Open, frank and disconcertingly humble, Acting CEO André Viljoen talks to us about his mission to stop the bleeding at Air Mauritius. We take the opportunity to put to him all the sensitive questions concerning our national carrier. From alleged overstaffing to political interference and unjustified dismissals, he shies away from none.

¦ I would have asked you about the health of Air Mauritius (AM) except that you’ve already told us that it’s very sick. Are you confident that the treatment you are administering is the right one?

Let me just maybe clarify the health situation. Yes, we’ve recorded a loss of Rs21 million for the 9 months ending in December. Historically, and I’m talking for many years, the first 6 months of the year are our worst period because, seasonally, it’s our lowest period. It’s the European summer and you find that fewer tourists come here. Our peak period is normally between October and December, and it’s the quarter during which historically we make a reasonable profit.

¦ Except that this time you didn’t.

No, and there are reasons for that. We expected or hoped that in the third quarter, we would be able to offset the loss made in the first two quarters and end up in a breakeven situation. Now while we took that view, Europe is affected by the European crisis: the demand is down. The fuel prices are high- about $110 a barreland the euro weakened against the dollar.

¦ Yes, we do know the consequences of that as you earn in euros and spend in dollars…

Exactly. Besides, demand ped further from Europe, a lot of additional competition came into the market, fuel prices stayed above $110 a barrel and the euro weakened from around 1.45 in June down to 1.29 and remained there till the last day of December. And all of that basically swung us deeper into the red. We went from a loss of Rs18 million to one of Rs21 million. We lost Rs3 million for the quarter.

¦ You are talking like a businessman in an ordinary company. AM is our national airline. Is its profitability measured only by the colour of its spreadsheet?

You have different airline models. An airline like Emirates and other national developer airlines have a business model where their sole purpose is to develop a hub like Dubai or Abu Dhabi and profits aren’t a major consideration. Now Air Mauritius is a hybrid: on the one hand, we’re a national developer, on the other hand we need to be a profitable airline.

¦ As a national developer, when you cut down your routes the way you have, aren’t you in effect cutting the grass from under our feet? Beds in hotels, covers in restaurants, branded items in shops…

No, because we believe we’re offering a better service. Besides, we’re not just a national developer. We are an airline that must make a profit and at the same time have national interests that we balance.

¦ But are you balancing those well enough?

Now let me tell you for example, in the airline industry, there’s a norm called T57 which says you start a route like Italy or France or the UK with a minimum of three flights, ideally on Mondays, Wednesdays and Saturdays. Then you grow to five flights and you then achieve seven, which is daily. And it’s all about convenience to passengers and flexibility. Now when you fl y a plane once a week, to Milan for example, because you’re trying to offer a service everywhere, you find that that’s no service at all. What does the passenger do the rest of the week?

¦ What does he do now for the whole week with no flights at all?

Now, we’ve got 18 flights a week to Paris and there is a connection twice a day from Milan to Paris. Why would we fly once a week to Milan and lose money when we’ve got 18 flights a week to Paris and there are two flights a day connecting you from Milan to Paris? We’re saying fewer destinations will be fl own more often when these destinations have a contribution to profit and we can be a successful airline. But at the same time, we’re still balancing the national interest. For example, there’s another route we fl y once a week now which isn’t making profits either and that’s Shanghai. We are keeping that one because there are a lot more prospects in Shanghai than there are in Europe.

¦ How is it that some airlines in the Middle East are riding the wave?

Because they have a totally different business model.

¦ So why can’t we copy their model?

Because then the state would have to fund the airline.

¦ Talking about states, how much interference is there from the state in the Air Mauritius administration?

I’ve been in this position for nearly a year and I’ve had no interference.

¦ None at all?

What interference?

¦ I’m not inventing anything, but it is a well-known fact that many recruitments and promotions are done on a political basis.

That may have been done before my time. In my time, there have never been such practices.

¦ You are very lucky but even if this was done before your time, you must be reaping the consequences. Aren’t you overstaffed, for example?

We are in the middle of carrying out an audit. It is not completed yet so claiming that we are overstaffed would be pure speculation.

¦ Would the fact that you have a disproportionate number of managers, 180 for 2800 employees, be a speculation as well?

Well, there are a lot of people who are graded with a management grade for salary purposes because they have specialized jobs. Because we don’t have a specialist grade, they are called managers.

¦ And what do they manage?

(Laughs)They are in the grade of managers because we do not have a ‘specialist’ grade but we will correct this and we will have only those with a management role in the management grade. This is part of the HR audit mandate. Through the audit, we may also find that we have a shortage of staff in some areas and an excess in other areas. So that would help us to know where to move and restructure staff around.

¦ But surely you don’t need an audit to know whether you are overstaffed or understaffed, do you? You can use benchmarks.

We have done that. We have measured and compared the number of employees with the number of seats. We have 12 aircraft. If you multiply that by the number of seats, it comes to 2800 seats. With 2800 employees, we have one employee per seat.

¦ Some airlines run on less than half that ratio.

Yes, but that’s because they may have 300 aircraft. We have only 12. So we have a scale problem. Only the audit will tell us whether we have an excess and allow us to rebalance our staff.

¦ Does that mean that some jobs may have to be axed?

If that’s the end result, yes. We don’t have a choice but to improve our financial position.

¦ Another criticism we often hear is about free air tickets that used to go to board members and ex-board members. Where are we as far as that is concerned?

There’s a misconception on this thing called a free air ticket. Firstly, a seat that is unsold is spoilt the next day when the flight has happened.

¦ You can sell it cheaper.

We do. We now have a policy of maximizing revenue per flight. What we do is look at every flight and try to raise as much revenue as we can from that flight going right up till the last minute and trying to sell every seat. We’ll prices on seats at the last minute to sell them.

¦ Yes, but when you prices at the last minute, we don’t get to hear about them.

We have software that goes through every booking 72 hours before the flight leaves. If by then you don’t have a ticket, then we open that seat to employees and board members. Every airline in the world uses this as an attraction for staff. It’s a way you can look after airline staff, to say if there is an empty seat, I would rather give it to you than let it be wasted because it can’t be sold.

¦ For staff, that’s understandable but why should former board members continue to enjoy the privilege?

I was with South African Airways. When I left, I got tickets for 10 years. That was part of my deal.

¦ But that doesn’t make it right for a company that’s ailing…

No, I am not talking about a company that’s ailing… I’m just saying that it’s normal practice in the airline industry. I don’t deal with board matters. I’m sure they will look at things again. But every airline in the world will give their senior executives and their staff a number of tickets and depending on your seniority and your years of service, you will get a few confirmed tickets.

¦ Coming back to the restructuring of the airline, some of the criticism is that all these measures you are proposing to take are common sense. Did you need to pay for an exorbitant report by a foreign company?

(Hesitates) I would like to ask you where you got the word ‘exorbitant’ from.

¦ I assume that foreign experts do not work for free. If they did this time, I stand corrected!

It wasn’t free but it wasn’t exorbitant. They charged a market related fee.

¦ Can you disclose it?

I can’t because that’s confidential between them and us. But it was a reasonable fee to come and do a very extensive review of our whole network. The bulk of the work went into the network and we had to be 100% convinced that the changes we are making are for the betterment of the airline.

¦ Would you say that Air Mauritius is an equal opportunity employer?

I can tell you that in my time, I’ve done my best to try and ensure that there is meritocracy and that appointments are fair. Yes, we’ve had a problem in this company for a long time with the lack of a Human Resources manager so I have been handling all HR matters and I am doing my best to make sure all recruitments and promotions are fair, balanced and respect meritocracy.

¦ So why is there so much frustration when it comes to employment in AM?

I’m not saying there aren’t instances where errors were made. I can tell you that one of the first things I did when I came in was to go through all the criteria for all management appointments and I found inconsistencies over the years. So we cleared all that up and we’ve gone a long way to ensuring complete consistency.

¦ That still doesn’t answer my question.

(Sighs) You know, there is an expectation by many people working in the company that simply because they’ve obtained a degree they should get a promotion. I have without fail, once or twice a month, had someone coming in here and asking, “When am I becoming CEO?” “When am I becoming an EVP because I have an MBA now?” There are so many MBAs in this country and I admire that but having an MBA or a degree does not automatically qualify you for promotion. So what happens is that, when someone is promoted or gets a job, there are 100 people who will complain to the ICAC because they believe they are owed promotion. It’s easy to criticise. I’m not saying it’s perfect errors do happen, but I am not aware of intentional ones. I must add that in the case of promotion of senior management upwards, senior manager, vice president and executive vice president are promoted on the prerogative of the board.

¦ On your recommendation?

Yes, but it is their prerogative.

¦ Do they always approve your recommendations?

In some cases. In other cases, they will assist me. If we need a Chief Financial Officer tomorrow, that will be the final decision of the board. It will not be my decision.

¦ But has it happened that the board has been against your recommendations?

No.

¦ How well do you get on?

We basically have a very good relationship. I respect them and they respect me. We work well together in the common interest of the company.

¦ Talking about the common interest of the company, does that include the figure of ten million which it cost you to get rid of three people?

You know, that was before my time.

¦ Yes, but it was paid off recently.

It was paid before my time.

¦ And you have no knowledge of it?

I’m aware that three people had been terminated and settlement paid to them. But again, that was dealt with by the then CEO.

¦ And there haven’t been any other instances during your tenure?

Not during my time, no. I always look forward. I don’t go and search in the past. It’s destructive and a waste of time.

¦ Looking forward, what is the outlook for Air Mauritius?

Well, if we sit here and do nothing, we will be in serious trouble by the end of next year. Just like every other airline in the region and internationally, we have to do something. There is going to be a concentration of the network and there is going to be a very tough programme internally to reduce costs.

¦ What about this idea of having a strategic partner that was floated? Wouldn’t that save you?

The worst thing to do is to run with your tail between your legs to a strategic partner and say “Save me”. What we’re saying is, let’s look at Air Mauritius today. Let’s be really honest. First thing, we have a good airline. It has a good brand and a very safe history. It brings over a million tourists to this country. What has happened is that the model of flying once a week to some destinations with a very high price of fuel no longer adds up. If fuel was $70 dollars a barrel, we wouldn’t have a problem. At $120, it can’t work. Also, we have to look at efficiency, performance management and improving how we do things. Now, the one positive is, we have got wonderful people. While every one always criticizes us…

¦ But are they performing as well as they should? We don’t criticize you we criticize your performance.

I agree. We have this major culture of underperformance in the company. There is no question that we have some employees who work very hard and some who don’t work as hard. I don’t blame the individual. I blame the system. I blame the lack of HR and the lack of performance management. Today, we have no performance management in the company. Nobody has Key Performance Indicators (KPIs). We are going to put in a performance management process where every person knows what we expect of them. And we will take off again. Take it from me!

Touria PRAYAG
(Source : l’express Weekly)

Touria PRAYAG