October 2003 > Executive Interview Back to latest issue

Stirland to bow out




Tom Ballantyne 

The 47th Assembly of Presidents of the Association of Asia Pacific Airlines, to be held on the Korean island of Jeju in late October, will be the last for the organisation’s director general, Richard Stirland. He will step down next year after a decade at the helm. He talked to TOM BALLANTYNE about the past, present and future.

 
  Richard Stirland
  Born : September 22, 1942, Nottingham, England
  Education : Graduated from St Peters College, Oxford University.

 

Career path : Joined Cathay Pacific Airways' parent company, John Swire and Sons in 1964. He had been hoping to join the shipping industry and was disappointed when he was assigned to what was then a very small Cathay Pacific with only a limited regional network. With hindsight hr said it was the best thing that could possibly have happened. His senjor positions at the airline included commercial director and director for corporate development.

 

Quoteworty : When asked in 1994 why he joined the OAA [now AAPA] he said : '' it is a challenge. The OAA is full of potential which has never been exploited. It is an organisation which has been taken for granted by the airlines since its inception [in 1967].

No sooner had Richard Stirland established himself in the Manila Secretariat of the Association of Asia Pacific Airlines (AAPA) then the Orient Airlines Association (OAA) - in 1994, than he stepped straight into an ongoing scrap with the

For the tough-talking former Cathay Pacific Airways executive it was the first round in a series of battles defending the position of Asia-Pacific airlines as they tussled with major challenges, from airport user charges to environmental issues, air safety to economic downturns and terrorism to SARS.

Stirland, a man with an encyclopaedic knowledge of the industry, has always relished a fight. In those early days, he left WashingtonD.C. in no doubt about what the region’s carriers thought of U.S. open skies pressure; in short and to put it politely, not much.

Ultimately, the U.S. did forge deals for open skies with more than a dozen countries, but the issue turned out to be a amp squid’  according to Stirland. Why’  ‘Firstly, the economic strength of the U.S. carriers to exploit these rights diminished because they were struggling with their own demons on their home ground. Secondly, a lot of the things they wanted to achieve with open skies, essentially fifth freedoms within the region, were achieved anyway in a much more cost-effective way by code-sharing with alliance partners.’ Today, according to Stirland, the biggest challenge confronting Asia’s airlines is very different. ‘It is envisaging the possibility of moving beyond alliances to global brands and airline takeovers in a different environment, including liberalisation of the rules concerning ownership and control.’ Even in a supposed global environment, there is tremendous nationalistic feeling against foreign companies coming in and taking over indigenous companies, he said.

‘The indefinite future lies with globalisation in the airline industry and countries are going to have to accept the fact that their airlines might become a subsidiary of a big organisation.’ Stirland, who spent 30 years with Cathay Pacific and its parent, John Swire & Sons, before joining the AAPA, which is now based in Kuala Lumpur, is the first to agree the last 10 years have been the most traumatic in the industry’s history.

’Any period that includes the events of September 11 in the U.S. and SARS has got to be unprecedented. The remarkable thing is these episodes have demonstrated the incredible resilience of the airlines in this part of the world and the underlying dynamic of growth in Asia, which makes these things, even though they are dramatic and traumatic at the time, blips on the long-term graph of the growth of Asia-Pacific carriers.’ The way regional carriers have coped with ongoing crisis is the classic metaphor of the Asian bamboo bending with the wind, rather than snapping’  he said.

For years, he added, the fundamentals of the airline industry in Europe and the U.S. have been flawed.

It’s like a human being. When these crises hit, if the constitution is weakened by years of debilitation, they are much less able to resist the onset of the disease. In the case of Asian carriers, they have years of success and growth and profitability and therefore they are able to shrug these things off,’ he said.

There have been two primary lessons learned from recent crises, said Stirland. ‘It has demonstrated the value of the incremental system of ordering aircraft used by Asian carriers.

’For a long time, we have not seen anyone going out and placing massive orders for new aircraft. By doing it on an incremental basis, when crises hit such as September 11 and SARS the airlines have not felt the need to make massive cancellations or renegotiate orders as carriers in the U.S. and Europe did.

‘Secondly, rather than panicking and firing huge numbers of staff, there has been a general consensus between management and staff at the region’s carriers that everybody from senior executives down to the lowest levels should take salary cuts, so very few have been laid off.

‘This means when times get better salaries can be readjusted and you are not sacrificing all the built-up experience and the sense of community you have in the airlines. Everybody is making a sacrifice and when times get better, everybody benefits.

Stirland said there are always regrets about aims that may not have been achieved. ‘But given the success of the Asian carriers and their modernisation of fleets, innovative products and reputation for in-flight service, it’s hard to see what more they could have done,he said.

‘The one area in which there is always room for improvement, and where in many ways the Asian carriers have lagged behind, is perhaps the issue of safety. ’Stirland has no plans to be idle in his retirement. He plans a two-year course to study Southeast Asian art at the BritishMuseum in London. A keen walker, he also wants to ‘Explore the Himalayas in much greater detail than I have in the past’

 

U.S. as it pushed to gain unlimited access to Asia’s lucrative skies for its major carriers.

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