James Hogan’s job is to turn loss making Gulf Air into a commercial success in just three years! Bahrain Confidential met up with the straight talking Australian with the Herculean task, to learn more about him and find out how he plans to succeed where others have failed.
Q. You said that Gulf Air is a great airline but a bad business. What makes it a great airline?
A. It is a great airline! Twenty years ago this was one of the premier airlines in the world, it had a great reputation for service delivery, in flight service and cabin crew. Other airlines used to look at Gulf Air in envy!
Q. What went wrong?
Vital statistics:
Date of Birth: 28.1 1.56 (Sagittarius)
Education: HSC, Marketing Studies at Chisholm Institute Australia
First Job: Ansett Airlines, Airport Operations
Favourite Book: The Art of War
Favourite Music: Modern
Favourite Film: Chariots of Fire
Favourite Food: Thai
Interests: Rugby and Cricket
Favourite Holiday: Queensland
Favourite Saying: Are you a Winner?
A. You’ll have to ask the people before me, but I guess we stopped investing in the brand to the right levels for a business of this size. We probably, to a degree, haven’t analyzed on a regular basis the customer segmentation, or spoken to our customers about what they want from an airline. We maybe have not been as innovative as we should have been in benchmarking ourselves against other airlines and continuing to delight and surprise our customers.
Q. Could you be more specific?
A. This business is not about airplanes – it’s about the customer’ It’s about making sure you have a network that suits the requirements of your customer. It’s about flights leaving at the right time. It’s about reliability. It’s about seating, leg room, in-flight entertainment.
It’s about attention to detail, service in the cabin. It’s about what cabin you are in. It’s about arriving on time and getting your bags. So it’s about how you spend time within the airline, because this is one of the few items that you purchase where we control you.
Q. What do you mean by ‘control’ ?
A. You pay the money but then you are in our control. As soon as you walk into the airport, through security, into the check in counter, we have access to your name. We could say good morning, or could say nothing. You go through into the lounge, then you go to your cabin, and then your locked in our environment and the seat belt light goes on. Can you expect an emotional journey because you don’t know if you are going to arrive on time? Is it a business trip or the start of your holiday? How does Gulf Air handle a problem, whether it’s a delay, or a lost bag, or a double booking. It’s totally different to booking a room at a hotel. If you book a room at the Gulf Hotel you go upstairs and close the door You can rent a car and drive it 100 mph if you like, but when it comes to air transportation it’s a unique experience because we all consider ourselves experts on travel!
Q. Can you give an example of how you feel the airline lost its way?
A. The biggest issue at this airline is they have lost the support of the business customers, which has a knock on effect, in regard to quality, perception and yield. If the perception is that your not world class then you may have to bring your prices down to attract your audience, which means you de-value the proposition and that’s a downward spiral. When I talk about a bad business there are elements of it. I think we lost focus on the customer, the other issue is that we are overly bureaucratic.
Q. Why is that?
A. Because I guess we haven’t empowered people enough. If people are trained and given responsibility, they are made accountable and that’s pretty powerful. It came over as being a little bit old fashioned and that again slows down our progress, slows down initiative, slows down the ‘can do’ attitudes For example, you ask “why do we do it this way?” and your answered with “well we’ve always done it that way” so you ask “Why is that?” and your answered with “because we’ve always
done it that way”….. It goes on and on.
Q. Do you come up against that a lot?
A. Not now (laughs).
Q. You have given yourself three years. Why three years?
A. Because all the ingredients are here. We’ve got a good group network and a good brand. We have to review the brand which we have started to do. We have to look at how we change the in-flight service delivery to make it much more contemporary to regain our customer base and we have to give our staff the supports This building here (Gulf Air HQ) supports the field, supports the customer. It shouldn’t be “this building here demands reports”, you know – the rules and regulations that tie the field. This is the support base. There’s a lot of good people here who have certainly responded well to the change in direction. We are telling them clearly that it’s a three year turnaround and in three years we have to make a lot of changes. Obviously there has to be an investment from owning states, the company has to be capitalized properly, have a strong balance sheet, and have the proper gearing to turn this business around.
Q. Was it hard trying to convince the owning countries that you could do this?
A. I haven’t done it yet. We are still working through the process. There is a meeting in mid September when we put our plan to an extraordinary general meeting. I think that what the countries have decided, not me, by appointing an expat into this role for the first time – as you know the job has always been a 5 year rotation amongst the States – is that the management practices and style will have to change. All the owning states want this airline to be successful. They don’t want it run as a public utility where it has to subsidized, so to be successful and profitable it must be run commercially, If you want to run it as a public utility then that’s fine, the shareholders can do as they want, but they must then be prepared to subsidize.
Q. How do you feel Gulf Air is nowadays perceived by the traveling public?
A. In Europe the brand is strong still, in this part of the world it has been damaged. We have to regain the confidence of the public by focusing on the staff first. If the staff feel good about their airline and good about their employer that should then be translated through to their service to you.
Q. Do you have even the tiniest fear that you won’t succeed?
A. I don’t! I am totally convinced we can turn this business, provided we are given the mandate to do so.
Q. What do you think are going to be your biggest problems?
A. Look, we say it’s a three year turnaround, I think one of the problems is that people think it’s going to be a one year, two year turnaround. We will put together a strategic plan to slowly rebuild this business over the next three years. We have to be competitive. We have to upgrade the product. This is business it’s not rocket science here. We just have to apply proper business process. I have just brought in a number of airline executives to support me including John Butler as vice president of Marketing and Sales, Luke Medley as vice president of Services. new marketing director, Shane O’Hara, who was head of marketing for Star Alliance, and we have a new graduate programme. So what you find on this are some great people and leadership, empowerment, and a vision. From my perspective as a businessman this business can be turned, the decision is with the shareholders. I have no doubt we are capable of bringing this airline to profitability.
Q. In three years?
A. In three years!
Q. Have you come across any hostility with the fact that you put Westerners in senior positions?
A. No, because the majority of those in senior positions are Bahraini’s or Gulf nationals. Don’t forget, all I have really been doing is bringing in people with the right skills. My job is to make Gulf Air a world-class airline.
Q. What motivated you to come to Bahrain?
A. The uniqueness of the challenge of being able Lo rebuild what was a great airline.
Q. What’s your career history?
A. I started off at Ansett Airlines when I worked for three years, from check-in to ticketing, to more aspects of airport operations. I finished studying (I studied marketing) and moved into the airline business working in a mixture of service and hospitality Airlines, car rental and hotels are all very similar about service, finding solutions, and controlling costs. It’s an industry that I zig zagged as a young man as it wasn’t that well planned, so I moved across into sales and then backward into marketing and then to the operations. I worked in Asia, and moved to Europe with Hertz writing business plans and business modeling, and then ended up as one of the vice presidents of Hertz, Europe, Middle East & Africa.
Q. Why did you go back into the airlines’?
A. I always loved the airlines business. It’s probably one of the most challenging roles there is – the people, the dynamics, it’s very fast moving, interesting and challenging.
Q. Did you have a strong business influence in your younger years?
A. Sport has always played a very big part in my life. I love winning. I love the heavy competition.
Q. What’s been your greatest victory?
A. I guess my greatest victory is being involved with companies of the caliber of Hertz, Forte, and Granada. They are highly successful companies, highly competitive, and always achieving new goals. If you achieve, at a senior level, the turnaround of a business so it achieves it’s goals, that has a huge impact on the employees and your customer But when you work in a business that is profitable, entrepreneurial, has success, that is huge for your confidence, and working in these environments has been fantastic.
Q. Are you able to switch off at the end of the day?
A. Not as much as I would like. (laughs)
Q. What’s been your greatest lesson in life?
A. The greatest lesson I’ve learnt is to believe in people. You have to empower them and to trust them, because at this level if you try and do everything yourself your going to fail. I’ve learnt you have to build dreams, have a vision, and work to achieve that vision. I’ve also learned that you don’t second guess, because if I second guessed, I’d have more gray hairs. Business is about leadership, it’s about coaching. It’s like in sport when you must anticipate and understand the weaknesses of your competition. It’s looking for competitive edges. In my mind I know what this airline in three years can look like. That’s what I’m working towards.
Q. You keep going back to sport so I’ve got to ask you, what sports do you play?
A. Now? I’m too old, (laughs) I’m a crock now (laughs), but I used to play Australian Rules football – that’s how I hurt my back and became a crock.
Q. How do you relax?
A. On the weekends? I take my kids round to their sporting events, I’m their taxi driver.
Q. Do you really push them?
A. No, because my father didn’t really push me, he encouraged me to participate. You can’t push
kids at sport. It’s like in business, you’ve got to encourage people. You see parents shouting on the sidelines – it’s just terrible. You give them opportunity, encouragement, and you steer!
