When John Watson steps down as SITA director general at the end of June, his job is due to be split three ways as the organisation moves to a new group structure which could allow it to float off its remaining commercial arm.
Since he arrived at SITA seven years ago, Watson has steered the organisation through a series of major sell-offs. Although at its core SITA SC remains a not-for-profit industry-owned telecoms network provider, it also runs a business solutions arm SITA Information Networking Computing (INC) set up in 2000. Together the businesses share revenues of over $1.6 billion.
The proposal now is to split SITA SC, of which Watson is director general, and commercial SITA INC, of which he is managing director, into separate units within an overall group structure. Watson suggests that each unit would therefore need its own chief executive, with a group president overseeing central functions.
The new structure should pave the way for an eventual Initial Public Offering (IPO) for the SITA INC unit, although Watson concedes that a flotation is still some time off. If a sale had been a more immediate prospect, he adds that he might have been tempted to stay in place to see it through. "I would have thought that by 2005-6 they should be in a position to IPO SITA INC if the market has returned to any form of normality," says Watson. "It's probably better to get someone else in to take it through that process because you need continuity". So he decided to take up an option in his contract to retire early.
Watson saw through the lucrative flotation of Equant in the mid-1990s, which brought together the SITA network services delivered to multinationals outside air transport. Eventually Equant and the entire SITA network was acquired by France Telecom in 2001. Timing of the sell-off could hardly have been better, ahead of the bursting IT bubble. "We got rid of a lot of fixed costs," says Watson, but retained use of the network at "privileged rates".
Watson, who now plans to return to the UK, jokes that he hopes to bring his golf handicap back to where it was before he left for SITA in Geneva, but is likely to stay involved in the industry. Before joining SITA, Watson had headed IT at British Airways, where he had worked since the 1970s holding a series of posts from human resources through to sales.
KEVIN O'TOOLE LONDON
Source: Airline Business
