Air Transport World

The business is actually fun again! (Air Canada)(includes related articles)(Company Profile)

Air Canada Chairman, President and CEO Hollis L. Harris knows about adversity. After a career at Delata Air Lines spanning 35 years, he lost the top job to a man 10 years his junior. In autumn, 1990, he took the chairman/CEO position at Continental Airlines, arriving just in time to lead the airline into its second bankruptcy reorganization in December. he spent the following year fighting to keep Continental afloat while entagled in boardroom intrigues that eventually cost him his title.

When he came to Air Canada in 1992, he was asked to take charge of a company that had lost nearly C$300 million in the previous two years. Furthermore, Air Canada had high costs, a heavily unionized work force and a bureaucratic mentality left over from its half-century as a state-owned airline.

But maybe Harris's adversity training paid off, because after a difficult two years reorganizing the company, Air Canada returned to the black in 1994, earning C$129 million ($91 million) on a 12% rise in revenues to C$4 billion. Reflecting its success in lowering unit costs, the airline reported a record operating profit of C$244 million.

Nineteen ninety-four was memorable for other reasons as well: Air Canada switched to a more sophisticated reservations system, launched Galileo Canada to replace the Gemini CRS, inaugurated service to the Pacific and Asia, and introduced a new international business-class product.

What's more, the airline expects to better its performance in 1995, Harris tells ATW. Productivity is up, costs are down, yields are rising; the market is looking favorable and the airline is poised to grow. Air Canada stands on the threshold of a new era with the recent signing of the U.S.-Canada open-skies bilateral (ATW, 4/95) and the commencement in December of service to Hong Kong, its long-sought Pacific Jewel.

"The business is actually fun again," declares Executive Vice President, Corporate Services and Chief Administrative Officer R. Lamar Durrett, who served with Harris at Delta and Continental, and followed him to Air Canada. Durrett and other executives with whom ATW talked speak of a new spirit among Air Canada employees and they attribute much of it to actions taken by Harris.

"Two years ago, there was a pall over this airline. People were unsure. We were downsizing. It was a distressed environment," says Durrett. "But then, when the airline started coming around, our people could feel and see that change was in the air. ... Almost by osmosis, you could see the employee group come around." He concludes: "Today, it's very obvious there is a special spring in the step, a smile on the face that wasn't there [before]. And I think our customers are picking up that attitude."

Executive Vice President and COO Jean-Jacques Bourgeault, a 25-year veteran of the airline, credits Harris with instilling a "new pride" and "can do" attitude at Air Canada that is reflected in the launch of Toronto-Atlanta service only 10 days after the airline received approval for it. Says Bourgeault: "He made people believe everything was possible at Air Canada."

Harris says his brief stint at Continental helped prepare him for the challenges he faced here. "I'd been on a very fast learning curve since leaving Delta. The entire time [at Continental] was spent in a crisis mode, trying to keep the airline from being shut down." Coping with Continental's withered cash position while fending off creditors also gave him the financial expertise he never needed to acquire at Delta. …

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