Monday 26 June 2017

Flybe's new boss aiming for take-off with European airline

She's one of the world's few female airline CEOs, and the former Air France and CityJet executive tells John Mulligan that she'll help Flybe soar in the aviation sector

‘People asked me if I was really sure I wanted to do this again,’ says Ourmieres-Widener
‘People asked me if I was really sure I wanted to do this again,’ says Ourmieres-Widener
John Mulligan

John Mulligan

There aren't many female chief executives in the global airline industry - barely more than a handful. So Christine Ourmieres-Widener (52) rejoined an exclusive group when she took up the chief executive mantle at UK regional carrier Flybe back in January.

The former Air France executive was CEO of Dublin-based CityJet between 2010 and 2015. The airline was sold by Air France to Germany's Intro Aviation in 2014.

That saw Ourmieres-Widener take a 7.5pc stake in CityJet, but the liaison was to be short-lived. She parachuted from CityJet (since sold back to its founder, Pat Byrne, and other backers) in early 2015, becoming chief global sales officer at American Express Global Business Travel.

Now she finds herself back in the aviation business, at Devon-based Flybe. Was she itching to get back in?

"I wasn't exactly dreaming about it, but when the opportunity came up I didn't have second thoughts," the Avignon native admits in her Gallic drawl.

Sunlight glints through the windows at the Powerscourt Hotel in Co Wicklow, where she's joining a panel talk later at the CAPA airline leader summit - an annual think-in of aviation executives.

For years under Air France, CityJet racking up eye-watering losses, but the parent kept funding it. The sale to Intro - debt free - seemed to herald an opportunity to whip CityJet into shape.

But Intro struggled with CityJet. Pat Byrne, who's now executive chairman at the carrier having reacquired it in 2016, has previously said that the German self-styled turnaround experts were "out of options" when they offloaded CityJet.

Ourmieres-Widener, who has an Master's in Aeronautics and an MBA from the Essec Business School in France, is reluctant to perform an autopsy on Intro's involvement in CityJet, but insists that the Germans did make a good stab at revitalising it.

"Remember, it was in years when the industry was challenged," she says. "And you don't move from being a subsidiary of a big legacy airline without rebuilding all the interfaces. I think that Intro did a lot. CityJet had completely changed our PSS (Passenger Service System). And the impact on a migration like that on any airline, even big, is quite significant.

"Intro has helped enormously in enabling CityJet to become independent. What happened after, it's a different story. It's a different company now."

But if CityJet was a challenge, so too is Flybe.

"People asked me if I was really sure I wanted to do this again," she laughs, adding that the challenge is a big part of the attraction. "I know the market, and the airline is different than others in terms of its size, its fleet, and a core market that is very different (much of its business is generated on the domestic UK market)."

The regional carrier (which floated on the stock exchange in 2010 and it bills itself as Europe's biggest such airline), has been struggling over the past few years. More recently, it's been combating intense competition and fare wars as low oil prices fuel seat capacity expansion around Europe.

And it could have been a very different airline to what it is now.

In 2013, in an effort to persuade the European Commission to approve its planned takeover of Aer Lingus, Ryanair struck a deal with Flybe that must have seemed like a fairytale (and in the end, it was).

Under the battle plan, if Ryanair got control of Aer Lingus, it would hand about half its rival's short-haul routes over to Flybe along with €100m in cash, €50m from forward ticket sales and guarantee Flybe a €20m profit in the first year.

It never happened of course, and Aer Lingus is now owned by IAG. If Flybe had secured control of the Aer Lingus routes, it would also have used Embraer jets Flybe had ordered following its flotation to fly some of the Aer Lingus services.

The €1bn order for 35 Embrarer jets later came back to haunt Flybe. In a complex 2014 deal then Flybe CEO Saad Hammad engineered an agreement to cancel orders for 20 of the jets.

Flybe has had a tough time financially since its 2010 flotation. Shares trade at just 39p compared to the £2.95 debut price, and it had to raise an extra £150m in 2014. It has posted a full-year, pre-tax profit only twice since the IPO.

Hammad unexpectedly quit last autumn, clearing the way for Ourmieres-Widener to enter the cockpit.

"There is a great opportunity to improve the performance of the airline," she says. Part of the reason for that, she adds, is because its fleet issues have been resolved. Flybe's fleet size will peak at 85 shortly before declining soon after.

"Flybe has never been in this position before. We control our fleet. Being able to fly a network with only routes that are profitable has never happened for us in the past few years," the CEO explains. "We can look at what routes are profitable, what routes are in difficulty."

Indeed, she agrees not having the right kind of fleet was arguably the biggest problem for Flybe. "For any airline, not having the right size of fleet, or the right type of aircraft - it's one of the biggest challenges," she says. Flybe might decide this year on its future fleet requirements, she adds.

But she says that investing in its digital platform is also a key element of its continuing transformation.

"It will be a very important direction for us," she explains, adding that about 80pc of its bookings are currently made via its website and that its pilots will be using electronic flight books from this summer.

The airline recently hired a new chief information officer, Peter Hauptvogel, who has previously worked at Air Berlin and Thomas Cook, to develop its digital presence.

"We definitely think there is an opportunity in having a better online platform. We are flying so many commuters in the UK but we need to know more about them. We have a three-year road map (for digital evolution)."

Despite the initiatives, can Flybe hack out a viable future? You wouldn't expect her to say anything different, but Ourmieres-Widener is positive it can.

"It's a great company. We'll have a year of stabilisation and consolidation," she says. "The improvement potential is already in our team and in the network we're flying. Our core business has quite a significant percentage of loyal customers and they expect operational excellence. We are making sure that our strategy is about our customers' priorities, making sure we're flying, and flying on time.

"We want to attract new customers, a new generation, with tools we maybe don't have today," she explains. "When you see the challenge of improving the performance, for me, there's massive room for improvement and sustainable profitability. After that, it's for us to deliver for our core business, but also to work better with partners."

Ancillary revenue potential is also "massive", according to the CEO.

"We could do more," she adds. "It's one of the reasons why we think the digital platform will help us going forward, in changing ancillaries into a proper and significant business. We're working on it.

"Ancillary revenue should be supported by a booking flow that is very efficient and the most successful airlines have that in place. We're implementing an improvement in the booking process, but still we can do much better on ancillary revenue."

In March, Flybe launched flights - using turboprop aircraft - from London Heathrow to Edinburgh and Aberdeen. Ourmieres-Widener says the move put Flybe on the radar of additional potential codeshare partners.

"It's working very well," she says. "We're very happy with it."

Meanwhile, she has moved from the bustle of New York to the more sedate shores of Exmouth in Devon, not far from Flybe's HQ in Exeter.

"It's a lovely place to be," she says.

It will be even nicer when Flybe is making money again.

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