Aviation Leadership: Strategic Lessons from a Warzone

There are two pieces of advice he shares that really resonated for me in relation to the stunned response of the airline industry to the COVID-19 crisis:

1. Lesson 1: Why ‘Survival’ isn’t a healthy strategy…
   Having operated his business within a few miles of IS positions and been under mortar fire on a number of occasions, Roumani has an interesting perspective on ‘survival’:  ‘Survival’ is a word featuring in much of the airport and airline industries’ commentary in responding to the COVID-19 impact, which is understandably focused on the unprecedented damage.
   
   In his Times’ interview, Roumani actually discusses the example of airlines sending their staff doom-laden memos on the battle for ‘the survival’ of their business. Combined with lay-off letters, how inspiring is that to airline management teams that need to deal with today’s scenario but also need to be looking ahead?
   
   Of course, we need to be realistic about this huge threat but we also need to have hope – and planning – that goes beyond today and goes further than simply aiming for ‘survival’ for the business.
   
   Thankfully, not all airlines are in that despondent mode. Even in this darkest hour, Delta and Virgin, for example, have been sharing messages of jointly and voluntarily helping reduce cash burn, the taking of unpaid leave and senior management salary cuts to try find a way through this.
   
   Whatever crisis we face, we need to face it with the knowledge that we’ve done our absolute best to create a business model that not only optimizes performance in normal times but also provides as much strength as possible when the next crisis hits. How many airlines have done that?
    
2. Lesson 2: ‘Don’t overplan’...
   Operating in a fast-changing warzone, Roumani found the bank’s management obsessed with planning for dozens of possible scenarios that could affect their operations, including speculating on timeframes, shifts in the conflict, etc. Despite all their brainstorming, they missed the incredibly rare scenario that came next – not a U.S. invasion, not peace talks… a snowstorm, an incredibly rare event in Syria! The lesson? Focus more on the questions and strategies and on the things that you can control and influence.
   
   Of course, some might say that COVID-19 was the airline industry’s equivalent of Roumani’s snowstorm – no one saw it coming. After all, if even the WHO wasn’t fully prepared for a global pandemic, then we can’t be too surprised that airlines didn’t plan for it either! The scale and suddenness of this crisis are unique but we must still see that the crises of the past – including SARS – are lessons that need to be heeded. 
   
   Also, not all airlines are facing the same level of exposure. Some LCCs, for example, operate on business models that probably won’t survive a month of no revenue or two months of half-normal revenue, let alone the more prolonged shutdown that now looks inevitable. They are operating an inherently naïve and unstable model, with over-leveraged companies basing their business on ever-growing demand and endless bull markets. 
   
   As such, you don’t actually need to guess the exact nature of a future crisis, but you do need to focus on the things you can control that will help to build crisis resistance into your business model, particularly your ancillary revenue drivers. 

For many airlines, Roumani’s lessons need to be learnt from the COVID-19 crisis – just as they perhaps should have been learnt from earlier crises – particularly as the fault lines in the traditional ancillary revenue model become ever-more apparent whenever new pressure is inflicted. Right now, that outdated model is parked up alongside the grounded planes – going nowhere, delivering no revenue.

It doesn’t have to be that way. Even passengers grounded and isolated can continue to provide a revenue stream. Forward-thinking airlines such as Singapore Airlines and Lufthansa have adopted Omnichannel approaches that are continuing to drive ancillary revenues right now, creating revenue and maintaining the customer relationship.