Opinion

Stefan Pichler Turns Red To Black

Stefan Pichler, the much respected CEO of Fiji Airways, has resigned after a short fourteen months in office to go and do what he does best with Air Berlin. Mr
06 Nov 2014 10:58
Stefan Pichler Turns Red To Black
Fiji Airports Staff members with their families during the Pinktober event at the Fiji Airports Headquarters in Nadi. Photo: Mereleki Nai

Stefan Pichler, the much respected CEO of Fiji Airways, has resigned after a short fourteen months in office to go and do what he does best with Air Berlin.

Mr Pichler has a long history of taking airlines (and other related businesses) that are deeply in the red and rebuilding them, in the process returning them to strong and sustainable profit. For someone to do such a thing once is clever, but to keep doing it is nothing short of amazing.

Mr Pichler is known in the tourism industry as an “Airlines man”.

These people have a mix of perserverance, intuition, financial expertise, people skills and bravery and are capable of cutting through all the complex data to see the basic issues. There are not many of them in the world; the task seems to burn them out pretty quickly.

But Mr Pichler has a longevity that belies his humble demeanour, his quiet approach and joy of life.

Maybe his status as an elite marathon runner has created the temperament that makes him successful.

Running 42.5 kilometres in a little over a couple of hours teaches you a lot about yourself, about strategy and about never giving up.

When he arrived in Fiji, Air Pacific was at the start of a full rebranding exercise, had several years of financial struggles, was undergoing a change in aircraft type (always a difficult time in the airline industry), a number of staff morale issues, a couple of short term CEOs, an internal airline which was losing money and about to change airline types and a country that was just recovering from vast cyclone damage, which had extreme effects on the tourism industry.

Not a situation to fill the normal executive with enthusiasm.

And yet, in just a short 14 months he did everything that was needed and in the process turned the slightly tired airline into a world class, full service, boutique airline, with some of the best airline livery in the world, lifted the standard and morale of the staff, rejuvenated the internal airline with new aircraft types and started building a regional network. He also gave it a new name, Fiji Link.

He was asked to take over the chairmanship of Tourism Fiji, a critical link in the Fiji Tourism industry that had not been performing and was drawing a lot of criticism from the tourism industry and he started to make an impact.

Mr Pichler seemed not to believe the wisdom of the industry and questioned all aspects.

On being told that the in-flight magazine should be removed because it was costing money to fly them around the world, he asked for the cost and then surprised them by asking for the income from the magazine.

He put the magazine back on the planes and upgraded the product.

Similarly with food. He looked at the total cost of serving the pre-packed roll meals being served, but also asked for the total cost of a full quality meal. Because al lot of the containers, utensils and beverage containers were single use it was found that the difference was marginal but the passenger satisfaction was worlds apart. So they introduced the quality meals. And delighted the passengers.

He understood the benefits of a happy staff and particularly, a happy flight crew and set out to change the old culture, involving people in decisions, showing them that they were respected and rewarding them when success came along.

Now all staff share in the profits of the airline by way of bonuses based on profit. And he ensured that staff families were also part of the airline and were proud of it.

His new posting is a wonderful opportunity that he will love.

Air Berlin is a major international airline. It started as an American charter airline in 1978 and in 1990 changed to a low cost scheduled operator.

So successful was the formula that by 2006 it was Germany’s second largest airline and it has continued to grow through takeovers, expansions and alliances.

Today it has a net annual income of over four billion euro, 8900 employees, around 125 aircraft flying over 31 million passengers annually a load factor of 85 per cent. It operates to 150 scheduled destinations worldwide. But it is struggling financially. It urgently needs a Stefan Pichler.

The fleet is a mix of Airbus, Boeing, Bombardier and Dash 8 aircraft types with an average age of five years, remarkably young by international airline standards.

Mr Pichler has separate Masters Degrees in Law and Economics from Augsburg University and started his working life as head of sport promotions at Nike, where he probably picked up his love of marathons.

In 1995 he became MD of Lufthansa Germany, moved to Lufthansa France then followed with senior executive roles in various areas, again with Lufthansa.

In 2000 he joined Thomas Cook, an integrated tourism and leisure business as chairman and in 2004 was CCO of Virgin Blue which he took from a low cost carrier to a network carrier, on the way making it one of the most profitable global airlines. He also became chairman of Virgin Australia in 2008.

His position before coming to Fiji was chief executive of Jazeera Airways, the Kuwait flag carrier, which he turned around from serious losses to have the second highest operating profit of all global airlines at 25 per cent in 2011 and aimed higher to 30 per cent in 2012.

It is rumoured that he received a phone call from the German chancellor asking him to return and help Air Berlin which, in spite of all its strong statistics, had made a loss in seven of the last nine years.(Euro315 million in 2013 alone for a total of close to a billion euro) a situation that couldn’t be allowed to continue.

Mr Pichler goes home to face probably the most difficult challenge of his corporate life.

From the various interviews he has given in the last few days it is clear that he loves Fiji, but equally clear he considers that he can’t ignore a call to come to the aid of his country of birth. Our national carrier and tourism industry will miss him.

–          John Ross is a Nadi-based marketing and advertising specialist with a long involvement in the airline and tourism sector. He has run agencies in Fiji and the region and led airline marketing campaigns in Australia, most recently for Air Mauritius.

 




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