Friday 22 November 2019

Barger: 'Lose the culture and you'll lose the company'

Dave Barger
Dave Barger
John Mulligan

John Mulligan

Don't get Dave Barger started. Unions, politicians, governments – none is safe from his unbendingly polite criticism. In fact, the chief executive of US airline JetBlue doesn't seem to ever lose the rag. At least not during interviews.

In Dublin to speak at an annual aviation industry get-together, he has recently been on a fly-fishing trip to New Zealand. Maybe it just helped him unwind.

"Work hard, play hard," he says, chatting in a city centre hotel, where the sandwiches and pastries, delivered as part of the afternoon tea spread, remain untouched by him but are relished by another JetBlue executive and one of the airline's PR guys.

So, did he catch anything, or did all the big ones get away? "We all did really well with rainbows and browns (trout). Several of both, but the fishing was really good," he says. "That's what airlines allow you to do. You're in New York, but then you're fishing in the north island in New Zealand, then you're back."

A Detroit native (the traditional home of the US car industry), Barger is one of the founding team members of JetBlue, that started as a low-cost upstart in New York and flew its first service in 2000, plying a route between JFK and Fort Lauderdale in Florida. Its model has morphed since then, turning it into an airline more akin to Aer Lingus. Last year, it delivered record profits, posting operating income of $428m (€309m) on revenue of $5.44bn (€3.9bn).

The airline's co-founder was David Neeleman, a serial aviation entrepreneur who was also involved in Canada's highly successful WestJet, and is currently building a new airline in Brazil.

Barger, whose father was a pilot with United and whose mother was a flight attendant, took control of the JetBlue cockpit in 2007. Neeleman was sidelined that year after the airline suffered a meltdown. It grounded about 1,000 flights over a five-day period following an ice storm, infuriating passengers and handling the whole thing badly. It was a cold wake-up call for the carrier.

Barger took his foot off the thrusters, saying the airline was growing too fast and expanding itself into bankruptcy.

Today, it's the fifth-largest US airline with a 200 aircraft carrying 30 million-plus passengers a year. It's focused on the Florida, Caribbean and Latin America markets, while dedicating about 25pc of capacity to east-west US services.

German airline Lufthansa owns a 16pc stake, having bought into JetBlue in 2007. Aer Lingus is among JetBlue's codeshare partners and uses the US airline's terminal at JFK. Hundreds of people every day connect from Aer Lingus flights to JetBlue's network, according to Barger. Another Irish connection: JetBlue signed a multimillion euro deal earlier this year to use software developed by Dublin firm Datalex to enhance the airline's retail solutions.

And ironically, for an airline that has avoided bankruptcy, JetBlue competes against rivals that have been through that ringer in recent years, enabling them to slash their cost base and emerge from the financial gym in the kind of shape that can threaten carriers that kept their heads above water.

"It's very hard to compete against airlines that declare bankruptcy and then merge," he says, hinting at American Airlines and US Airways. The former exited bankruptcy last year and then completed its $17bn (€12bn) merger with US Airways. Does that annoy him?

"Well, it's legal," he says, but you know it really does irk him. "All that said, consolidation has created a much healthier industry in the United States."

Other things bother him too. Like politicians. All over the world, the aviation industry is a handy political football and there's often a tense relationship between the two sides. JetBlue has been the recent target of political angst in relation to pay rates, particularly for staff at Newark Airport in New Jersey.

US vice president Joe Biden (who was last week honoured by the American Ireland Fund in New York with a 'Peace Award' for his contributions to Ireland), recently likened New York's La Guardia Airport to a third-world operation.

"Well, with all due respect Mr Biden, thank you for all your support for aviation," says Barger, with his tongue firmly in cheek. "We're using an air traffic control system that dates back to World War II radar. So, thank you, appreciate that." He shakes his head. "It's a joke."

Barger says he'd like to see the words "aviation, aerospace, or airlines" used just once in speech by President Obama (of course, he has, but surely it's the lack of regularity that annoys Barger).

"It's not just the Obama administration – it's Bush, it's Clinton. You don't hear anything. In the US, 20pc of every air ticket is tax. Why are we taxed more than alcohol and tobacco? Then you get into regulatory burden, not oversight like safety or Homeland Security, but we have to go through an awful lot of environmental rigmarole."

Another bugbear is foreign ownership limits on both sides of the Atlantic, something he sees as completely anathema in a modern business environment.

"The auto industry, the steel industry – these mature industries in the United States – they're healthy now because of foreign ownership, because of not being protected," he says. "Why are we sitting here with a statute that's 70 years old now?" JetBlue is a non-union company, just like Ryanair is, and Barger says that if it was a union firm, its model simply wouldn't work. It wouldn't have the freedom, he argues, to expand as it wished and to do things that separate it from older carriers.

He admires Scandinavian airline Norwegian, which has created an enormous hullabaloo by basing its long-haul arm in Dublin to give it rights to fly from the EU to the United States. US aviation unions have been waging an all-out battle in an effort to prevent the airline from being able to service US routes while being based in Ireland. They have claimed it's basing itself outside Norway so it can hire cheaper pilots and crew from Asia, something the airline denies.

In a recent opinion piece in a Florida newspaper, the head of Norwegian's long-haul arm, Bjorn Kjos, said the airline is "taking on the big guys to offer everyone affordable flights across the Atlantic".

"I applaud what they're attempting to do," says Barger, who concedes that even JetBlue may one day be competing with Norwegian's international arm. "I look at this rhetoric we're seeing in the United States with regard to what Norwegian is attempting to do and wait a minute, why is it the next idea is bad? Are we that threatened by a couple of (Boeing) 787s starting a service from Gatwick to Fort Lauderdale or to Kennedy?"

Meanwhile, a second attempt is being made to unionise JetBlue's own 2,500 pilots, something Barger is "very concerned" about. The airline recently agreed to raise pilot pay by 20pc over the next three years.

"We're pro-labour. We've created 15,000 direct jobs and a ton of indirect ones and we haven't laid anybody off, or had pay cuts," he says. "My concern is that the whole airline could domino ... where there are multiple unions at the airline."

"We're far from perfect," he admits. "The most important asset we have is the culture of the company. It's not an anti-union issue."

He insists that while the old adage is that it's not the front line that unionises a company, but management, workers can often perceive the grass to be greener on the other side.

He admits that pilots obviously have grievances, but he insists they may not find their lot any better by joining a union, and points out that the airline is expanding, adding opportunities for staff. "There's nothing more important to me than the culture of the company. If we lose that culture, we could eventually, at some point, lose the company. That's how important it is to me."

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