Three of the longest serving airline chiefs shocked the industry by resigning within weeks of each other in May, with at least two seemingly forced out.
The departure of Ron Allen, Delta Air Lines' chairman, president and chief executive, appears to have surprised Allen himself. Neither Allen nor the airline will comment on why he will 'retire' as of 31 July at the age of 55, but there is a strong feeling he was pushed. Allen had become a firm favourite with Wall Street, which credits him with Delta's transformation from a chiefly domestic, southern-style operation to its status today as a leading international airline.
But the metamorphosis was painful. Allen's highest risk decision, to purchase the remains of Pan Am, plunged the company into severe debt although, ironically, much of Delta's success today can be attributed to that decision. Perhaps even more unpopular, however, was Allen's Leadership 7.5 cost-cutting campaign that demanded severe sacrifices.
The thinking at Delta's board of directors seems to be that it is time for a fresh face at the top, perhaps one that is more empathic with the wave of new middle managers that have appeared throughout the airline in recent years.
There is less doubt what happened with All Nippon Airways' president Seiju Fukatsu. As a reformer he became the victim of a bitter power struggle with the airline's old guard. The latter won out and 82-year-old honorary chairman Tokuji Wakasa and 71-year-old chairman Takaya Sugiura forced the president to resign in May.
But by month's end both Wakasa and Sugiura, along with three other senior directors, had themselves resigned and ANA seems to be back on a reformist track after the carrier named Kichisaburo Nomura, formerly senior managing director, as the new president. He in turn asked Fukatsu to remain as an adviser. Analysts say this leaves Fukatsu positioned as 'a powerful shadow samurai.'
Insiders say the game of power politics stemmed from a conflict over how the carrier should implement desperately needed internal reforms to prepare for the deregulation of Japan's airline industry. Fukatsu wanted to eliminate executives closely allied to Wakasa. He also scrapped the traditional promotion systems based on position and length of service and introduced annual salary reviews and promotions on merit.
The resignation of Pieter Bouw as president and chief executive at KLM appears more ordered by comparison. His successor from 5 August is current managing director and chief operating officer Leo van Wijk.
One airline insider says there is some speculation that Bouw was pushed because his Focus 2000 restructuring programme had 'lost its focus.' This suggestion is dismissed by the airline and by Frank Wade, vice president of consultants SH&E in Amsterdam.
But the source says Bouw created disquiet among employees by steering the Focus 2000 programme towards labour concessions when it was originally intended as a fundamental appraisal of KLM's product and strategy.
Wade rejects that claim but agrees that the most pressing issue for van Wijk is to 'focus even more on the revenue side of the equation' by pushing through a fundamental reappraisal of the business. KLM is very reliant on lower-yielding transfer traffic and to regain the higher yield traffic it must 'ensure that the product is leading in terms of quality,' Wade adds.
Source: Airline Business
