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Barbara Cassani: Go (part 1)

Barbara Cassani turned £25m of British Airways’ money into a business worth £374m. Now she's bidding for the Olympics

In four years Barbara Cassani turned £25m of British Airways’ money into a business worth £374m. Now bidding for the Olympics, the Go founder took time out from promoting her new book Go: An Airline Adventure to tell Growing Business why she thinks the airline was sold too early, what she really thinks of Stelios why buying Concorde was never an option.
What did you want to come across in the book?

One of the things I wanted to come across in the book was the culture of the company. Whenever you talk about culture it becomes gag-making. It either falls into jargon or it becomes really insincere. And it’s very hard to put your finger on ‘what is a culture?’ and ‘what is a bad one?’. But you know, you feel it. You can recognise it, but it’s hard to describe. I didn’t want it to descend into, especially because I’m American, into a horrible American ‘empowerment’ and oh, just awful terms that have been hackneyed.

How do you foster a culture with a can-do attitude, where staff take responsibility or were you just lucky?

Well, I think it’s about every stage of the experience in the company making it consistent with the way you want people to behave. So, when you recruit people, if it’s in an area where you want people to work together you make sure working with other people is an important part of their personality. If you want them to work together and solve problems you have to allow them room to do that in the way that you do their job description. And then the way that you coach them to improve on the job, either reinforces stepping a little bit outside the role and offering ideas or it punishes. This comes down to how you reward people in terms of pay rises and the way you make people into heroes within the company. Who you choose to put the spotlight on says a lot about what’s important in that company. The other thing, particularly with leaders, is that everyone’s watching you. You need to demonstrate the behaviour you want people to emulate. And if you stomp around screaming it gives everyone else permission to do the same thing. Or if you issue orders to people and summarily dismiss people or you favour people in your team, that’s noticed. And there becomes a pervasive sense of unfairness. But if you talk about fairness a lot and you try to demonstrate it in everything you do, and there’s a consistency then it seeps into the mindset.

What are the principles you abide by?

Consistency is really important to employees. If you say something’s important, show that it is and not just flavour of the month. Fairness can’t be something that comes and goes. It needs to be pervasive. You can’t be fair to employees and then unfair to customers. Again, it’s jarring if there are inconsistencies in the approach of a company. None of this is brain surgery. You could describe these as principles of living your life. You trust people who do what they say they’re going to do. It’s that basic.

The way you were treated by 3i opposes that view somewhat, in that they had given their word that you’d go to IPO three years down the line. That didn’t happen and they held talks with Stelios. How did that make you feel?

The issue I had with the whole 3i relationship was that we had a plan. I stuck to my side of the bargain. I was doing everything that I said I was going to do and they pulled the rug. If I were looking at it from their perspective I could understand what they did. I don’t think it was completely ridiculous. They didn’t show much courage and they didn’t show very much belief in what they were doing. They were chicken! I think they could have made, and we all could have made, three times more money by being brave. It’s as simple as that. The consequence of them pulling the plug, was that customers lost a great airline, employees lost a really good employer that they enjoyed working for, that was really more than just a job. And that was the end of it. So it was a very strange and sad outcome for something that didn’t have to end that way. But it says lot about the kind of company they are.

Were there comparisons with BA’s acquisition of Dan Air and the way employees were treated then, because you were part of that and telling people they were having their salaries reduced was something you found difficult?

No, it was different. For me it was more a case of the reality of putting two companies together who are in very similar businesses. It was obvious that one set of rules needed to be applied to both businesses. Personally I felt the Go brand was better than easyJet and had wider appeal. I think the Go on-board service was better, the website was better. There were lots of aspects on a clearly assessed basis that were just better. And it’s just a shame to buy a business and not take what it’s actually better at. But, c’est la vie!

Have you kept in touch or met up with Stelios since?

(Shakes head)

Is there any antagonism there? Was it a particularly difficult relationship?

Well, we didn’t really deal with each other. We really only had that one meeting that was in the book. He clearly prides himself on being an entrepreneur. He’s very very busy with his other ventures. You know, they’re not making money. He’s got a lot on his hands. But, can you imagine being 28 years old and starting up easyJet? He’s clearly a talented entrepreneur. In that respect I admire him.

And Michael O’Leary?

We were talking about this earlier. But I’ve never met Michael, so I don’t really have any opinion about him. He’s not my cup of tea as a business person, the way he runs his airline or as a person – I mean his language is a bit ripe. It was funny. Everybody made it out that there were these big battles. But the battles were really in the marketplace. They weren’t personal. And I actually don’t think easyJet buying Go was personal. It wasn’t about Barbara Cassani. It was about taking out a competitor that was smaller than you, that already had a lower cost structure and was going to eat your lunch – because you could do it. Not because 1+1=3, but ‘holy cow, they’re going to eat our lunch if we don’t get rid of them and if they get any bigger we won’t be able to get rid of them’. Real power politics.

So you’d never involve Stelios on the Olympic bid?

If easyJet wanted to be part of it, go for it. They’re one of the biggest airlines here. I don’t feel that way. I don’t hold grudges and look back. The bid needs everyone involved to be successful.

Which entrepreneurs do you admire? There’s obviously some admiration for some of what Stelios has done.

No, I think he leaves businesses too early, which is evident and has happened with all his other businesses.

 

As far as you understood, that wasn’t the type of company they were.

Yeah, and also I didn’t have that much choice, did I. You know, when I was doing the management buy-out, BA was selling the business with or without me and I chose the best of the lot, and I think they were, to be fair.

Were you naïve to go into that deal thinking they would see out the three years and go to IPO if a better opportunity came along, given that they were suffering badly with the dotcom crash?

Yeah, but the likelihood of someone else coming along was very low. Remember, 9/11 happened and easyJet put the bid in three months after that, which is extraordinary. The whole thing was really quite extraordinary. Usually it doesn’t work that way. Usually venture capital companies end up holding onto airline investments for a long long long long time, because they’re hard to get out of. And easyJet had tried to buy us before and had failed. And so I guess, I wasn’t naïve, I was mistaken.

And was it a particularly bitter pill to swallow that the company buying was run by Stelios?

It was unbelievable. I’m shaking my head right now and I look back on it and I can remember when the first phone call came in, because I’d been through this before. And I was frustrated that, you know, we had the better business, we were harming them. That’s clearly why they wanted to buy us. It’s just the luck of the draw. They were older than us and had gotten to market before we had, and they had a stronger capital base and they had the ability to raise money because they were a public company, so they could take us over. And it’s as simple as that. I’m not really angry with anyone. It’s nothing personal about it. It’s just arghhh, it’s frustrating that as a result of just little flips of luck in who was first and who was second etcetera, that’s who survived. And I think the customers are worse off, which is the sad thing.

How do you think the takeover has gone?

There’s only one Go director left. There are a couple of senior managers there, but most of them are gone now. The call centre was closed after they said that nobody would lose their jobs. Huge turnover in cabin crew, probably 70-80%. Pilots are not in the sort of career where they say ‘I’m out of here’. But I’ve gotten a lot of emails from people who would like to move on and do other things if they can. So from easyJet’s perspective I don’t think they’ve made pots of money since then. Whether that would have happened without the deal, I don’t know. One of the things in the business is that airline mergers don’t work.

You can read the second part of our exclusive interview with Barbara Cassani here, where she talks about how to discount successfully, her future plans, and why you’ve got to be ready to walk away.

To buy Barbara Cassani’s new book ‘Go: An Airline Adventure’ click here

They didn’t show much courage and they didn’t show very much belief in what they were doing. They were chicken!

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