia-Pacific carriers, Qantas Airways and Thai Airways International (THAI) confront those challenges in different ways.
Qantas, with it’s international arm losing more than $200 million a year, is dramatically altering its corporate structure, splitting Qantas mainline operations into two stand-alone divisions, Qantas International and Qantas Domestic. Each will have a chief executive, although Alan Joyce remains CEO of the Qantas Group.
The successful head of low-cost arm Jetstar, Bruce Buchanan, is leaving and the sweeping changes to the top management team could make success more difficult.
For the time being, Joyce’s job appears safe. Ultimately, the success of the restructure and other measures he has instigated to slash costs will decide his future.
To the north, in Bangkok, it was a different story for THAI president Piyasvasti Amranand. He has been sacked and clearly not simply for reasons of performance.
Indeed, he has more than met performance requirements, taking charge after THAI had suffered its first losses in 43 years and leading it back to profit in little more than two years.
The board said his ousting was not politically motivated, but this is difficult to believe, particularly when seen against THAI’s somewhat questionable history in this area.
Piyasvasti was appointed by the previous government and there have been persistent rumours he would be replaced by the country’s new leaders.
THAI chairman, Ampon Kittiampon, cites “communication difficulties” between Piyasvasti and the board. Yet he has had no such difficulty communicating with staff, who are more than happy with his leadership.
Qantas is a private company. THAI is majority government-owned. One wonders if Joyce had been at THAI, whether he would still be in the job. The board’s decision to oust Piyasvasti has put that carrier’s recovery plan in serious jeopardy.
It could take up to three months to find a new THAI chief executive. In the meantime, it appears the board will be having its say in the running the airline, which is what contributed to its financial demise in the first place.
Governments who own airlines must realize that if they want them to succeed, professional managers should be left to get on with the job without interference.
