RAKESH GANGWAL Dizzy Heights
In a
dramatic turnaround, US Airways (formerly US Air), one of the most
chronically ill aviation outfits in the United States till about three
years ago, zoomed into the first place (more of the ranking later). The
driving force behind the airline is an Indian, Rakesh Gangwal, president
and chief executive officer, US Airways.
A year back, the airline had to ground its operations in the wake of a
quality survey of ten major American airlines including itself.
"The
recognition of US Airways as the top-rated airline in the United States by
the Airline Quality Rating study is a clear acknowledgement of the hard
work by the entire family of US Airways employees," said Gangwal.
He had announced two years ago that unless US Airways became a carrier
of choice, rather than a carrier of convenience, it will find it difficult
to earn substantial profit.
US Airways's annual revenues were $ 7.5 billion in 1995 and $ 8.7
billion in 1998. Its passenger load factor: 64.7 per cent in 1995 and 72.7
per cent in 1998. The operating profit shot up from $ 322 million in 1995
to $ 1.01 billion in 1998.
The total debt of the company has been reduced from $ 2.8 billion in
1995 to $2 billion last year, in spite of a huge buying spree.
One of the key factors that took US Airways to the top was its
relatively low claim of denied boarding -- when a ticketed passenger is
denied a seat on a full aircraft -- and the minimal mishandling of bags.
US Airways Inc is the main operating arm of US Airways Group. With
almost 400 aircraft, US Airways Inc operates more than 2,100 flights
daily, carrying an average of more than 155,000 passengers.
'Today, US Airways is sparring with the big boys,' noted
BusinessWeek recently. 'It has trans-Atlantic reach and fills up
some of the most modern craft in the skies. And after years of hefty
losses, earnings have once again taken off. And though US Airways shares,
like those of all other airlines, have been hammered recently by fears of
recession, they have held up better than those of rivals.'
Gangwal, 45, is a graduate of the Indian Institute of Technology and
has a Masters in Business Administration from the Wharton School of the
University of Pennsylvania. Prior to joining US Airways as president and
chief operating officer in February 1996, he was executive vice-president
(planning) and development at Air France and a senior officer at United
Airlines.
He is credited -- along with his mentor and company chairman Stephen
Wolf, 57 -- with cutting costs at US Airways, improving the overall
morale, and going aggressively after new routes. Their partnership started
seven years ago when Wolf put Gangwal in charge of planning for United.
When Wolf was made to leave United, Gangwal followed him.
The two have had a work-plan: Gangwal, detail-oriented, pores over
efficiency measures while Wolf pursues global visions, spending several
days in a month hammering new deals.
Gangwal, who grew up in Calcutta, believes that life is about learning,
touching, reading minds, understanding dynamics. "You can't boil it down
to a number," he says while explaining his life philosophy.
"Either we do it, or we perish," Gangwal had said when he joined as US
Airways.
Among the major undertakings Wolf and Gangwal took were: spending $ 14
billion for 400 new planes from Airbus Industrie to replace US Airways's
ageing fleet, shelling out $ 1.5 billion for new wide-body jets from
either Boeing or Airbus, replacing the airline's B767s and flying
international routes, allocating $ 300 million for expansion of US
Airways's operations in Philadelphia. The city, Wolf and Gangwal believed,
has a large population that is under-served and so ripe with potential.
"For the past three years, employees at every level of our company have
been working together to review all aspects of our operations and effect
the changes necessary to make US Airways the carrier of choice. Dramatic
improvements in such critical service areas as on-time arrivals, baggage
performance, consumer complaints and denied boarding are the result of
employee teams concentrating on these issues and bringing about change,"
Gangwal said recently.
"At the same time, an employee team planned and implemented an entire
new division, our low-cost service, MetroJet, which is serving 21 cities
only 10 months after its first flight. Another employee team worked for
months to bring about a very smooth entry into service of our new Airbus
aircraft, which are coming into the fleet at a rate of almost three per
month, bringing a superior level of comfort to passengers."
While these changes were taking place on the operational side of the
airline, Gangwal noted that US Airways also dramatically reduced debt and
returned value to shareholders through share repurchases.
Two weeks ago US Airways reported that revenue-passenger miles ratio
for March 1999 increased 1.8 per cent as compared to March 1998 while
available seat miles for the month increased 3.6 per cent. The passenger
load factor for the month was 73.9 per cent, a decrease of 1.3 percentage
points as compared to March 1998.
"While March began on a difficult note due to a series a snowstorms,
both operations and traffic improved as the month progressed and we are
entering April with a smoother-running system," Gangwal said.
In one sense,
1998 was a year of major restructuring, cost-cutting and consolidation
under Wolf and Gangwal. To highlight the rebirth of the airline, it
changed its name from USAir to US Airways and repainting all of its planes
in a new grey-and-blue color scheme.
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