Former Comair and OneTime CEO’s autobiography ‘Crash and Burn’ provides a fascinating insight into a career in South Africa’s highly visible, ever-turbulent airline industry. In the book, a filter-free Orsmond rips the bandaid obscuring truth behind the spectacular collapse of 70-year-old airline Comair – and much more. BizNews editor Alec Hogg describes it as a riveting read and in this interview, hears more of the back story of a value-destructive industry from the man dubbed its second most hated person.
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Highlights from the Interview
In an interview with Alec Hogg, Glenn Orsmond discussed his experiences in the airline industry and his approach to leadership during challenging times. Orsmond, reflecting on his career, shared insights on making tough decisions, such as retrenching staff to save jobs and restructuring companies to achieve profitability. He emphasized that despite the negative perception of his decisions, they were aimed at creating sustainable businesses and protecting jobs. Orsmond criticized trade unions for their lack of contribution to job creation and their focus on preserving outdated practices rather than embracing necessary changes.
The conversation also touched on the airline industry’s unique challenges, particularly around safety and operational efficiency. Orsmond explained that airlines prioritize safety due to the high stakes involved, countering the misconception that cost-cutting compromises safety. He noted the difficulty in managing pilot unions, which often resist changes that would enhance productivity.
Orsmond also offered personal travel tips, preferring daytime flights to Europe and valuing comfort over cost savings. Despite the highly competitive nature of the airline industry in South Africa, he acknowledged that dominance by a single airline is likely to shift over time. The interview concluded with Hogg recommending Orsmond’s book, Crash and Burn, as a compelling read.
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Edited transcript of the Interview
00:00:08:20 – 00:00:45:09 Alec Hogg
When I read in the premium newsletter this week, looking ahead to the interview that we’re going to have in a moment with Glenn Orsmond, he’s the former CEO of Comair and the author of Crash and Burn. Let me show you that right up front. There it is. That’s what it looks like. I wrote that I get so many bad books, and years ago I took a decision that I would dump them if they weren’t good enough. They would be going into file 13, and often you’d get the publicist phone you and ask, “Oh, are you going to do anything on this?”
00:00:45:09 – 00:01:07:12 Alec Hogg
“Do you want to talk to the author?” And my response is to try and avoid the call. Or then if I have to get pushed into a corner, say, “Well, a very wise person once told me, if you can’t say something nice about it, just shut up.” And when it comes to writing a book, having written a couple myself, I know that it’s an enormous labor.
00:01:07:12 – 00:01:26:02 Alec Hogg
It takes a heck of a long time. So even though some people, they should stay far, far away from a keyboard, and they certainly should stay far away from publishers, they have put a lot of effort into it. So I don’t want to be nasty. But this book, man, Glenn Orsmond, I loved it. I was riveted.
00:01:26:02 – 00:01:50:00 Alec Hogg
You must know, reading your book has to compete in my life with The Road to Serfdom by Hayek or any other great book that I’ve got there. A very long list of to-read. And in this case, though, it was, it was fabulous. But let’s start your story where you start the book, which is in the old homeland of.
00:01:50:00 – 00:02:22:04 Alec Hogg
It’s 1989, you’re an accountant, not a person who went off into the airline industry because you were a pilot or obsessed about it. You’re one of the guys who shouldn’t have gone there, according to Warren Buffett, because he reckons, very famously, that if there had been a capitalist at Kittyhawk in 1903, when the Wright brothers had their first flight, he would have taken out a revolver and shot both of them because very few industries had destroyed shareholder value
00:02:22:06 – 00:02:50:08 Alec Hogg
to the degree that airlines have. And yet you arrived there and, well, spent, as your book tells us, decades, having a lot of fun meeting some really crazy people and quite a few miscreants amongst them. But what just, just maybe unpack from the start, why an accountant, which is a respectable career, would go into something like that?
00:02:50:10 – 00:03:15:20 Glenn Orsmond
It really was by chance. You know, there was no dream of working for an airline. I’ve never been passionate about aircraft. In fact, flying is quite excruciating, to tell the truth. That was a chance encounter. I completed my articles with Price Waterhouse. I was in messaging. I needed something to do. I went to a braai, met the guy who was CEO of the local airline, and just by chance
00:03:16:02 – 00:03:39:01 Glenn Orsmond
his CFO had just left and moved across to Comair. It’s a very incestuous industry, and he moved. He asked if I’d be interested, and I said, “Yeah, it sounds good.” In those days, you were hired without a psychometrics test, without HR involvement or recruitment agencies. And I started a month or two later. So I started in airlines purely by chance.
00:03:39:01 – 00:03:54:22 Glenn Orsmond
And once I was in it, I really just stayed in it. It’s almost like you need to stick to what you know. And the more I stayed in it, I became more of a specialist in that field. I was probably unemployable outside the industry, so I really just stuck in the industry for over 30 years.
00:03:55:00 – 00:04:17:07 Alec Hogg
You mentioned Comair, that features very prominently in your book, but the one part of it that I was really interested in, having watched and written and broadcast on the sector for so long, is that it’s a, it’s a bit of a club airlines. It’s not often that the real story comes out, and that’s, I suppose, why I found your book so fascinating.
00:04:17:09 – 00:04:45:00 Alec Hogg
We as journalists, it’s like a jigsaw puzzle. We get some of the pieces that come from public statements, but a lot of the pieces are missing, and your book certainly had a lot of pieces. For instance, the whole disaster of Comair. But let’s just go back a little bit. You met the Novik family, Dave Novik, the late Dave Novik and his son Gideon, who’s very highly exposed in South Africa.
00:04:45:02 – 00:05:01:17 Alec Hogg
You kind of had a mixed, reading through the book, a mixed assessment of them. And on the one hand, you really admired Dave. On the other hand, I got the feeling that you and Gideon didn’t really sit comfortably around the same boardroom table.
00:05:01:18 – 00:05:21:05 Glenn Orsmond
Comair was a great company. Dave Novik, he started in the 1960s. I think he left in about 2010, and for his full career there made a profit every year at Comair. And really, it was the three of them. It was Dave Novik as chairman, Martin Morris, who worked as a commodity chairman.
00:05:21:05 – 00:05:48:21 Glenn Orsmond
And Erik Venter, who was the CEO. This strange blend of the three of them working together combined these skills. Though their personalities were different, they formed a really formidable team. And it was that team that drove the business for the 40 odd years that they made consistent profits. So it’s not really just an individual, but the steel backbone of the business in a way, was probably Dave Novik.
00:05:48:23 – 00:06:11:08 Glenn Orsmond:
Yeah. And he’s the champ, an accountant as well. And I learned a lot from Dave. I have a high regard for Dave. I respect Dave, and I learned a lot from Dave. We obviously had at one point, mainly because of an anchor of foreign currency loss, which I shouldn’t have. And then after that, I’d left and started one.
00:06:11:08 – 00:06:39:01 Glenn Orsmond:
Tom. So that put the relationship under strain. But what’s really gratifying, probably about 2015, 20 years after I left, when I returned to Comair and Dave had already left ten years earlier, he called me when my appointment was announced as CEO, and he wished me luck. He said it was the right thing for the airline to hire me, and I was the right guy to fix the airline.
00:06:39:03 – 00:07:02:08 Glenn Orsmond:
So I found it quite gratifying that, when I said one time we thought each other to the death. I mean, we just fought every day, every imaginable area. We fought in the market, in the press, operationally, fighting for skills and people. So it was really a tough fight. But at the end of it, ten years later, he wished me well for the future.
00:07:02:10 – 00:07:21:06 Glenn Orsmond:
So, you know, that was really gratifying for me. The same for myself and Gideon. He wished me well on the book. He said, congratulations. We chat now and again. So I really like to believe I had no enemies in the industry, despite the times when we fought and the times we worked together.
00:07:21:07 – 00:07:27:02 Alec Hogg:
So why is it so confrontational in the business sense?
00:07:27:04 – 00:07:49:15 Glenn Orsmond:
I suppose it’s if you look at the personalities involved, you know, if you take who was running Comair, who was running Nationwide, if you take the actual people and you take their personalities, that’s really what drives how these businesses were run and how the businesses were conducted and the approach to competition and matters like that. At one time, it seemed to cross a line where it was no longer just competing in the market fiercely, and some lines were crossed at the time. I talk about dirty tricks that happened.
00:07:49:17 – 00:08:11:19 Glenn Orsmond:
At some point, it became personal, but, in fact, not probably for eight years because it’s not, you know, he said, call me. We never went to work. We went to war. You know, we fought every day knowing that there’s this huge airline next door to us, market dominant, whose sole objective was putting us out of business. So, those years were a lot of fun. Definitely the most exciting part of my career.
00:08:11:19 – 00:08:30:00 Alec Hogg:
A lot of the book does refer to South African Airways as well, but the part that kind of opened my eyes was in the early stages. You talk of an example of somebody who left SAA, went to Comair, gave across information that was confidential, and then was found out, was caught. And the ethics, as you say, the problem was that it wasn’t that we did it.
00:08:30:02 – 00:08:48:09 Alec Hogg:
It was that we were caught. That seemed to be the problem at Comair. And if you look at that, anyway, back to 1998 and the listing, etc., the founders banked a lot of money. They banked 300 million rands, which is 1.2 billion rand in today’s terms. So they were set up for life almost. So from there onwards, it was an interesting contrast.
00:08:48:09 – 00:09:00:15 Alec Hogg:
Yeah. You had these very wealthy people running an airline against a state airline that maybe wasn’t as well, certainly wasn’t as efficient, but was being subsidized by the state, by the government, as we know, massive, massive bailouts. It almost seems like an impossible journey. And yet you guys had fun.
00:09:00:15 – 00:09:23:03 Glenn Orsmond:
Yeah. One of the themes in the book that few seem to like, you think one theme is what made Comair great and what caused the fall? What was the root cause of the failure? And we all talk about these things. It’s just to show that the world in the ’90s was very different from the world now in terms of business ethics, in terms of HR departments, in terms of regulation, and in terms of competition.
00:09:23:03 – 00:09:43:13 Glenn Orsmond:
So, the world in the ’90s was a lot tougher than it is now, you know, in terms of the environment in which you operate. When I say that a lot less regulated than the environment in which you operate now. So I talk about that only as, if you look at the ethics, it was, we’ve been caught out. It wasn’t, we shouldn’t have done this, which is really the point I was trying to make.
00:09:43:15 – 00:10:09:19 Glenn Orsmond:
It’s just an anecdote about trying to put across that these are the ethics that prevailed in the industry at the time. And at the same time, I was part of it. So, you know, there’s no way I can go and throw stones and say, these are the bad guys, and I was the good guy. That’s how business was conducted in the ’90s.
00:10:54:02 – 00:10:58:15 Alec Hogg
And who were the good guys, or were there any good guys in this whole era?
00:10:58:17 – 00:11:17:06
Glenn Orsmond
I think, of course, of course. I think it’s like any other industry. There are as many good guys and bad guys, and the ones who succeed are a mixture of the good and the bad guys. And it’s just a creation of perception. It’s, I don’t think it’s unique to any other industry in terms of the bad guys and the good guys.
00:11:17:08 – 00:11:43:23
Alec Hogg
What is interesting, though, is that there was this drive by the then-dominant player, and it appears to be the same thing now with SAA, to put everybody else out of business by cutting costs. It’s a really dumb strategy when you consider the longevity of business because if you put them out of business, someone else is definitely going to come back in, as it’s happened time and again in airlines.
00:11:44:05 – 00:11:53:17
Alec Hogg
Why did the penny not drop for anyone that it really isn’t the right approach, or might there have been something else that was driving it?
00:11:53:18 – 00:12:17:20
Glenn Orsmond
When you talk about controlling costs, it’s not really chopping costs; it’s about becoming more efficient. In other words, if we raise our pilot productivity, that lowers our costs. So, when I talk about lowering costs, it’s really about being the most efficient in terms of how you structure your balance sheet.
00:12:17:22 – 00:12:18:19
Alec Hogg
I’m talking about…
00:12:18:21 – 00:12:19:20
Glenn Orsmond
I’m talking about…
00:12:20:23 – 00:12:24:16
Alec Hogg
I’m talking about the pricing. I’m talking about…
00:12:24:18 – 00:12:25:19
Glenn Orsmond
Okay, okay.
00:12:25:21 – 00:12:57:10
Alec Hogg
And it’s almost like in the airline industry, the desire for predatory pricing would put others out of business, and then they’d have everything and be profitable. But if one competitor goes out, someone else would come in. And now we’ve got the same with SAA, predatory pricing, very low costs. What is going on in the heads of the executives that they really believe that if we put these guys out of business, it’ll be a bigger market for us, without understanding that you’re just going to bring in another competitor?
00:12:57:13 – 00:13:18:08
Glenn Orsmond
You’re exactly right. It’s always a game of three, and it’s always someone else’s fault. One guy says, “You started it by lowering the price.” Another says, “No, you did.” All three will accuse the other of starting the war, claiming they were simply responding. But it is a consistent strategy: let’s drop prices in the hope of forcing someone out of business to gain market share. It’s not just about dropping prices; it’s about forcing people out of business in the hope of later raising prices, which is a theme throughout the book.
00:13:18:14 – 00:13:36:23
Alec Hogg
And it’s not just South Africa. It seems to be an international approach, which is, again, why Warren Buffett says that it’s the graveyard of capitalism.
00:13:37:01 – 00:14:07:18
Glenn Orsmond
You know, there have been success stories in aviation. Take KLM; it was a success story for 70 odd years. So, there are success stories, but the graveyard far outstrips the number of success stories. In South Africa particularly, I’d imagine in the last 20 odd years, there have probably been over 20 airline failures.
00:14:07:20 – 00:14:25:05
Alec Hogg
So is there one that is going to be a success? In other words, if you were to consult for an airline today, how would you recommend they go forward so that they will be that rarity in a sector which is very difficult to make money in?
00:14:25:09 – 00:14:50:22
Glenn Orsmond
It’s about focusing on the income statement, and I talk about the three critical success factors for an airline to succeed: first, you must have lower operating costs than your competitors. In other words, be more efficient in how you do things. Secondly, focus on cash. Always focus on cash because external shocks will come, and the airlines that fail are the ones that run out of cash. It’s such a fine margin. If you look at Comair, it was a 67 billion rand company, but in the end, the problem was 100 million rand. We could have traded out of that within two months.
00:14:50:22 – 00:15:07:07
Glenn Orsmond
So, focus on cash and avoid excessive debt. The mistake many airlines make is wanting to provide the newest and latest aircraft. They’re wonderful and fuel-efficient, but you’re taking on a lot of debt. So, simplistically, lower costs, grow cash, and avoid debt. You avoid it by flying older aircraft. In South Africa, earning rands, you can never afford new aircraft. It’s just not possible because the rand is depreciating every year, the inflation differential is high, and there are currency shocks. You really can’t afford to finance in front of US dollars.
00:15:07:09 – 00:15:34:05
Alec Hogg
So, why did Comair not resuscitate, given that it had been going for 70 years and had a great brand? And yet, when it died, it died.
00:15:57:15 – 00:16:23:07 Glenn Orsmond: Yeah. Which is really the title “Crash and Burn”—a sudden collapse. So it was a sudden collapse, you know, they were operating, got hit by COVID, went into business rescue, and emerged from business rescue. So I talk about, well, what was the root cause that led to this successful business having a sudden and immediate crash? It would be convenient to blame COVID.
00:16:23:07 – 00:16:55:05 Glenn Orsmond: It would be convenient to blame the civil aviation authority that grounded the airline. But, ultimately, Safair and Airlink survived the same COVID shocks, the same fuel price shocks. So, operating in exactly the same environment with the same external shocks, why did some survive and some collapse? And that’s really the root cause of Comair’s failure, which is this issue around, you have to control costs, you have to protect cash, and you have to avoid debt.
00:16:55:06 – 00:17:19:02 Glenn Orsmond: Now, when they took the decision to buy the MAX aircraft, it effectively wiped out all three. Because you take the MAX aircraft, immediately, you add the cost, it erodes your cash. You take the cash stockpile that they built up over ten years of a billion rand, and you use it for aircraft deposits. You’ve got no deposits, you’ve got no cash, and now you’ve got massive debt.
00:17:19:04 – 00:17:46:15 Glenn Orsmond: So, simultaneously, those three core principles are wiped out. And then mixed with it, a lot of businesses lost control of costs. Their breakeven load factor was 86% when I joined. So they needed to sell 86% of all their seats just to break even, which is impossible. Very few airlines could sustain a load factor above 80%, so the business model had built-in losses.
00:17:46:17 – 00:18:11:19 Glenn Orsmond: You then add to that inertia. The organization had grown fecund, lazy, the management inertia. No decisions were taken. And it was just this lumbering airline that, as Lincoln said, was just, they were just taking market share from them every day. And the solution was to take on more debt. You find operating losses. That was really—that’s part of it started prior to COVID.
00:18:11:21 – 00:18:20:19 Alec Hogg: And South African Airways. The demise or decline. But the ability to come out of business rescue in contrast to Comair.
00:18:20:21 – 00:18:51:00 Glenn Orsmond: Yeah, what the weakness in business rescue is that, unlike Chapter 11 in America, Chapter 11 in America is perfect because the company stays under control of management. You just restructure your cost base, and anyone who doesn’t like it, you get to cancel the contract. The flaw in South African business rescue is that you can cancel foreign contracts, but the foreign entities don’t recognize the South African business rescue process.
00:18:51:02 – 00:19:14:02 Glenn Orsmond: So, South African business rescue, if all your suppliers are South African-based, perfect. But our suppliers were all foreign-based, so we weren’t able to achieve any reduction. In fact, they squeezed us for more and more in business rescue. So the aircraft leases, we took a hammering. Sabre, which was all our technology, we took a hammering. Aircraft maintenance, we took a hammering. So all these huge costs, we weren’t able to reduce them at all because the foreign guys just said, well, we don’t recognize your business rescue.
00:19:14:02 – 00:19:40:19 Glenn Orsmond: So that’s really the one flaw. The other flaw in South African business rescue is that the business control is taken away from management and the board, and it’s vested in the business rescue practitioners. And practitioners are generally from the industry of the liquidators. You know, they normally specialize in business rescue, liquidation. And they manage with the fear of being sued. They worry that the creditors are going to sue them for a business rescue decision they take. So they hire an army of lawyers. So now legal fees rocket, lawyers are making the calls.
00:19:40:19 – 00:20:01:14 Glenn Orsmond: So if you just look at it overall, essentially in business rescue, you can’t reduce your costs, and you’ve got lawyers running the show. And that’s why it doesn’t really work like it does in America under Chapter 11.
00:20:01:19 – 00:20:14:06 Alec Hogg: You were fascinated by the brinkmanship that was played by the creditors of Comair. Just unpack that for us, because it’s almost like, you know, you’re going to lose more if they go bust. But I’m going to push the envelope anyway.
00:20:14:08 – 00:20:30:05 Glenn Orsmond: Yeah. It’s got every stakeholder, not just the creditors. The sad thing is Comair could have been saved because it didn’t need cash. It needed to—so when I say it didn’t need cash, it had a cash shortfall, which was at the ultimate lowest season in the year, which is May. So the end of May is when your sales are the lowest, and it really is always really tough at the end of May, and we had a shortfall.
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00:20:54:21 – 00:21:17:11
Glenn Orsmond:
We knew we could trade out of it because the season picks up in July and will be strong until September. So we needed about two to three months to say, look, we can pull out of this. We just needed some breathing space. And it needed to come from all the stakeholders—just a little bit. Something from lessors, from the South African Airports Company, from the regulatory authorities.
00:21:17:13 – 00:21:41:18
Glenn Orsmond:
Something from the staff and the trade unions, something from the banks. And we tried asking them all just for a little bit because we didn’t need a lot. It was 120 million, which is tiny compared to what they would have lost if the business went under. I’ve always had this view that sanity will prevail in the end. But this time, sanity didn’t prevail, and not a single one of the six stakeholders was willing to budge.
00:21:41:18 – 00:21:44:02
Glenn Orsmond:
Each of them thought…
00:21:44:04 – 00:21:44:09
Alec Hogg:
Knew.
00:21:44:09 – 00:21:53:17
Glenn Orsmond:
That this is not our problem. This is someone else’s problem. Please go away. And in the end, it was everyone’s problem, and they all ended up with something in their own way.
00:21:53:19 – 00:21:55:05
Alec Hogg:
And the role of the banks?
00:21:55:06 – 00:22:17:14
Glenn Orsmond:
You know, one of the flaws in the rescue plan was that the obligations to the banks were really aggressive in terms of interest rates. Unfortunately, the banks had taken the view when the rescue plan was developed that they weren’t really hard up for a rescue. They believed they had value in the aircraft. They had equity and could walk away from the deal if need be.
00:22:17:14 – 00:22:37:08
Glenn Orsmond:
So we were always on the back foot in trying to negotiate a deal. They just increased interest rates and really squeezed us on the repayment terms. Instead of extending the terms, they shortened them.
00:22:37:10 – 00:22:56:03
Glenn Orsmond:
So, that was really a squeeze on us in terms of interest rates and even fees. We had to pay a lot of fees to the banks, and those numbers were really substantial. But at the time, the banks had taken the view that, you know, they’d be happy to walk away from it.
00:22:56:05 – 00:23:05:09
Glenn Orsmond:
So that really wasn’t great. It was one of the weaknesses in the rescue plan that I have spoken about as well.
00:23:05:11 – 00:23:27:18
Alec Hogg:
There’s so much to learn from your experience, so much that people reading this book will say is wrong with the system: the banks, on the one hand, the business rescue practitioners, on the other, the introduction of lawyers, the exclusion of management. How the heck are you supposed to trade out of a difficult situation if you’re bringing in amateurs to run the show?
00:23:27:20 – 00:23:43:05
Alec Hogg:
But when you look back on it all and you look back on your career, do you have any regrets about joining that airline straight from school and perhaps not staying in the accounting profession?
00:23:43:06 – 00:24:04:04
Glenn Orsmond:
I have absolutely no regrets. I’ve enjoyed all of it. There have been lows, but fortunately, more highs and successes than failures. So I’ve enjoyed it. As for staying in auditing, I don’t think I would have made a great auditor. Audit files used to kill me. So, no, basically no regrets.
00:24:04:06 – 00:24:15:22
Glenn Orsmond:
It’s been a great career. Yeah, so it’s not over yet. And yes, I have absolutely no regrets. I’ve learned lessons and hopefully, there’s just enough time to apply those lessons learned. So let’s see.
00:24:16:00 – 00:24:18:02
Alec Hogg:
What is next for you?
00:24:18:04 – 00:24:39:10
Glenn Orsmond:
I know I need to stay in the industry, and there are always opportunities for new entrants. If you look at Safair, they are market dominant, with about 60% of the market share. There is a real opportunity, I’d say, for a new entrant, and that’s where I’ll be involved. But I think there will be a new entrant.
00:24:39:10 – 00:24:58:01
Glenn Orsmond:
I think it will be okay. They seem to be doing the right things. So, I think the market will end up with a premium carrier, Safair, as the low-cost carrier, and probably Airlink providing all the regional services. That seems to be where the market is now, but it needs a new entrant.
00:24:58:01 – 00:25:04:02
Glenn Orsmond:
It’s not healthy having secured 60% market share.
00:25:04:04 – 00:25:30:02
Alec Hogg:
And when you say it was a great career and you enjoyed it, your book reveals that much of your work involved fixing things. When you fix things, you start fighting with people. The pilots don’t come out very well in your book, and you can elaborate a little on that. But when you go into retrenching staff and getting people to cut, it’s not an easy task.
00:25:30:02 – 00:25:32:21
Alec Hogg:
How did you approach that?
00:25:32:23 – 00:26:00:10
Glenn Orsmond:
Yeah, it’s not easy, but I’ve always taken the view that in order to fix a situation, sometimes tough decisions are needed. For example, with the aircraft maintenance company, which was using 17 million and had 700 staff, I didn’t want to retrench half of them, but I ended up retrenching 350 people. The aim was to save the remaining 350 jobs. For me, it was always about doing what was necessary to save the jobs.
00:26:00:12 – 00:26:27:14
Glenn Orsmond:
So when Sam came in, they had 2,200 staff. We operated a similar-sized business with 1,200 staff. I still ask myself what I could have done differently. In the case of the maintenance company, we went from 700 to 357 staff, turned it from a loss to a profit. It’s almost like in order to secure jobs, I had to make those difficult decisions.
00:26:27:16 – 00:26:50:21
Glenn Orsmond:
Unfortunately, trade unions have never been much help in this regard. In my experience, they haven’t saved or created any jobs. They seem more inclined towards destroying jobs. That hasn’t been positive, but operating within a hostile environment means you need to change things or face a hostile environment.
00:26:50:21 – 00:27:07:08
Glenn Orsmond:
You’re telling the staff they need to work harder, but it’s something you have to do to create a sustainable business. The message to the staff was always that we need a sustainable business to protect your jobs. So we need to make these changes to ensure a viable business. But the unions just aren’t receptive to that.
00:27:07:08 – 00:27:31:04
Glenn Orsmond:
The unions would argue that we were trying to create profits at their expense. We were not. We were trying to build a sustainable business. If someone is earning 40% more than the market rate for the same job, we have to look at those salary levels. But conveying that message to the unions wasn’t easy.
00:27:31:06 – 00:27:54:09
Alec Hogg:
You know, they say if you think education is expensive, try ignorance. The pilots, as I mentioned, didn’t come out very well in your book. They seem to have been treated as a privileged class in the airline industry. Is that changing? Is there more reality now?
00:27:54:11 – 00:28:20:14
Glenn Orsmond:
Yes, it seems to go through cycles, but pilots are still extremely powerful. Somehow, they managed to negotiate their working conditions such that their lifestyle often trumped the operational requirements of the company. When I started my second stint, the pilots were flying an average of 60 hours a month, while city pilots were flying 85 hours.
00:28:20:16 – 00:28:42:15
Glenn Orsmond:
Additionally, the pilots were earning 30-40% more than city pilots. This disparity affected productivity and service. We had to reduce headcount and increase productivity, which created significant resentment among the pilots. I’ve faced considerable criticism, especially on social media, and was even called the second most hated person in aviation, with the most hated being probably someone else.
00:28:42:17 – 00:29:08:00
Glenn Orsmond:
I’ve really been hammered for it. I think I was called the second most hated person in aviation, with the most hated likely being someone else. I’ve taken a lot of criticism on various websites, but it had to be done. There’s no way you can afford to have your pilots’ productivity at half the industry standard when they make up 60% of your staff.
00:29:08:00 – 00:29:30:11
Glenn Orsmond:
So, the unions include Numsa, Solidarity, and the pilots’ union, but effectively they’re all after the same thing. It’s more about policing and ensuring that pilots meet their standards. The pilots are obviously more sophisticated in terms of safety and other aspects. But this is a common battle between management and pilots, not unique to South Africa or to me.
00:29:30:11 – 00:29:54:17
Glenn Orsmond:
It’s an age-old struggle. In the UK or Europe, for example, Ryanair has made significant progress in addressing these issues. However, many legacy airlines still face these challenges, with pilots often viewed as a special class.
00:29:54:19 – 00:29:55:10
Glenn Orsmond:
00:29:55:12 – 00:30:13:19
Alec Hogg:
It’s so interesting when you look at it with the benefit of hindsight. Those pilots would surely have thought differently had they known they wouldn’t be at Comair anymore, because presumably, they’d end up at Safair anyway.
00:30:13:21 – 00:30:33:00
Glenn Orsmond:
That’s exactly what happened. They ended up at Safair or elsewhere, flying the 85 hours and accepting the 30% lower salary. We had asked them to agree to a salary freeze for a period, but they weren’t interested in increasing productivity.
00:30:33:00 – 00:30:46:11
Alec Hogg:
And so, you mentioned being called the second most hated person in aviation. While you may be in a league of your own, does it trouble you, and why might that be?
00:30:46:13 – 00:31:10:09
Glenn Orsmond:
No, it’s not something that troubles me. I think it was just a dramatic opening line for the book review. I don’t believe it’s true. Throughout my career, I’ve never studied leadership or known what the appropriate leadership styles are, but I’ve tried to stay true to myself and my values. I’m sure I’m not the second most hated person at all. In any case, you have to make tough decisions in any business. You need to make calls on headcount and costs. Those decisions aren’t going to make you the most popular person around.
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00:31:10:09 – 00:31:30:05
Glenn Orsmond:
You need to make those tough calls in any business, but it seems to be especially difficult in airlines. Why might that be?
00:31:30:10 – 00:31:38:14
Alec Hogg:
And you need to make those calls in pretty much every business. But it just seems that in airlines, it’s more difficult for some reason. Why might that be?
00:31:38:16 – 00:32:04:18
Glenn Orsmond:
I think what makes it somewhat different is the focus on safety. Safety can never be compromised. There’s a false perception that airlines are safe because of civil aviation regulations. In reality, civil aviation has no direct impact on safety. Airlines regulate their own safety because it’s good business to be safe. You can’t afford to have unsafe incidents.
00:32:04:18 – 00:32:30:13
Glenn Orsmond:
So airlines invest heavily in safety. However, there’s often an association made that airlines cut costs at the expense of safety, which is completely incorrect. There is absolutely no link between cost-saving measures and negatively impacting safety. I’ve never been aware of a single case where a decision to save costs had a negative impact on safety.
00:32:30:15 – 00:32:51:20
Glenn Orsmond:
Safety is always prioritized, and airlines would rather disrupt operations or cancel flights than compromise on safety. Despite this, there’s a misconception that cost-saving measures might affect safety.
00:32:51:22 – 00:33:11:04
Alec Hogg:
You can understand that nobody would be foolish enough to say they’re willing to take a risk with safety. The end game is to avoid incidents that could have serious consequences.
00:33:11:06 – 00:33:23:08
Alec Hogg:
From your perspective, it’s not the end game, as you’ve explained. But maybe you could share some insider tips for flying.
00:33:23:10 – 00:33:43:05
Glenn Orsmond:
I don’t really have many insider tips. I prefer flying to Europe during the day, if possible, because I struggle to sleep on night flights. That’s some advice from my experience. I try to avoid saving a small amount of money if it means sacrificing legroom or other comfort aspects. I prefer to fly during the day rather than in the evening.
00:33:43:06 – 00:33:59:10
Glenn Orsmond:
Sometimes it’s not worth saving $100 if it means sacrificing comfort. I’d rather fly during the day, even if it means paying a bit more.
00:33:59:12 – 00:34:23:19
Alec Hogg:
Why are there so few flights during the day? I agree with you; I’d rather arrive in the evening and have a good night’s sleep than struggle to sleep overnight on a flight. Is there a landing obligation on airlines? Why are there fewer flights available during the day?
00:34:24:00 – 00:34:42:13
Glenn Orsmond:
My sense is that airlines make more money flying business class to Europe than they do from economy passengers. Business travelers need to use their time efficiently, so they prefer evening flights to maximize their business day. Most business travelers are willing to fly at night to have a full day for business the next day.
00:34:42:15 – 00:34:53:17
Glenn Orsmond:
Most business travelers aren’t keen on sitting on a plane during the day, but they’re okay with overnight flights if it means they can be productive the next day. That’s likely what drives the schedule.
00:34:53:18 – 00:35:14:09
Alec Hogg:
Well, maybe someone should rethink their strategy because with internet connectivity, as you now have, you can work during the day as well. I’m sure the industry is considering various ways to optimize their schedules.
00:35:14:11 – 00:35:21:02
Alec Hogg:
It’s highly competitive, and I guess it’s likely to remain so in South Africa.
00:35:21:04 – 00:35:27:02
Glenn Orsmond:
Yes, it’s not ideal now that one airline is dominant, but that will change.
00:35:27:07 – 00:35:55:08
Alec Hogg:
It’s been good talking with you. Thanks for your insights into Crash and Burn. We haven’t really touched on a lot of the controversial and insightful aspects, such as the board meeting with Brian Jaffe at Comair, the impact on the Novick family, and the departure of your successor and the resources they brought, among others.
00:35:55:08 – 00:36:16:07
Alec Hogg:
But I think it’s only fair to leave some of the details for readers to discover. There’s plenty left in the book Crash and Burn. I strongly recommend it. As I mentioned earlier, it’s a riveting and fascinating read. I’ve read many books, and this is definitely one of the better ones.
00:36:16:09 – 00:36:19:14
Alec Hogg:
Thanks, Glenn, for your time today. I’m Alec Hogg from BizNews.
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