In 2019, in the biggest private equity purchase in global aviation history, Canadian investment company ONEX paid C$5 billion for Canada’s second largest airline Westjet.
Within three months, Covid had hit and the airline had grounded much of its fleet, followed by huge staff layoffs and a massive cost cutting. Kiwi Ed Sims, who ran the international business at Air New Zealand and was most recently CEO of Airways New Zealand, has been at the helm of Westjet for the past four years. Here he shares some of the challenges of the past year.
What has the past Covid year brought for you and your company?
Covid has been the longest period of crisis management I can ever remember. As in any crisis, a few fundamentals remain true.
1. Delegate responsibility to the business – it’s all bar impossible to run a complex organisation of 14,000 people and 181 planes AND run a crisis. We initially ran daily stand up ‘sitrep’ meetings with 40 plus representatives of the whole business reporting on key issues.
Over time, daily became weekly yet we’ve still had more than 160 of those meetings to manage the crisis.
2. In the words of the WHO “speed trumps perfection”. We had to move at pace to ground aircraft ahead of border closures, to radically reduce operating costs, introduce health measures, ensuring we were roughly right and avoiding being precisely wrong.
3. Stay calm – everyone watches the leader. If I had acted overwhelmed, panicky or uncertain, others would have followed suit.
How hard has the pandemic hit Canada in general? It sounds as though the response is more provincially run, than by central government?
Canada is a complex confederation of 10 provinces and three territories and like another vast geography, Australia, it can be complex to determine governance and regulatory authority.
It can often feel that setting policy happens at a federal level while implementation happens locally.
That works okay when things are going well, but creates real accountability gaps in a crisis.
By contrast to New Zealand, Canada has had almost one million positive cases and more than 20,000 fatalities.
With the longest land border in the world shared with the US, it’s a challenging environment to “lock down”. The stop-start aspect of lock downs and openings makes running a logistical and service business immensely challenging.
How difficult has it been? You have had to stand down or lay off more than 10,000 staff? What approach did you take?
I was with a United Kingdom airline that failed after the first Gulf war in 1991. I was with an Australian airline that collapsed post 9/11. I’ve worked through the GFC, Ebola, SARS, MERS, Swine Flu, Icelandic volcano groundings, Avian Flu and the unprecedented grounding of the Boeing Max 737 for the past 22 months – aggregate all those experiences and this has still been more challenging.
But whether it’s a bereaved family, a front-line health worker, children separated by border closures… there is always someone doing it tougher.
The CEO role can be lonely; you are responsible for the change process but it’s infinitely harder on the receiving end of that change.
We have let 4,500 staff go permanently, mostly to ensure survival. We have stood another 5,500 down for now, simply because carrying only 10 percent of our previous year’s demand means we don’t have enough work for them to do.
As we start to see volumes return to higher levels like Europe at 35 percent or the USA at 45 percent, we will bring those people back to meaningful work. I cannot wait for that day.
How have you dealt with the toll that must take on you personally and on your executive team?
I hold my personal values – accountability, resilience, humility, aspiration, authenticity – very dearly and always cross check every decision I make with them.
It’s acting outside of your values that creates tension and I always aim to be able to sleep at night even after the toughest decisions.
But you do need conscious coping mechanisms and for me, exercising for an hour every day, never having devices in the bedroom, ensuring we find time to talk openly as a family and as a couple – are critically important.
I aim to spread stressful workloads evenly amongst my executive team and rigorously ensure they take adequate leave and rest.
We have provided strong professional psychological support for all leaders, recognising that to some extent we have all suffered PTSD during this crisis.
What will the airline do, once travel is back on the agenda, to rebuild itself? Have you started down any tracks as yet?
We see a recovery starting with Canadians visiting friends and relatives, taking lower cost vacations domestically, before the return of long haul and corporate travel.
We are gearing up capacity accordingly, ensuring that licensed staff like pilots and engineers stay current, and undertaking critical safety training for all other front-line roles.
We’ve also been refurbishing and reconfiguring all our parked aircraft with new seats and facilities, and of course ensuring our head office is ahead of all new safety protocols in areas like distancing, testing facilities and signage.
It will be a stepped approach, recognising that reassurance that our aircraft cabins are safer than supermarkets needs to be provided for the thousands of guests who’ve not travelled in over a year and may be shocked to see Westjetters in masks, eye protection and even gowns.
Every business leader has learnt big lessons this year, but what are your main takeaways from the tumultuous year the world has had?
You cannot over-communicate. Normally I spend 20 percent of my time, or a day a week, in team discussions.
In this crisis, that leapt to 50 percent. Technology has been a gift with so many staff furloughed or working from home. I’ve fronted more than 30 all-company webinars with more than 4,000 Westjetters online using Microsoft Teams, fielding hundreds of questions. It’s been the critical element in keeping our vibrant culture alive.
The other key lesson is to be consistent. Even if a crisis can generate moments of despair rather than elation, negative emotions have no place in a highly regulated environment like aviation.
Has there been much co-operation across the global aviation industry?
Aviation is a complex eco system and airlines, airports, air traffic control and hospitality all depend on each other for custom.
Sharing statistics, reminding politicians of our contribution to GDP, employment and social welfare is definitely a team sport and many of us have taken turns to be ‘guest speaker’ on each other’s webinar.
That said, airlines executives are a fiercely competitive bunch and we all know our boundaries when it comes to confidentiality!
Have there been any bright spots through the pandemic gloom?
I’ve enjoyed regular webinar bloopers where someone forgot to keep the dog/kids/Amazon delivery person out of shot.
We’ve also had our share of dress protocol breeches with at least one executive in pyjama trousers for far too long.
Buzzword bingo and the challenge of getting incongruous words or phrases into formal presentations keeps the inner child in me endlessly amused …
Any other thoughts you’d like to add for NZ’s leaders?
You are not alone. New Zealand’s team of five million has suffered in lockdown, but many other societies are filled with admiration, and more than a little envy, at how quickly you responded, how well you have coped, how staunchly you stood up.
Over the past year, I’ve reflected that one of the most valuable lessons of working in management in New Zealand is the importance of range.
Kiwi corporate life values leadership breadth, as well as technical depth. It’s an approach of pragmatism, openness and collegiality that defines what it is to be Kiwi.
