Stormy waters demand a steady hand on the tiller

The two shortest, maybe, similar in temperament very probably, but the similarities with the man behind British Airways and the ever-expanding mainstream giant International Airlines Group begin to fade from there. Mr French’s challenges are rather different.

Since floating Flybe on the stock market in December 2010, the regional carrier has issued three profit warnings and its share price has become stuck around the 64p mark (it listed at 295p). It has been grappling with sustained high fuel prices and falling consumer spending and this month is expected to report a pre-tax loss of about £8 million for the year.

“Looking back on it,” he admits, “last year was probably the worst, most difficult months of my career.”

One analyst even speculated that Flybe was in danger of becoming an “Ocado with wings”, referring to the online grocery delivery business promoted heavily before its stock market listing, only for its share price to tank.

“That was a bit of a silly comment,” Mr French says. “That was when analysts didn’t understand the business. It is most unfortunate that coinciding with our first year of the market the sector declined so sharply and fuel went up. You couldn’t have timed it worse from that point of view. And therefore I can understand why the market punished us so severely. The profit forecasts were down substantially, after all.”

At least the 58-year-old has been here before. Three months after he was promoted to the top job at Flybe, then known as British European, in 2001, the September 11 attacks knocked the airline industry sideways. Most thought that the loss-making BE’s days were numbered, but through what friends and colleagues have described as immense powers of persuasion, Mr French talked the airline’s biggest shareholder to agree to a radical overhaul of the airline.

Out of that emerged the no-frills operator Flybe — the “flying bus”, as Mr French fondly refers to it — positioned between Ryanair and easyJet on one side and British Airways on the other. Its emphasis is not on rock-bottom prices but on the frequency and convenience of its services. Businessmen should be able to fly from Belfast to Birmingham, hold meetings and return home that evening.

Prices have been creeping up. In the year to March 2011, the average fare per passenger was £76.15, compared with £72.61 in the year to March 2008. EasyJet’s average fare was £63.29 in the year to last September.

“We are a bus service in the sky. We do not fly 180-seater airplanes. Our average airplane is 85 seats and that is because we think it is more important to fly two, three, four or even eight or nine flights a day to some regional communities, as opposed to one a week or twice a week on a big jet.

“I liken us to a corner shop. If on a Sunday morning you run out of a loaf of bread, you don’t go into your corner shop and say: ‘How much is your bread?’ You say: ‘Have you got some bread?’ ”

According to the Berwickshire-born Mr French, who moved to Devon to be near Flybe’s headquarters in Exeter, the airline is perfectly poised to take advantage of the upturn — when it comes. It has been quick to try to take advantage of the demise of bmibaby, taking on routes between the East Midlands and Edinburgh, Glasgow, Paris, Amsterdam and Jersey.

Mr French also places huge emphasis on the importance of Manchester airport — Flybe’s new regional travel hub — in its drive for growth. Flybe has recently opened 86 new point-to-point connections to and from the likes of Aberdeen, Belfast, Edinburgh, Exeter, Glasgow, Inverness and the Isle of Man and claims to have reduced connection times to as little as 35 minutes. It has also formed alliances with other carriers flying from Manchester, including the United Arab Emirates’ powerhouse Etihad. The plan is to encourage people to connect to long-haul routes from Manchester, rather than Heathrow or Gatwick.

Indeed, the takeover of bmi by IAG appears to have helped. Mr French says that carriers are now reluctant to use bmi because it is owned by an arch-rival and “a lot are now turning to Flybe and saying: ‘I would love to work with you.’ They are saying to us: ‘Look, we also have services out of Manchester to Abu Dhabi, Dubai, New York, wherever it might be. You have loads and load of flights going into Manchester. Will you work with us?’ ”

Flybe also plans to exploit the fact that larger carriers struggle to make money on the short-hop Flybe routes yet need to ensure they can meet the onward needs of long-haul travellers. Last month Finnair, the loss-making national carrier, agreed to hand over the operation of a third of its European routes, 12 Embraer aircraft and about 200 cabin crew to Flybe to cut costs.

Mr French started his career as a ramp agent at Glasgow’s Prestwick airport for Caledonian Airways. On his first day he was promoted after the rest of his team were fired for getting drunk at a staff party the night before and crashing the work van. He hadn’t gone to the party because he had been taking his driving test in order to secure the job.

He climbed the ladder with Caledonian and Air UK and later pestered Jack Walker, the late steel magnate and Blackburn Rovers owner, to take him on at Jersey European. It was Mr Walker’s family, still the largest shareholder with 48.1 per cent, who agreed to Mr French’s overhaul of BE as Flybe in 2002.

He says that the greatest compliment he was ever paid was being asked to speak at Mr Walker’s memorial service. He stood alongside Jack Straw, at the time the foreign secretary, who spoke about Mr Walker as president of Rovers, and the bishop of Blackburn, who spoke for the local community.

“I was asked to speak as one of his best friends,” he said. “He taught me an enormous amount, that if you really believed you could make something happen you could. In 2002 I honestly believed we could turn the business around.”

The turning point came five years later, in 2007, when BA paid the Exeter-based group to take on BA Connect, its loss-making regional subsidy. Flybe doubled in size and took out its main competitor at the same time.

With hindsight, should Flybe have rushed to the markets in 2010? Mr French admits that if his crystal ball — or indeed anyone in the City during the company’s pre-float roadshow — had told him that demand for flights was going to dip by 5 per cent and the price of oil was going to rise by 40 per cent then the decision may have been different. “The truth was nobody knew at that time, so it was entirely the right things to do. It was an incredibly successful float. The timing was absolutely on the bullseye.”

And from here on-in, it is “a case of steady as she goes. Be patient. Avoid taking risks and keep a nice steady hand on the pillar.” An apt conclusion from a man who has been described as looking more like a tug-boat captain than an airline boss.

CV

Age 58 (born in Berwickshire) Education Ayr Academy, Stratchclyde University Career 1970-80: Caledonian Airways; 1980-90: Air UK, holding various board roles in commercial, planning and marketing; 1990: Flybe, then known as Jersey European Airways; 2001: managing director of Flybe; 2004: made a Fellow of the Royal Aeronautical Society; 2005: appointed chairman and chief executive of Flybe Other 2009: appointed CBE for his services to the UK airline industry Family Married, three daughters

Q& A

Who is your mentor?

Jack Walker and Stephen Hanscombe, the now-retired chief executive of Air UK and a significant figure within the aviation industry Does money motivate you?

Of course money matters, but there are other, more important things in life What was the most important event in your working life?

The creation of Flybe Which person do you most admire?

Her Majesty the Queen, the UK’s greatest ambassador What does leadership mean to you?

Leadership enables you to achieve many of life’s goals. However, it also enables you to help others to develop their own careers and abilities How do you relax?

I relax through my life at home and also watching Exeter Chiefs, below, play rugby, although the latter is not always relaxing!