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Tigerair chief Merren McArthur takes on aviation boys' club as Virgin seeks CEO

Merren McArthur has been at the helm of Tigerair Australia for less than three months, but she is already being touted as a possible successor to take over as chief executive of its parent, Virgin Australia.

Last month, Virgin boss John Borghetti announced his decision to depart the airline by the end of next year, leaving McArthur and Virgin’s head of domestic and international operations, Rob Sharp, as the two most likely internal candidates to replace him.

If McArthur were to be successful she would become the first woman to lead one of Australia’s two major airlines. As it is, she is a rarity in the global aviation industry, a notorious boys’ club.

Females make up just 3 per cent of global airline bosses and when the board of governors of the International Air Transport Association (IATA) posed for a picture to mark its annual meeting in Sydney in June, there was just one woman among 26 executives.

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Adding fuel to the fire, IATA’s chairman, Qatar Airways chief Akbar al Baker, responded to questions by insisting only a man could lead his airline “because it is a very challenging position”.McArthur is unruffled by the IATA controversy. “I [grew up with] two older brothers,” she explains. “I’ve never accepted that because I’m a woman I should not be expected to do this or do that.

"There are events and times when you come across people who aren’t comfortable with dealing with a woman. To me, it’s like water off a duck’s back. I’m just going to continue to do what I do.”

McArthur says to achieve meaningful change in the industry’s gender balance, there needs to be a break in the cycle.

“If it becomes a male-dominated industry, then there are certain expectations about what it is to be a leader in that industry.
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“People, by human nature, recruit in their own likeness. If you’ve got lots of male leaders then they’ll tend to look at other male leaders.”

This philosophy could work in reverse – and in McArthur’s favour – as Virgin Australia conducts its global search to replace Borghetti, who is leaving the airline after eight years at the helm. The search will be led by a woman, Virgin chair Elizabeth Bryan.

Asked a week before Borghetti’s announcement if she has ambitions to run a major airline, McArthur is non-committal.

“Maybe,” she says. “I don’t really have these lofty goals that I focus on. I focus on my current role. This is a big enough airline for me right now.” But she adds: “Whatever opportunities arise, I’ll grab.”https://www.afr.com/content/dam/imag...1652439339.jpg

That’s certainly what McArthur has done throughout her career.

Over the past 10 years, the former lawyer and mother of four daughters has taken on a number of leadership positions at Virgin Australia: running its regional airline, setting up its cargo division and heading up the airline’s alliance network.

Determined to make the move from law to business, McArthur joined what was then Virgin Blue in 2008, when it was run by Brett Godfrey. She has always been attracted to “challenger brands” and Virgin fitted the bill.

“At that stage, Virgin was ... relatively young and I really liked how it had changed the aviation market in Australia.”
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However, neither aviation nor law were McArthur’s first career choice. Growing up in Melbourne with her two brothers and younger sister, she wanted to become a diplomat, following a student exchange to South Africa.

Having been advised it was a good pathway, she studied arts/law at the University of Melbourne. Although she gained good marks, they weren’t quite high enough for her chosen calling, so she became a reluctant lawyer.

From the start, she was drawn to commercial law and ended up working on some of Victoria’s big privatisations during the 1990s. After 20 years, she wanted to move on from law and take on a business role.

This wasn’t as easy as she thought.https://www.afr.com/content/dam/imag...5050510869.jpg

The transition from lawyer

“There was an expectation that partners in law firms don’t have the commercial and business sense to be able to work in a corporate environment,” she explains.

So when the role of deputy state solicitor in Western Australia came up in 2005, she decided to take it. This was a big decision as she was leaving behind a high-paying job and packing up her young family – all four girls were still in primary school – to move to Perth.

“When I told the managing partner that I was leaving the partnership to go and work in the public service, he nearly fell off his chair,” she says. “It was about a quarter of the income.”

After two years, McArthur got her entry into the corporate world, working on commercial agreements for Rio Tinto’s iron ore division. A year later, she made the leap to Virgin Blue, settling the family in Brisbane.

These interstate moves were possible because McArthur’s husband is an architect and could work from home.

During her first six months at Virgin, McArthur kept thinking “once this particular project or this particular challenge is behind us, it will settle down and it will get back to business as usual but it never did”.

One of the more testing periods was during the October 2011 grounding of Qantas’ fleet, when McArthur was responsible for putting on extra Virgin flights to help stranded customers.https://www.afr.com/content/dam/imag...0511505359.jpg

But the closest she came to a full-blown career crisis was a year earlier, when she found herself in the middle of a showdown between Virgin Australia and the US Department of Transport, which had rejected a proposed alliance between Virgin and Delta Air Lines.

McArthur, who was in charge of Virgin’s alliance network and responsible for the Delta Air Lines alliance, was sitting on one side of a long table, flanked by Borghetti, head of government affairs Jane McKeon and Australian ambassador to the US Kim Beazley. Opposite them at the department’s new headquarters down the road from Capitol Hill were two rows of about 16 officials.

Virgin’s alliance strategy – one of the key planks of Borghetti’s airline overhaul – appeared to be in disarray.

“We weren’t prepared for [the Delta knock-back] at all,” she concedes. “Everybody just assumed this was a slam dunk because we were the two smaller operators on that route. We were just expecting it to be a yes and the ACCC had already approved it.”

To make matters worse, Virgin’s alliance with Air New Zealand was rejected by the Australian competition regulator just a day after the Delta knockback.

“All in 24 hours,” says McArthur. “I was thinking, oh my gosh, this is my career.”

But McArthur and Virgin managed to turn both decisions around, and this intense period helped pave the way for her promotion in May to run its low-cost carrier Tigerair. (Air New Zealand this year switched sides, announcing it would end its alliance with Virgin and set up a codeshare partnership with Qantas.)

Seeking stability

McArthur won’t say much about her plans for Tigerair. It is early days and after the interview, she is heading off to brief the Virgin board about her strategy. During her first two weeks she met with about 200 staff, roughly a third of the airline’s workforce, visiting crews and riding with pilots.

She has been charged with stabilising the airline after its earnings took a hit from a regulatory dispute in Indonesia, which prompted the unexpected exit from its Bali route last year. Earnings fell almost 13 per cent in the first half to $6.7 million as a result.

She takes umbrage at a suggestion she is at the unglamorous end of a glamorous industry.

“Low cost doesn’t mean you have to be cheap and nasty,” she insists. “To me, I see it as innovative and providing a good value proposition where people can choose what they want and pay for what they want and keep the airline industry competitive.”

We return to the subject of the day – being a woman in such a male-dominated industry.

“I haven’t tried to develop my skills to be a man, but perhaps I’ve developed my skills to be effective in that environment,” she says.

“Sometimes you need to change the way you message to make sure you’re heard. Importantly, once you get comfortable in that environment, you can use your femininity to your advantage. I quite enjoy that.”

https://www.afr.com/brand/boss/tiger...0180613-h11brd

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Originally Posted by The Bullwinkle (Post 10189889)

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