Mixed reaction to Swiss airline choice

Pieter Bouw might not be the strongest leader for Crossair, says aviation specialist swissinfo.ch

The man nominated as chairman of Switzerland's new airline, Pieter Bouw of the Netherlands, is not a strong leader, says a Swiss aviation expert.

“Bouw is certainly not a first-rate manager. He’s not a top shot,” aviation specialist Sepp Moser told swissinfo.

Bouw, the former chief executive officer of the Netherlands carrier KLM, was named to the post on Wednesday by the steering committee charged with overseeing the new airline.

“His strong point is certainly that he has a lot of airline experience. He is not a newcomer to the business but he also has weak points.”

“He departed KLM involuntarily, he was fired in other words, and he hasn’t been successful since he left four years ago. He also tried to get the job of secretary general of the International Air Transport Association but he was not elected.”

But other analysts disagreed, saying that Bouw was the right person for the job.

The head of the Air Transport Group at Britain’s Cranfield University told the Financial Times newspaper that Bouw was an excellent choice.

“He is well respected and steered KLM through some very difficult times after the Gulf War,” he said.

Recognised expert

Swiss economics journalist René Lüchinger said on Swiss television that Bouw was a recognised airline expert. “He led KLM for many years. He knows the industry and the people in the industry and as a result I think he is a good choice,” he said.

In announcing the nomination, the committee found that Bouw had the “ideal profile” to direct the company which is being built around the regional carrier Crossair and the collapsed Swissair.

It said his long experience with directing a major hub, international freight and both short-haul and long-haul flights, made him an ideal candidate to take on the responsibility of shaping the new airline.

In 1998, KLM and its partner Northwest Airlines were jointly named airline of the year by the Air Transport World, which praised Bouw’s achievements.

“Beginning in 1991, under president and CEO Pieter Bouw, KLM inaugurated a growth strategy in combination with productivity improvements and unit-cost reductions. Over five years, the airline estimates that it boosted its productivity by 60 per cent,” it said.

History with KLM

Moser said there were two reasons why Bouw had to leave KLM. One was a plunge in earnings in the mid 1990s when most airlines were doing well, and his second problem was a political row with KLM’s United States partner Northwest Airlines.

He told swissinfo that the chairman of food group Nestlé, Rainer Gut, who leads the steering committee, would be the real director, behind the scenes.

“Actually he has a representative from the Swiss Reinsurance company in the board of the new airline [Jacques Aigrin, head of Swiss Re Financial Services] and so Mr Gut will be the strongman, definitely,” he said.

Bouw may have mixed feelings about coming to Switzerland because Swissair was a cause of one of his major career defeats.

At the time he was head of KLM, he tried to form an alliance with Swissair, Scandinavian Airlines (SAS) and Austrian Airlines (AUA) in a project called Alcazar but this failed in November 1993.

“The Alcazar project failed because Swissair did not yield to the demands of the other partners in two areas,” Moser explained.

“Swissair wanted to have more control over the alliance than the others were prepared to give and Swissair insisted on cooperating with Delta Airlines as the US partner and not with Northwest which was the partner of KLM.

“So Mr Bouw certainly has some bad recollections of the time of Alcazar. He was probably not very keen to come to Switzerland but when you don’t have a job, you take what ever is offered to you,” he added.

Bouw is certainly going to have no shortage of issues to deal with if approved by an extraordinary Crossair shareholders’ meeting due to take place on December 6.

These include integration of Swissair’s long-haul fleet, strict cost management, branding of the new airline, the choice of an alliance partner and the division of powers between the board of directors and the management.

“The problem is that he has no real say in the board because the business targets that the new airline has to attain are absolutely unrealistic,” Moser told swissinfo.

“Crossair is more or less forced to operate 26 long-haul aircraft out of Zurich and this is a number which is absolutely not justified by the market realities.”

“Mr Bouw will have to convince Mr Gut that this does not work and as he is dependent on Mr Gut, that will be rather difficult for him,” he added.

In other reactions to Bouw’s nomination, the “Neue Zürcher Zeitung” newspaper of Zurich also questions the division of power, noting that the management team had already been selected beforehand.

However, it said that Bouw was renowned for his iron will to get his own way and had made KLM one of the most profitable airlines in Europe.

Bouw realistic

For his part, Bouw told Swiss media on Thursday that he thought it realistic to take over 26 long and medium-haul flights from Swissair.

He cautioned that the future of the new airline would depend in part on the economy, and stressed the importance of gaining support from both the economic and political communities for the new company.

The 60-year-old avoided commenting on Crossair founder Moritz Suter’s failure to be included on the list of new board directors. “I would like to count on the inside knowledge Moritz Suter has in the future,” Bouw told Swiss television.

Bouw said he would also like to work with the current Crossair director, André Dosé who “has some good ideas”.

Cantons vote in favour of Crossair cash injection

The finance directors of 21 of Switzerland’s 24 cantons have voted in favour of providing Crossair with a cash injection.

At a meeting in Bern on Thursday, the majority of states said they would contribute towards the SFr400 million needed to help Crossair get off the ground.

Some SFr341 million has already been pledged by Zurich (SFr300 million), Basel city (SFr26 million), Basel country (SFr5 million) and Geneva (SFr10 million).

“It’s now up to each canton to decide if they will provide the money or not,” said parliamentarian, Charles Favre. In some cases, it might be necessary to hold a referendum, he added.

by Robert Brookes