Saad Hammad chief executive, Flybe
Flybe introduced services to six regional airports from London City this week. Chief executive SAAD HAMMAD spoke to IAN TAYLOR
Q How serious was the situation at Flybe when you took over 14 months ago? A The airline was in deep trouble. Our cash position was precarious. Our costs were too high, even with the cost-reduction measures already under way. Our commercial capability was weak and too many routes were unprofitable. Our network and organisation were complex and inefficient, we had surplus aircraft with types that were ill-matched to our network, and confidence was waning among stakeholders. Drastic action was needed.
Q What measures did you take? A I’d done a significant amount of due diligence before joining. Within the first month I launched the five Cs programme to move the business away from danger. The first, cash, was about maximising financial headroom. The £20 million sale of slots at Gatwick [put together by the previous management] was one of the first things I signed. That gave the business sufficient runway for the transformation I had in mind. The second, cost, was about immediate cost-reduction measures on top of those already under way. We took out £47 million of costs last year and sadly had to part with 1,100 employees, one-third of our staff. The third was configuration:
restructuring 40% of routes – exiting 30 and changing gauge and/or frequency on another 25 – reducing the number of bases from 13 to six and grounding 14
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travelweekly.co.uk — 30 October 2014 SAAD HAMMAD
aircraft – equal to 20% of our UK fleet. In addition, I disbanded the company’s divisional structure, streamlined the senior management and moved to a simplified organisation. The fourth, commercialisation,
was about strengthening our commercial capability by filling key management positions. Revenue, pricing and route management improvements were implemented and a number of marketing initiatives rolled out. Supplier negotiations delivered significant benefits. A route- profitability assessment and selection methodology was adopted. More than 100 new routes were assessed and 11 launched this summer, all of which traded ahead of expectations. Confidence rebuilding was the final C. We engaged customers and listened to their needs; we engaged with unions, partners and, ultimately, got investors behind our transformation programme.
Q Has confidence been restored? A The airline has returned to profitability. We’re carrying record numbers of passengers and delivering record load factors. This indicates confidence has returned. We have much still to do, but we’ve come a long way. I’m encouraged that we can play a unique role in connecting regional communities and regional economies. The alternative to a 90-minute flight with Flybe is usually a car, ferry or rail journey that is at least three hours. Flybe’s smaller aircraft enable
BIG INTERVIEW
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