Fiji Airways’ Future-Fit Leadership
Fiji’s national airline spends $9 million annually on procurement purposes, its managing director and chief executive officer, Andre Viljoen said.
While the airline was laughing all the way to the bank on the back of years of preparatory and hard work that now were showing signs of paying off, soaring fuel costs ate into the company’s costs, he told the Top Executive Conference 2022, at Shangri-La Yanuca Island.
And while the company had offset such a challenge through investment in fuel-efficient aircraft, the airline maintained its “strategic sourcing” position, where it would continue into the future leaving no stone unturned, to save on cost and generate more revenue.
Fiji’s national carrier took steps years before COVID-19 that helped buffer the company when the global pandemic finally hit home, Mr Viljoen, said.
In fact, its preparations for the economic impact of COVID-19 pandemic dated back to 2016, when it invested in psychological, mental and fiscal readiness to boost its own culture, he said.
And when the pandemic finally hit, Fiji Airways switched to future-fit mode.
“Ten years before COVID-19, we were profitable,” he said, while speaking on leadership in adversity, at the Top Executive Conference 2022 (TopEx).
“We educate service which has been a game changer for us, running refresher courses every quarter.”
No where in the world does such a small airline as Fiji Airways exist with as many success stories.
He told executives at TopEx to develop a growth mindset for futurefit leadership.
He said adversity was the nature of the airline business.
Mr Viljoen spoke about future-fit leadership in his address to the 270 delegates gathered at the two-day annual event held at Shangri-La Yanuca Island, Coral Coast.
“Future-fit leadership goes beyond emotional mindset,” he said. “Like many small airlines, our biggest challenge was our model. “Before COVID-19, we spent a huge amount of time building up grit.”
During COVID-19, the national carrier reframed its thinking and strategy, and adapted to future-fit leadership transformation, Mr Viljoen said.
“We focused on future strategies,” he said.
Beyond COVID-19, Fiji Airways is focused on its future-fit challenges, he said.
Fifteen years pre-COVID-19, more than 15 airlines had disappeared, Mr Viljoen said.
Ninety-five per cent of travelers into Fiji were holiday makers, with a lot of time and little money, he said.
“When 95 per cent of your business is the holiday makers who want a cheaper deal, you can see why the model is challenged,” Mr
Viljoen said.
“On the higher end, business people with little time and a lot of money, pay a higher fare to do their business.
“When five per cent of your traffic is business-related, it creates a problem.”
Limited destinations meant travelers had to plan their convenience based around the airline’s flight, he said.
As a second tier airline, Fiji Airways played secondary role in Australia to Qantas, and Air New Zealand when in Aotearoa, Mr Viljoen said.
“We don’t set the price; we follow the price,” he said.
“We also don’t have market power; we offer one destination, Fiji, while Qantas offers the world, so does New Zealand, and America; our market power is limited.”
And unlike some airlines, Fiji Airways does not have a frequent flyer programme, Mr Viljoen said.
“We have a subscription scheme for locals only; again, a disadvantage,” he said.
With 19 aircraft in its fleet, Fiji Airways has the bulk of its revenue paid in Australia and New Zealand dollars, Mr Viljoen said.
“The bulk of our costs are paid in US dollars,” he said.
Fiji Airways rebuilt its culture every quarter since 2017 - one of the many steps it took to prepare itself.
“We looked at that extra one or two per cent to raise our business model,” he said.