Why don't women run airlines?
IT WAS INTERNATIONAL WOMEN’S DAY on the 8th of March, 2010, and the Indian Ministry of Civil Aviation proudly “acknowledged” flag carrier Air India’s historic flight between Mumbai and New York JFK. It was unique that day in that flight AI-141 operated with an all-female flight crew on the B777-200LR. There was no Air India man in sight. It was different at head office.
(This report, the first in a series of four, is taken from the Oct-2010 edition of Airline Leader.)
The full publication can be viewed here.
The the same Air India profile does not apply, either for the airline’s management, or its Board.
Despite India’s generally favourable attitude to women in high places – notably in politics – on that day the company counted just one woman board member among the ten directors. In management, the balance was rather more generous, with six of the 36 senior executive team women – yet only one of them reports directly to the CEO.
On the same dedicated Women’s Day, you could have counted on the fingers of one hand the female CEOs of commercially significant airlines across the world. There is little immediate prospect of a great shift in this profile – either at Air India, actually one of the more women-receptive employers, or in any other airline.
And that is where our story begins.
THE AIRLINE INDUSTRY IS NOTORIOUS for its “boysy” silhouette. It is a business which revolves around big boys’ toys, engineering and industry regulation. The only areas where women have a large role is at check-in and serving in-flight meals. At least that is the perception, and one which was pretty much accurate until well into the 1990s.
Whether it is in fact all that different from other sectors in its gender mix is another issue.
But this industry is a different place from where it was just 10 years ago. The big boys’ toys have given way to a customer facing, consumer-driven business where humanity skills are gaining ascendancy over engineering.
Amid massive attitudinal and structural change in a turbulent decade, the industry’s accelerated evolution has done much to open doors for women. The result should presumably be that women play a much greater role in the newer, usually low cost, airlines. Legacy airlines meanwhile are apparently little changed over recent decades. These generalisations are broadly correct.
But, when we reviewed the profiles of over 200 airlines around the world, the contrast in leadership diversity was not as marked as might be expected, at least at the highest management levels.
Our report spans four issues of Airline Leader, looking at the special features of the always challenging airline business, how it compares with others and what the future might look like for women who aspire to it for a career. We look at the global statistics, at the roles women typically play and we talk to some of the (very few) women leaders about their experiences and views of the future.
Often the findings are predictable. But the reasons for the changes and their likely direction are perhaps not so intuitive. For the reasons above, it is not greatly surprising that newer, more customer oriented airlines sport a higher complement of women, while older, larger, companies still labour beneath the overhang of the old engineering and flying days, bearing many of the silent prejudices and built-in rigidity of the past. Whether the old will change and the new ones retain their differences is not as obvious as perhaps it should be.
This could be because a mere decade is not enough to shift a mighty imbalance. Maybe also the decline of the aviation industry in Europe and North America makes it a less attractive place to be. There can be no doubt its meagre profits are no longer offset by attractive side benefits; it is a cutthroat, low growth place to be these days.
This is reflected in a subtle difference in comments made independently by two senior women figures. Mary Jordan, now Chair of Vancouver Airport Authority and formerly head of a regional subsidiary in American Airlines, later with high level operational experience in Canadian Airlines and Air Canada, questions whether the industry “has the same buzz today, as growth slows”. For a new employee entering
an airline “whose expectation is a lifetime career, it’s not for you…but if you want to learn the most in the shortest time, it’s challenging and a great place to be!”
Chong Phit Lian’s comments however reflect the very different Asian aviation environment. As CEO of Singapore-based, rapidly growing low cost airline Jetstar Asia, she talks of having moved in 2006 from another sector into “a high profile and dynamic industry”, which “is an attractive prospect for those who love the challenges of fast pace and innovation”. In Asia and other emerging markets, average annual growth rates are slow if they don’t have two digits. There you don’t just get the “buzz”, the career prospects are there too. And the ones that are usually growing are the low cost carriers (LCCs).
IT IS A FACT THAT women airline leaders feature more prominently in new, low cost airlines. Half of the world’s women airline CEOs/MDs head low cost carriers. Three LCC leaders are from Asia and three of
Europe’s six airline heads are at low cost operators. Among those, newly appointed Carolyn McCall heads one of the largest airlines in Europe, easyJet. (Ms) Chris Browne, a highly experienced industry careerist, leads the sizeable, also UK-based, Thomson Airways. The third European is Marina Bukalova, at Russia’s SkyExpress, an airline well represented by women at executive levels.
This representation in LCCs is very significantly distorted towards the new airlines. While providing half the leaders, this category constitutes only a fifth of the total number of airlines surveyed.
Europe is actually flattered overall by hosting six CEOs in total. Both Ms McCall and Christine Ourmières, of Air France regional subsidiary, CityJet, were recently appointed to their positions. Ingrid Schultheis leads Cirrus, a Lufthansa franchise regional operator.
Not one of North America’s low cost airline CEOs is a woman; indeed there is no woman airline CEO among substantial airlines in any of the US contiguous states, or Canada. Regional operator Island Air, led by Leslie Kaneshiro, is as its name suggests Hawaii-based.
To find a woman CEO in South America is to travel to Ecuador, where Aerogal, led by Gabriela Sommerfeld Rosero, features service to Galapagos Island, a route network now expanded to the US under its new Avianca/TACA ownership. (Although it is notable that the Chairman of Brazil’s TAM, in an otherwise solidly male board and executive line-up, is Maria Cláudia Oliveira Amaro.)
But the numbers are still small and, at the next level down, of direct reports to the CEO, there is – surprisingly - not a major difference in profile between the new and the old. There is no clear pattern in the proportion of leaders at executive management level. Exceptions do exist however and these are invariably where LCCs/new airlines are involved. So, recognising that the quest for reasons and the likely outlook is probably more a substantive than statistical exercise, a deeper look at the changes afoot may be instructive.
ANY “POLICY” THAT EXCLUDES MORE than 50% of the entire population from senior management
roles should at least require robust justification at management and board level.
This is most relevant as the airline industry profile changes in nature. As a recent article in The Atlantic succinctly observed, “A white-collar economy values raw intellectual horsepower, which men and women have in equal amounts. It also requires communication skills and social intelligence, areas in which women, according to many studies, have a slight edge.”
However, criticising leaders who don’t reflect this in their corporate philosophy implies the need for someone impartial to make that call – and to apply it. Where only 3% of the Fortune 500 leaders are women, meaning that most other companies or third party arbiters have a similar male dominance, tolerance for the imbalance is understandable.
A study by women’s group Catalyst in 2004 concluded that the Fortune 500 companies with most high level women showed a return on equity 35% higher than those with the least women in senior roles. It is stretching belief to take this to mean that female leaders make more money for their companies – otherwise surely shareholders would be clamouring for more - but it does suggest that a culture that supports corporate diversity should perform better. So why hasn’t it been more evident in the new airlines?
Simone Menne, CFO of British Midland International, believes there is a simple reason there are so few women at top levels: “There is a network of men. I believe people tend to promote people who are like themselves. So it becomes difficult for women. I also believe that women quite often do not indicate strongly enough that they want to make a career and wait for somebody to ask them. My experience
is that it is necessary to say loud and clear what you want to do.”
Nonetheless, women executive presence is steadily becoming an indicator of an airline’s business model. But it is still happening slowly. Whether added female representation in management has any effect on an airline’s bottom line is more controversial. Women certainly change the tone of debate in boardrooms and executive management meetings, but whether that translates to tangibly improved outcomes is uncertain. And determining cause and effect can be complex.
An airline that advances women may prosper (or not) because of the female presence – but more likely it is the broader culture which opens those doors for females that makes the company a more effective competitive entity. Being gender-blind, as well as open on other cultural levels, sounds like a compelling argument for greater efficiency. And where such a stark industry transformation is occurring, there should be advantages.
THE BUSINESS OF RUNNING AN airline is highly complex. It involves understanding and working around regulatory constraints, with the ability to cosy up to regulators; being skilled financiers able to navigate funding of billions of dollars worth of aircraft and manage complex cost and revenue mixtures of currencies; right through to providing catering, ground handling, maintenance, and to pilots and flight attendants and manoeuvring enormous IT hurdles, as well as selling tickets and freight….
All of these activities - and more - were essential parts of the legacy company’s DNA. And trades unions, not an area typically welcoming for women, featured heavily. Even today airline managements often have to deal with 15 or more unions, frequently with powerful international organisations behind them.
This also means that the company has lots of career “pipelines”, or silos. This makes for difficult communication, but it is also confining. If the pipeline you happen to be in goes all the way to the top, you have a chance. If not – usually the case for non-operational roles – the ceiling can be quite low.
However, as the airline model changes and the emphasis shifts towards consumerism, this old structure starts to break down.
The turning point in the US came when JetBlue started operating from a down market JFK, as economic times made the best customers more price sensitive following the tech bubble burst in 2000. The US low cost airline revolution began. All this time Southwest had been perfecting its model, making profits quarter by quarter, steadily eating into the dominance of the hub carriers.
Meanwhile, in Europe, the growing influence of the European Union had allowed the region to leapfrog the US in terms of new, low cost, entry. When the EU imposed the single aviation market, first easyJet and hen Ryanair exploited the newly liberated international skies above continental capitals, and previously near-unused regional airports, busting open the control of the incumbents.
On both sides of the Atlantic, others were quick to follow after conditions deteriorated in the wake of September 11, 2001.
Suddenly, the ecology was near-perfect for setting up a new airline. Most importantly, there were now few barriers to entry; aircraft prices had slumped post-Sept-11; pilots were plentiful, fuel prices were low, market access was easy and the travelling public got hooked on low fares.
The virus also spread to Asia Pacific and beyond. And these new airlines emphasised two things – low costs and a customer friendly face, usually attempting to follow “the Southwest model”. In fact what they followed mostly was the near-mystical mechanics of that design. It seems obvious today that simply putting more seats in an aircraft and making it work harder could give such massive cost savings, but it took hard times and reduced yields to force the change on everyone. The commoditisation of aviation had begun.
SOME UNDERSTOOD THE DIMENSIONS Of the Southwest model better than others. From a management point of view, the airlines’ self image was now about differentiating themselves from the conventional carriers by creating a fresh, friendly, fun product. New low fares were a given.
In the new world of the 21st century it was unthinkable that this image could be credibly portrayed by a homogenous, all male organisation – a syndrome which Simone Menne describes as “white male managers, aged 45”, still largely typical of the European and North American legacy airlines.
Ms Menne has spent most of her working life in the legacy airline environment. Liz Savage, also a lifetime airline employee, had different origins. As a stereotype, she was an unlikely aeronautical engineer. She began her working apprenticeship at the right hand of Ray Webster, the first CEO of easyJet, with its two aircraft, moving from there ten years on, when Mr Webster retired, to another low cost operation, Monarch, and most recently to Australia’s Virgin Blue, where she is Chief Commercial Officer.
Coming from the new airline perspective, her outlook is more optimistic: “We talk about being in the airline business but we’re not really, we’re in the service business, the customer service business. So if you look at the demographic of most of our employees in an airline, they tend to be young, female-skewed. So it’s actually appropriate and valuable that we have women, with females represented at decision-making levels of the business.” She should be at home at Virgin Blue, where, of eight direct reports to the CEO, four are now women – the highest proportion of senior managers of any airline.
These new, gender-blind airlines will have no need for positive discrimination. If two main ingredients are cultivated: ability and attitude, then diversity follows. Southwest co-founder, Chairman Emeritus and former CEO, Herb Kelleher, and its President Emeritus Colleen Barrett put it succinctly: “hire for attitude, train for skills”.
If a candidate’s demeanour is wrong, he – or she – will not be hired. After that, the criterion is capability. As Ms Barrett says, only partly tongue in cheek, “Herb ‘appreciates’ women; the only time Herb doesn’t see gender is when it comes to performance.”
But they’re not all that way. Southwest is one of the two long-term most financially successful low cost airlines in the world.
The other part of that equation is Ryanair. There is not much that is squishy about the airline. In fact its culture is diametrically opposed to most of what Mr Kelleher and Ms Barrett espoused. For a start there isn’t even one woman on the Ryanair board and at management level the only non-male who gets a look-in is in the stereotypical role of Director of Customer Services.
Unlike most other new airlines, Ryanair, through its voluble mouthpiece, CEO Michael O’Leary, differentiates itself by being especially consumer unfriendly. The other differentiator is a propensity to have both the lowest fares and the lowest costs among its peers.
The bottom line, if the Southwest example is relevant – and surely it must be: it’s not so much about having women in the company. It is about the attitude that wants to have women in the company. Or, more accurately, that wants everyone to be involved; women are one part of that.
A level of blindness is needed towards anything but the person’s attitude and capability – backed up by active, preferably informal, corporate practices. But of those, the right attitude is not optional; it is an essential ingredient.
For most large, established airlines, making a change of this size is a big ask, to say the least. To use a piece of Irish advice, “if you want to get there, you wouldn’t want to be starting from here”.
NEXT MONTH: We look at the typical airline roles played by women – and the companies who are leading the way.