National Air

Makeover (from shame to fame)

Ñ"ж 1984 ÐŽV 1996, from loss making to aviationÐŽ¦s standard-setter

o Innovation (specially with the control handling system)

o High quality personal service

o Consistent profitability

o Systematic training

Ñ"ж From ЎҐairline to avoid at all costsÐŽ¦ to ЎҐworldÐŽ¦s best airlineÐŽ¦ / ЎҐworld classÐŽ¦ÐŽK was considered the most unpunctual airline, when flying from its own home country too

David Shott

Ñ"ж Initiated customer service training for all employees ÐŽ§front line firstЎЁ and ÐŽ§supporting the front lineЎЁ

Ñ"ж Restructured the airline ÐŽV emphasis on marketing and IT to maximize yield

Ñ"ж Overhauled HR system to align policies with the strategy of the airline

Robert Berger

Ñ"ж Shott brought him in as legal director and moved to director HR and director marketing and operations

Ñ"ж Sharpe mind ÐŽV thoughtful answers ÐŽV disarming modesty ÐŽV relaxed ÐŽV friendly ÐŽV media savvy

Ñ"ж Customer is GOD, kind of attitude

Ñ"ж Four objectives ÐŽV see page 45 ÐŽV most imp was to be ЎҐcountryÐŽ¦s best managed company for year 2000ÐŽ¦

Ñ"ж Announced twin strategy

o Business Efficiency Plan (BEP)ÐŽK biggest bonus declared in May 1996ÐŽK message was to reduce costs further in order to be better prepared for future competitionÐŽK reinforced the need for constant improvement

Ñ"ж Major cost cutting measures to be taken

o Ask 5000 employees to leave voluntarily over a period of 18 months

o New employees with more flexibility and more appropriate skills ÐŽV language and ability to deal with customers

o Foresight ÐŽV not waiting for financial disaster to cut costs, proactive to prepare for tough competition ahead

o Outsourcing accounting to Bangalore to cut costs

o Some cost centers were scrapped ÐŽV ShottÐŽ¦s baby ÐŽV Marketplace Performance unit responsible or customer preference and perception

Ñ"ж The share price increased from 7.46 Euros to 12.13 Euros

Turbulence

Ñ"ж In 1996 Berger said he will not spend 100 million Euros on the logo redesign but in June 1997 he actually did so ÐŽV justified as repositioning itself as ÐŽ§citizen of the worldЎЁ

Ñ"ж Thought the open office layout would work in his favour as a symbol of his ЎҐcaring, sharing management styleÐŽ¦

Ñ"ж He wanted to his staff to see him as ÐŽ§the model of a modern bossЎЁ „Ñ- wanted to be a great manager not a leader

Ñ"ж Pilots strike loomedÐŽK and later cabin crew was not happy with the new salary schemeÐŽK the new recruitÐŽ¦s salary was going to be less but seems it was not communicated properly leaving a lot of cabin crew employees unhappy

Ñ"ж When NABU announced a strike, instead of negotiating with them, NA sent out a harsh memo stating that employees stand to loose jobs if they went on a strikeÐŽK this is no way of trying to calm down an angry mob

Ñ"ж Employees even pointed out that Shott also did some mean things which were unpopular but he was somewhat considerateÐŽK with Berger, employees felt that he despised them ÐŽV ÐŽ§the dispute is not about money, its about how we are treatedЎЁ

Ñ"ж Public, Press and Politicians all condemned the behaviour

Ñ"ж Despite all the turbulence, Berger was hell bound on pushing his plans aheadÐŽK he didnÐŽ¦t care about the sore relationship and thought he can rebuild it once his ambitious plans were implemented

Ñ"ж Lacked empowerment ÐŽV was trying to make decisions most of the times

Rebuilding relations

Ñ"ж Task force to learn lessons form the dispute and produce a new spirit of co-operation ÐŽV lead by Martin Day

o To rebuilt the morale and motivation among employees

o Mend customer relationship

o Improve punctuality

Ñ"ж Priority was to improve operational performance

o Combined operations and customer services department

Ñ"ж IN-TOUCH ÐŽV employees not in touch with customers spent a day every year on the front line, to understand how it felt

Ñ"ж Confidential help-line created to provide advice and counseling to employees

Ñ"ж After achieving 900M saving