Airlines are forced to be innovative and executives who can help implement the changes and drive future growth are in demand. Airlines such as Virgin Blue and EasyJet deliberately do not target executives with long-time airline experience, preferring instead to recruit from nimbler, more customer-focused companies such as L’Oreal, Nike, Proctor & Gamble and Diageo. 

Simon Hickey, Qantas Airways group general manager of strategy, says that the “the old hats who know the airline industry backwards” are needed in any successful airline.

“But there is such a massive degree of change going on in aviation, which is a very complicated business, so you also need people to challenge all the old paradigms basically in order to drive significant change,” he says.

Hickey held senior executive positions with Lend Lease in New York and Arthur Andersen in Australia and the UK before being placed into Qantas by Heidrick & Struggles.

Airlines other than Qantas have also been looking outside. For example, Ralph Norris, former CEO of Air New Zealand, was from the banking industry. From his perspective, airline leaders need to have “an ability to think outside the square and challenge conventional wisdom, and a strategic mindset.”

Before he took over at the helm of Air New Zealand in 2002, the airline was more focused on flying aircraft rather than flying people. Norris turned that thinking on its head and helped steer the airline to profitability by his third year.

This is not to say that everyone already in the aviation industry is useless in this current market environment.

“It seemed to me that many of the staff was attracted to aviation by the glamour of the industry, with many lacking a commercial edge,” says Norris, who has since left the airline to become CEO of Commonwealth Bank.

“Nevertheless, there were also many who saw the need to change by augmenting themselves with management and leadership talent from outside the industry. We were able to differentiate ourselves with more innovative strategies by changing our executive recruiting approach.”

Norris’ comments reflect the “new view” of an industry that has much in common with the fast-moving consumer goods (FMCG) sector which manages complex supply chains of goods that span the globe while maintaining zero inventories. Given that airline seats are among the most perishable type of consumer goods – that is, once the aircraft takes off you can no longer sell it – an FMCG-style approach in airline management can make a significant difference.

‘Low-cost is like FMCG’

Another typical “outsider” is Rosalynn Tay, chief commercial and marketing officer at Tiger Airways in Singapore. She came into aviation from the FMCG sector.

“If you look at the low-cost carrier business model, it’s very much like a FMCG or retail,” Tay says. “We’re talking about fast turnaround. There’s been a lot of differentiation but we’re not selling a premium product – we’re selling fast, efficient, reliable service and a consistent product.” She says that recruiting executives from within the airline industry would be getting “more of the same.”  

Tiger Airways encourages executives with diverse backgrounds, but also maintains a depth of aviation experience in the operational and technical divisions of the company. “If you think about it, ultimately most of our business is transacted online, so we are really an online retail that so happens to be in the airline business. There is a need to introduce new elements into the sector so that there is fresh thinking.”

Tiger’s chief financial officer, Evelyn Tan, came from the electronics manufacturing industry and was part of the team which took the company to its initial public offering (IPO).

Other similarities between airline and FMCG sector include:

• Large customer base
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• Focus on optimizing the supply chain in order to reduce costs
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• Reliance on sophisticated, large-scale, interconnected global computer networks
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• Management of customer loyalty through call centers and the Internet
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• The networked nature of the businesses
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• Use of sophisticated financial derivatives for hedging pricing risk.

At Heidrick & Struggles, we believe that the airline industry will be changing even more rapidly and with it the demand for innovative executives who are able to bring fresh thinking to help fly the business to greater heights.

Executives with the ability to leap across the traditional boundaries separating the aviation industry and other industries will be able to create new niches and business models.