AIC Talk | John Felix: Weathering the storm (Part 1)

INTERVIEWER

When you were at Emirates Airline Holiday, what was the biggest crisis you’ve met? How did you handle it?

 JOHN FELIX

“To be honest, everyday is a new normal.”

In terms of crisis, we have had many. Probably the two most significant in my mind, would be “9·11” in 2001 and the tsunami 2004, both from a customer perspective and from a corporate point of view. To manage these two different cases, we adopted two precisely different operational solutions, but requiring the same positive and successful outcome, for both our customers and the company.

For “9·11”, people were not comfortable traveling on an airplane, so similar to today, we experienced a significant drop in passenger demand, across all segments. Although you could travel to any destination, understandably nobody was comfortable and willing to take a risk at the time.

We went through a considerable slowdown. As a company, part of the Emirates business culture and strategy was that we were able to build and maintain a reserve and manage ourselves for at least 6 months, in the event inflows of revenue were impacted. A wise and prudent practice that gave us the confidence to stay focused on ensuring we were ready to successfully ride the momentum of the bounce back.

What we did during  the slowdown  was to re-evaluate  our products, our peoples knowledge and skills and our processes and we further upgraded product and packaging, knowledge and skills and simplified and enhanced efficiency across all key operational areas.  The logic was to utilize the time in a manner beneficial to the business. When recovery happened, we were well placed to optimize the opportunities and recover what we lost during the slow down. After “9·11”, as people got more comfortable with traveling, the momentum of the bounce back was fast paced. That proved at that time, that we had utilized our time effectively. 

The tsunami in 2004 was different, as it involved a natural disaster, with direct impact to key leisure destinations and our customers.  All our customers in Asian beach destinations were impacted. Thailand, Malaysia, Sri Lanka and the Maldives, were all impacted badly and it was peak season, with numbers at their highest.

We instantly assembled a core team of specialists with deputies (operating on a 24 hour basis), from within, and covering critical areas. These included Destination Specialists, sent to the destination to coordinate with our Destination Management partners and hotels, on the ground (tracing everyone of our customers and making contact with them), Flight, Seat and Ticket specialists, coordinating with the airline reservations and booking teams (to get them back as fast as possible), at Head office and Customer Affairs specialists, coordinating with customers families and friends to keep them updated on the safety and return travel status of their loved ones. As a focused and fluid team, with strong leadership, fast decision making and clear communication lines, we traced all our customers. Despite all the difficulties at the time, and we got all our customers back safely. 

What makes Emirates Holidays unique are the intangible service elements provided, like speed of service recovery and customer support. We did whatever we needed to, to make our customers feel secure and comfortable, and to deliver on the guarantee that, in the event there’s a problem, Emirates/Emirates Holidays is a reliable and responsible service provider.

Those were probably the two major crises we went through.

Although there were several others as well, like SARS in 2003 that impacted one area, Asia.  Swine flu in 2009, and MERS in 2012, the impact was not in the same league of severity.

Again, it’s prudent using the time to refine what you have to get yourself prepared and ready to pick it up when it normalizes. I assume that many companies are actually using the time now. But yes, it does make for tough operating conditions, as you need to pay overheads. 

All indications show that conditions are beginning to (albeit slowly) move forward in the direction of normalizing, as we expect more people to travel, driven by the need  to do business and go on holiday, etc. We should contribute to the forward momentum.

The current situation is a turning point for all people and businesses.

INTERVIEWER

What was your target customer segment?

JOHN FELIX

Having been a part of Emirates, a full service airline, we pitched to the mid-market and upwards.

Our strategy was based around a fixed allocation of seats on every flight, in a dedicated class. Therefore, we maximized the yield return on every seat, both to the Company Emirates, and to ourselves as a division. It means we needed to cover all our cost and deliver profit to the company, on every seat we used.  A simple and straight forward commercial business logic.

Yes, we were not everything to everyone; we made sure we delivered our knowledge, expertise and service to the segment we operated within. To grow our customer base, we had to offer and deliver something that our customers trusted, so that they were willing to spend their money with us.

Similar to visiting a reputed car sales store, you’ll expect the sales person to probe and understand your need, knowledgeably tell you exactly what the car can do and how it will meet your specific requirement, not somebody who does not quite know that. Similarly for holidays, you want the person you speak to, to have firsthand knowledge of the destination, or easy access to firsthand knowledge, so they can effectively provide suggestions and options that meet your requirement.