Airline CEOs are generally disliked by frontline employees. That’s not true across the board, but I can’t think of many airlines where the average frontline employee would say “we love our CEO.”
Why are airline CEOs so unpopular?
There are probably a variety of reasons for this:
- Most airline CEOs seem to come from other industries and are viewed as being out of touch
- Many airlines have unionized workforces, and in general the dynamic between unions and management causes management to be unpopular
- Airlines historically just aren’t very profitable, so running them in a way that makes shareholders, employees, and customers happy, is really difficult; as a result, they often have to make tough decisions that won’t be popular
For example, last November American Airlines released the results of an employee survey, which gives you a sense of how employees feel about management. For example, only 26.4% of employees felt favorably about the statement “leaders at American Airlines make the right decisions that take care of our frontline team members.”
KLM’s CEO is really popular
Last week I wrote about the current challenge at Air France-KLM. Air France-KLM has a new CEO, Ben Smith, who is doing a fantastic job. He’s an incredibly competent leader, and he’s exactly what the company needs to turn things around.
There were rumors last week that Smith might be looking to replace KLM CEO Pieter Elbers, as his contract expires this April. The rumored reason for this is that Elbers doesn’t want KLM to work more closely with Air France, which is a big part of Smith’s vision.
The problem is that Elbers has done a phenomenal job running KLM. Like, a really, really great job, as he has made the airline extremely profitable.
But his strengths go beyond the profitability of the company. In light of the news that he may be replaced, the Dutch government sent a letter to KLM’s supervisory board praising his record. But there’s even more.
25,000 KLM employees have signed a petition demanding that Elbers stay on as CEO of KLM. The airline has 35,000 employees, so that represents over 71% of the company’s workforce. And that doesn’t even mean that the other 29% disapprove, but rather just that they didn’t sign it.
The letter accompanying the petition states the following:
“There would be a very real risk of unrest among the employees and unclear and potentially unstable management if Pieter Elbers were to be forced to step down.”
That’s pretty remarkable, and off the top of my head I can’t think of another CEO who is this popular (please let me know in the comments of any you know of!).
Smith is in a tough situation
Ultimately we don’t really know what’s going on behind the scenes here. I feel confident in the following:
- Smith wants the entire Air France and KLM operation to be run as smoothly as possible; while it’s Air France that needs the most help, the two companies need to work more closely together if they’re going to do as well as their major European competitors
- Elbers wants KLM to be run as well as possible, and he has shown that through his track record at the airline
The big outstanding question here is to what extent Elbers is resistant to closer cooperation with Air France. We don’t know if he’s just putting his foot down and saying “as long as I’m here we’re not going to be working more closely with the basket case which is Air France,” or how strong their disagreement is.
Ultimately Smith is CEO of Air France-KLM, and has three interests to balance — those of Air France, those of KLM, and those of Air France-KLM. Right now KLM is doing well, Air France has room for improvement (and is improving), and Air France-KLM as a whole is somewhere in the middle.
With Elbers’ support, Air France-KLM could likely be in a better situation long term. Without Elbers’ support (or if he were let go), KLM might suddenly become a problem as well.
We’ll have to see how this plays out…