Airline boss on long-haul mission to help Flybe take off to new heights from its busy base at Belfast City Airport
Margaret Canning speaks to Flybe chief executive Saad Hammad about coping in a crisis by turning massive losses back into profit, his commitment to regional connectivity and hopes for the future
He’s had one of the toughest jobs in the UK aviation industry over the past two years — but Flybe chief executive Saad Hammad is still brimming over with enthusiasm for the job and the ‘purple spirit’ of the airline.
Mr Hammad is paying a visit to George Best Belfast City Airport, where Flybe is the biggest operator with around 622 flights in and out every week on 15 UK routes.
It employs 188 people here, including 169 crew and 13 engineers.
Of around 1.5m passengers, around a half are business customers, a quarter leisure and a quarter visiting family and friends.
And Mr Hammad and wife Katherine have reason to use the airline for that third purpose. His in-laws were from Northern Ireland — though they raised their family in England — and his father-in-law, former World Bank agronomist John Coulter, still lives in Ballynahinch, Co Down.
The former easyJet chief operating officer joined Flybe in August 2013 to turn it round from catastrophic losses — which reached £40.7m annual losses in June 2014 —and back into a profitable regional airline.
With drastic reductions to headcount, the closure of unsuccessful routes and bases, the company said last month that their turnaround is “on course,” announcing pre-tax profits of £22.9m for the six months to September 30 — up from losses of £3.3m in the same period a year earlier.
With eight aircraft kept in Belfast, it’s got a strong operation here. But it hit turbulence last year when a Belfast-Glasgow flight had to make an emergency landing at Belfast International after an engine caught fire.
And Mr Hammad is adamant it did not harm the image of the airline or its customer numbers in Belfast. He praises the “passionate” workforce of Flybe in Belfast.
“These things happen in any airline but our staff dealt with it extremely well. Clearly these things are of tremendous concern to customers but because we did all the right things, people see this as a professional airline putting the safety of customers first, and that we will do what it takes. That creates confidence so that in the fullness of time, we don’t see any lasting effect. We have been growing since that event. If you do the right things and respond in the right way, you will get a lot of support and loyalty.
“It was a textbook example of how to respond in a crisis.
“These things do happen and the key is to put customers first and make sure no one gets hurt. It’s unfortunate it happened but I’m glad we followed all the right procedures. And our staff reacted in a calm and professional way.”
The airline says passenger numbers have grown 4% in the last year, with 1.5m flying in and out of Belfast between October 2014 and September 2015. And capacity has grown by around 13.9%. Mr Hammad, who was born in Lebanon but went to boarding school and university in England, is passionate about regional airlines and says that Flybe competes well with rail and the roads for getting people around the regions.
He’s evangelical about the role Flybe can play.
“If it didn’t exist you’d have to invent it,” he said. “It’s needed to link up regional cities which are increasingly undeserved by other airlines. It creates a powerful economic value. We aim to be the airline for the regions and the airline on your doorstep. But we want to be linking customers not just for the short-haul but also on long-haul.”
To that end, Flybe has eight codeshare partners for linking up passengers with international flights, including Cathay Pacific, Finnair, KLM, Air France and Etihad – and the most recent recruit, Emirates.
Despite the potential international reach, it’s clear that the regional connectivity is the airline’s — and Mr Hammad’s — raison d’etre. “It’s a sad reflection that in many ways the regions have been denied that connectivity over time. Around 15 to 20 years ago you had perhaps 20 regional routes out of Heathrow. Now that’s down to single digits — just four regional routes.”
Over 2016, the airline plans to increase capacity on its Liverpool, Edinburgh, Glasgow and Aberdeen routes from Belfast.
“We want our routes to perform,” — but he vows that the airline is “agile and nimble” and reduces or removes routes where necessary. “We have to be flexible but we don’t do anything knee-jerk and we do think things through.”
But he rails against the Chancellor George Osborne for not making himself available to discuss the airline chief’s idea to resolve the air passenger tax problem. Regional passengers in the UK are levied for both their departure and return flights within the UK.
The Northern Ireland Executive abolished APD on long-haul flights, but it remains in place for short-haul flights at £26 in total.
Mr Hammad said: “It’s a tax on the regions and you have to pay it twice — that’s a double-whammy. I want this government to do something about it. I understand if it’s not possible to reduce the overall level of tax, but can’t it be levied in a more fair and equitable manner? As it is, it’s a disproportionate and iniquitous tax on the regions.”
His solution is a higher rate of tax for flying in and out of Heathrow — a form of ‘congestion charge’ similar to the London congestion charge for traffic, which he says would “level the playing field”.
The father-of-two loves working in the airline industry, and is a former non-executive director of Air Berlin, and a serving NED with Pegasus, the Turkish low-cost airline. But he cautions against falling in love with the industry.
His wife Katherine has just finished writing a chick lit novel — and while a “trans-atlantic thriller and romance,” Mr Hammad says that airlines and the perceived glamour of the aviation industry do not feature heavily.
And the cost controls he’s introduced to Flybe in his turnaround bid are far removed from that glamour.
That has included not just the closure of bases and the removal of routes but also getting crew to work more efficiently.
“That spirit of cost consciousness that means people work to be more efficient and more practical.”
And he vows that the job isn’t over. “Look, I’m not going anywhere. I’m really committed to Flybe and I am not finished yet. We have 18 months done of cost-cutting but there’s another 18 months to go. But now the future is secure. We’re putting the legacy stuff behind us and this will be our first year of real velocity. We want to grow and we don’t want to stand still. I’m enthused about our prospects here in Belfast.”