Originally Posted by
MickG0105
Fair point. I should have said 'virtually zero airline experience in the current century'.
Okey doke, so let's apply those metrics of success.
Having good and smart people around you and being able to make well-informed and smart decisions. How do you reckon he scores on that?
Exhibit A. He brought back Keith Neate as CFO. Within three months of Neate's return to the business they had racked up $995.7 million in debt (the $325 million Australian bonds issue on 26 November and the $670.7 million ($US 425 million) US bonds issue on 7 November). They used $711.1 million of that to fund the Velocity re-acquisition transaction; paying $700 million to buy back 35 per cent of the business that was sold in 2014 for $335 million. Leaving aside the fact that the re-acquisition itself would take at least six years to break even, that transaction and the associated debt raising comprehensively tanked the balance sheet - the business had negative net equity. It was the equivalent of selling not only your final, contingency and alternate reserves but a bit of your trip fuel to boot.
Exhibit B - the rightsizing fiasco. The business's most significant cost control measure that two months after its nominated completion date had failed to achieve 20 per cent of its targeted savings.
Exhibit C - being essentially clueless on the actual financial status of his business. Again, his appointee as CFO was apparently incapable of discerning that the business they were running was insolvent. It's bad enough that that happened at all but the fact that they traded insolvent for three weeks past a month end is pretty much inexcusable.
If you wanted to pick over the bones you could probably add Exhibit D - the Haneda strategy to the list. We'll never know whether swapping out Hong Kong for Haneda would have been a successful play for international or not but there was always a certain lack of logic to moving from one tightly contested route with two direct competitors to a similarly tightly contested route with three direct competitors.
I have no doubt that the current CEO is popular but that's most assuredly not the same as being competent.
I agree with you. JB proved that popularity and blowing smoke does not equate with business acumen. PS was very slow out of the box on reform which indicates to me that the task was either not fully understood or too big for him to grasp. Don't mention the Board who obviously didn't have clue what was happening..