POLITICS & INSTITUTIONS - ECONOMY

Luxair CEO: “We will fly on”



Gilles Feith, pictured here at the Luxair Munsbach headquarters, took on the role of CEO in June 2020 Mike Zenari

Gilles Feith, pictured here at the Luxair Munsbach headquarters, took on the role of CEO in June 2020 Mike Zenari

Despite pressures across the airline industry, Luxair CEO Gilles Feith--who took on the role one year ago--sees plenty of opportunities for the airline to reinvent itself and be a force of positive change.

If you could describe your first year as Luxair CEO in one word, what would it be?

I have different words in mind, but the first word was ‘perseverance’. That’s also something which I have deeply ingrained in my character... perseverance is what we need here, basically to just keep going when you have these really adverse conditions.

Perseverance is also a very difficult thing to [have] when you don’t see the end of it. It’s like crisis management: you have to keep going, but you don’t know how hard and for how long you have to push. This also leads me to one of the books I would like to associate with the Luxair story. Simon Sinek wrote The Infinite Game, and, basically, running a company like Luxair is like keeping it flying forever, making it self-sustainable... You must be ethical, you must look at the environment, you must be social... if not, you will stumble... And that’s actually how I see that you can get out of this crisis. Everybody has to understand and to persevere.

That’s why one of the main things I introduced into the company here is transparency. I want to be transparent with how we--all together--get out of this situation.

Let’s compare it to a flywheel: basically, you start pushing it--and you have to push hard in the beginning because you have to get out of the situation--but then, afterwards, the wheel gets quicker and quicker, and it starts to auto-rotate. But that push? We’re still doing it today, and nobody would have expected that. In December, we said, ‘Okay, now we’re in spring ’21, everything will be fine’, but it wasn’t. We flew less in January and February than in the months of September, October and so on... but we kept going. Since the beginning, we achieved our cost base on the flights we made, but that only comes with perseverance. You have to constantly adjust the network, every factor. It would be easier to just wait and see. If you don’t persevere, you don’t have the effort part to go on.

You’ve given us some insight into how Luxair was impacted at the start of 2021, but what are the projections, now that we’re heading into the summer months?

What we see today is that leisure is coming back. People are reassured because Luxair chose to go deeper in its quality DNA and offer maximum security and safety to all passengers. In the hotels we offer full testing, and we have a safety concept which every hotel has to sign... We are very flexible also on the booking side... People start to notice [this], and they fly a lot more with us. We even see customers we didn’t have before... Whereas the Luxembourg people know Luxair, and many expats know Luxair as an airline, they don’t know LuxairTours, and they start to see that this is actually a cool thing, where you don’t have to worry about anything, you get the full package.

Then again, we have the airline, where we have 11 small Q400s, and business travel is very, very low. Some companies start because they see the benefit of face-to-face. Then... some routes, like Munich… there’s no connection to go from there to somewhere else. The airline industry is more heavily impacted by the covid measures than any other industry. We had passengers who wanted to go to Milan, who didn’t get the test in time. We refunded the tickets, no problem. But then they simply took the car and drove there, no questions asked... Testing is important, but it is posing a problem for us. We choose to integrate it into our packages, for example, but this also has a cost which goes on to our margin. But that’s how it is now, so we have to constantly adapt... [For] 2021 and 2022, there’s one word which will frame this: diversification. I have to diversify the network and see what works... But if you diversify, that’s one thing, but afterwards you have to consolidate again.

Let’s talk about some of those routes. Some routes planned for 2020, such as Manchester, have been impacted. But you’ve also launched several other new destinations...

Manchester is a good comparison. We started Manchester--and I still believe in Manchester--but [it]’s a route which is also dependent on how Virgin is operating, because it’s their hub. Also [with] Brexit, that means that we don’t have fifth-freedom rights, so we cannot land in the UK, take passengers and fly somewhere else in the UK, which would be a cool thing to combine Manchester with Edinburgh or whatever, which reduces [the] exposure on those routes.

My whole strategy, also for our pilots and all the people working at Luxair, is to do as much as possible, and not just wait until this is over because that will kill you for sure. We were looking at new routes... It’s not an easy thing, just to launch a route takes effort from many people at Luxair... It is not the CEO who does that, it is only the people who do it.

Dubai was a big success... it’s really at the end of the reach of our planes, so we had to check how many passengers we can take there... We launched it in February to test it, and the flight sold out in one hour and a half. We were blown away. But that rotation cost us an awful lot of money. I will not say the amount, but that’s a very big financial exposure... it’s a little bit of gamble, but we believed in it. It’s an expensive operation because we have two crews who sleep there, then come back the next day and so on. That’s why we also continue, to launch it as of 30 September, with the World Expo. It will be a success as well... People want to go to the World Expo, to warm places in the winter.

And do you know the business-leisure split here?

It’s mainly leisure. We have two phenomena: one is that it shifted from business to connecting and leisure. The mix went to, I’d say, 80% leisure. The other shift is that people book very late which, combined with the regulations in the EU to cancel [and] protect the slots, is a very hard thing for us to manage because we lost some slots because we have to cancel at least three weeks or four weeks in advance, given the slot regulation, and people don’t book four weeks in advance. So, it’s a gamble.

This article was originally published in the June 2021 print edition of Delano.