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AB Hunold Resigns  
User currently onlinePanHAM From Germany, joined May 2005, 9161 posts, RR: 29
Posted (2 years 11 months 2 weeks 20 hours ago) and read 7156 times:

Just came over the radio Air Berlin CEO Achim Hunold resigns and names former deutsche Bahn CEO Mehdorn as a possible successor.
Mehdorn would be an excellent choice. Will be interesting to watch this emerging story.


E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
37 replies: All unread, showing first 25:
 
User currently offlinedazeflight From Germany, joined Jun 1999, 580 posts, RR: 2
Reply 1, posted (2 years 11 months 2 weeks 20 hours ago) and read 7134 times:

Mehdorn has particular strengths in alienating customers and employees, as he has shown at DB. Luckily he's only been proposed a temporary successor. In any case this should be a good day for AB, it was about time Hunold and opens possibilities to put AB back on the track.

User currently offlineRonaldo747 From United States of America, joined Feb 2009, 373 posts, RR: 0
Reply 2, posted (2 years 11 months 2 weeks 20 hours ago) and read 7117 times:

Quoting PanHAM (Thread starter):
Mehdorn would be an excellent choice

Disagree. It's neither a bad choice nor an excellent choice (see the condition of the Bahn after his demission. Apparently he's only a transition CEO according to the press.

AB might be a takeover candidate ... (for IAG Group?)


User currently onlinekiwiandrew From New Zealand, joined Jun 2005, 8544 posts, RR: 13
Reply 3, posted (2 years 11 months 2 weeks 20 hours ago) and read 7105 times:
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This seems to be coupled on FlightGlobal with another AB story


http://www.flightglobal.com/articles...lash-routes-in-major-shake-up.html


...Air Berlin is to implement a wide-ranging cost reduction plan that will see it cut eight aircraft from its fleet, cancel a number of routes and partially withdraw from regional airports, in a bid to return to profitability....


http://www.flightglobal.com/articles...r-berlin-ceo-hunold-to-resign.html

...Hunold intends to end his tenure as chief executive on 1 September, but said he wishes to remain a non-executive director at the airline....

[Edited 2011-08-18 02:49:52]


Moderation in all things ... including moderation ;-)
User currently offlineCaptainCrackers From New Zealand, joined May 2010, 127 posts, RR: 1
Reply 4, posted (2 years 11 months 2 weeks 20 hours ago) and read 7052 times:

I really wonder whether BA/IB have the cash to acquire AB. But it certainly is suspicious that Mehdorn is being touted as a temporary CEO only. Perhaps Hunold can bear to see his baby be sold, but wasn't prepared to handle the sale himself? Exciting times for some.

User currently onlinePanHAM From Germany, joined May 2005, 9161 posts, RR: 29
Reply 5, posted (2 years 11 months 2 weeks 20 hours ago) and read 7032 times:

Well, Mehdorn has left Deutsche Bahn in an excellent condition. The company makes money in all sections, long distance passenger trains, urban passenger services and cargo. The transition from the old State Authority where passengers were subjects who had to obey the authoritarian conductor (similar to what they are now on US airlines) to customers has worked. You cannot hold a manager responsible for an inadequate infrastructure when that does not fall under his responsibility.

Mehdorn is the right man to put AB back on track and make it profitable. Only then will the company be a potential take over candidate.

BTW, a CEO is not running for popularity and workers are not promised rose gardens. A CEO's main responsibility is to run a company profitable because only then the jobs are secure and the company can sustain. It has been discussed here many times that Hiunold made more than a good number of mistakes. Be that correct or not, the most recent and disappointing figures have made that decision inevitable.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlinedazeflight From Germany, joined Jun 1999, 580 posts, RR: 2
Reply 6, posted (2 years 11 months 2 weeks 20 hours ago) and read 6944 times:

The fact that the S-Bahn Berlin was put into such a shape by Mehdorn's cost-cutting regime that it is not working at full ordered capacity since two years and now has to spend hundreds of million of Euro's to make up for the neglection which generated those great financial number's during his reign is pretty revealing. DB-customers did not have a choice to choose a different company when he made one of his management errors, the flying public will. So, while he may be good for great financial numbers, he clearly lacks the empathy to understand what his customer's want. An excellent choice for a CEO should be able to do both.

[Edited 2011-08-18 03:23:15]

User currently offlineCaptainCrackers From New Zealand, joined May 2010, 127 posts, RR: 1
Reply 7, posted (2 years 11 months 2 weeks 19 hours ago) and read 6900 times:

Quoting PanHAM (Reply 5):
You cannot hold a manager responsible for an inadequate infrastructure when that does not fall under his responsibility.

Haha, you're referring to Mehdorn and yet I'm pretty sure that's what Hunold's fans say about Hunold.

It is highly debatable whether Mehdorn did as great a job at Deutsche Bahn as you claim. Small profits were made at the expense of safety, huge debt run up and still outstanding, budget overruns left, right, and centre, public money being wasted because corners were cut, and just in the past few days a survey that showed something like 70% of Deutsche Bahn staff with no faith in the management structures Mehdorn built. I also recall something about an IPO scheduled for 2004 that still hasn't happened. The question is whether any manager could have done any better at a company of that size and complexity. But then, the same applies to Hunold, and the same will apply to whoever now replaces him at AB.

Quoting PanHAM (Reply 5):
Mehdorn is the right man to put AB back on track and make it profitable. Only then will the company be a potential take over candidate.

I'm not so sure that AB isn't a takeover candidate already. It has had such a mixed bag of priorities over the course of its growth and it should be fairly obvious that with the realignment of those priorities planned for the near future, it'd be the perfect tool for a bigger airline to counteract LH throughout Europe.

Quoting dazeflight (Reply 6):
So, while he may be good for great financial numbers, he clearly lacks the empathy to understand what his customer's want. An excellent choice for a CEO should be able to do both

+1

[Edited 2011-08-18 03:35:20]

User currently onlinePanHAM From Germany, joined May 2005, 9161 posts, RR: 29
Reply 8, posted (2 years 11 months 2 weeks 19 hours ago) and read 6828 times:

Quoting dazeflight (Reply 6):
may be good for great financial numbers, he clearly lacks the empathy to understand what his customer's want. An excellent choice for a CEO should be able to do both.

I do not know if you use the railways but as a regular passenger and holder of a Bahncard50 I can tell you that the service greatly improved over the past years. Regarding your quote about the s-bahn, you obviously do not understand how DB AG operates since it was transformed from a an authority to a PLC (AG). Since then DB AG is a service provider who sells the services to the various states by participating in public tenders. The S-Bahn in Berlin is run on behalt of the state of Berlin by DB AG and according to the conditions lined out in the tender. DB can only provide what Berlin pays for. Simple as that.

Now., luckily, airlines are far from that and they have to be sustainable on their own. Obvisouly, when such a strong personality like Hunold throws the towel they must be in worse shape than they tell. Mehdorn has shown several times that he can turn situations like that.

Quoting CaptainCrackers (Reply 7):
I'm not so sure that AB isn't a takeover candidate already.

You seriously think that the major owners sell before the bride is beautified? Same goes for potential buyers, they could get a majority relatively cheap but they would have to make an announcement to the market and shares would go up immediately. Over half of the shares are free float and that wold make it quite expensive for the new owner.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineCaptainCrackers From New Zealand, joined May 2010, 127 posts, RR: 1
Reply 9, posted (2 years 11 months 2 weeks 19 hours ago) and read 6772 times:

Quoting PanHAM (Reply 8):
You seriously think that the major owners sell before the bride is beautified?

Yeah. I think it's going to take an outsider to beautify the bride, and I wonder whether Hunold has realized this and that's why he's stepped down.


User currently offlineCaptainCrackers From New Zealand, joined May 2010, 127 posts, RR: 1
Reply 10, posted (2 years 11 months 2 weeks 19 hours ago) and read 6772 times:

All wildly speculative of course...

User currently offlineRara From Germany, joined Jan 2007, 2057 posts, RR: 2
Reply 11, posted (2 years 11 months 2 weeks 18 hours ago) and read 6659 times:

I believe Mehdorn is a fine manager. His task at Deutsche Bahn was to make the company profitable so that the government could privatize it, and that's what he did. It's not his fault that political priorities changed during that time.

But it's true that he isn't really known for empathy. Will be interesting to see whether he can create a good customer experience and continue AB's way towards a full-service airline.



Samson was a biblical tough guy, but his dad Samsonite was even more of a hard case.
User currently offline328JET From , joined Dec 1969, posts, RR:
Reply 12, posted (2 years 11 months 2 weeks 18 hours ago) and read 6511 times:

That is the best news about german aviation since ten years in my eyes.

It was about time for him to leave a very long time, but he did not realize...


Good news for AB and rest of the german market.


 


User currently offliner2rho From Germany, joined Feb 2007, 2578 posts, RR: 1
Reply 13, posted (2 years 11 months 2 weeks 17 hours ago) and read 6431 times:

Quoting kiwiandrew (Reply 3):
...Air Berlin is to implement a wide-ranging cost reduction plan that will see it cut eight aircraft from its fleet, cancel a number of routes and partially withdraw from regional airports, in a bid to return to profitability....

Indeed, I think it is interesting to view the resigning and the announced restructuring together. AB will be slasinhg capacity by 1 million seats, remove 8 a/c (I assume sohrt-haul?), and cancel numerous routes. It looks like AB will stop its point-to-point regional flying to re-trench into its hubs. Hunold also very openly criticises the new departure tax introduced this year, which has cost them 45 million in Q2.

IMO however, their problems go far beyond the (certainly harmful) departure tax. They have expanded too fast, have an undefined product in between low-cost leisure and full-service, and have probably tried to enter too many markets at once. Furthermore, for the regional flying they didn't have the right equipment - more Q400's or some RJ's would have been better than so many A32x. The restructuring will be painful and it will be a shame to see them go for certain markets, on the other hand AB cannot continue to lose money forever....


User currently offlineSchorschNG From Germany, joined Sep 2010, 500 posts, RR: 0
Reply 14, posted (2 years 11 months 2 weeks 17 hours ago) and read 6331 times:

I think Mehdorn is a good choice as "interim CEO". He has a good stand as manager of difficult situations. Nobody claims he did everything right at Deutsche Bahn, but probably he did more good than bad in a "company" that was heading towards a dead end fast.
The role as "interim" allows him some unpopular decisions. Also, he is nearly 69 years old, so another year is probably enough before concentrating solely on his golf handicap.

For LH, with Mehdorn taking the hat at BA, the competition will just as strong.

Some people may have forgotten: Mehdorn was Airbus executive back in the pre-EADS days until the mid 1990ies. He managed to change the loss-making command-economy style MBB into a profit-making company, enabling the success of Airbus in the coming years. He has lots of experience in running a company in trouble in a politically difficult situation.
Besides that, he has excellent political connections, much better than anyone at Lufthansa.



From a structural standpoint, passengers are the worst possible payload. [Michael Chun-Yung Niu]
User currently offlineTobias2702 From Germany, joined Sep 2008, 718 posts, RR: 0
Reply 15, posted (2 years 11 months 2 weeks 17 hours ago) and read 6272 times:

Quoting kiwiandrew (Reply 3):

...Air Berlin is to implement a wide-ranging cost reduction plan that will see it cut eight aircraft from its fleet, cancel a number of routes and partially withdraw from regional airports, in a bid to return to profitability....

Indeed, here in detail:;

AB announces a fleet reduction of 8 aircraft and several route cuts, in order to concentrate on its hubs at TXL/BER, DUS, PMI and VIE, a program dubbed "Shape and Size". Less regional airports are to be served.


The following routes are to be terminated from Winter 2011/12:
from FRA: HAM, NAP
from STR: LED
from MUC: CAI
from DUS: ORY
from FMO: STN, GWT, VIE
from CGN: Nador, Tangier, Tunis, Valencia, INN, PMO, NAP
from HAJ: STN
from PMI: FKB, DRS, BSL (routes to be summer seasonal)
from PAD: STN, MAN
from Erfurt: all
+ Malaga, Alicate: scale back in frequencies/routes served during winter

source: http://www.airberlin.com/site/pressnews_dr.php?ID=3137&LANG=eng

--Tobias--

[Edited 2011-08-18 06:20:32]


PA, AF, UK, BA, AB, DL, LH, FR, BD, A3, EZY, DY //// A319/320/346, B733/735/73G/738/744/763, AT4, 146, CR2, DH4
User currently offlinesomething From United Kingdom, joined May 2011, 1633 posts, RR: 21
Reply 16, posted (2 years 11 months 2 weeks 16 hours ago) and read 6224 times:

Quoting Rara (Reply 11):
But it's true that he isn't really known for empathy. Will be interesting to see whether he can create a good customer experience and continue AB's way towards a full-service airline.

That's exactly the problem I see with Mehdorn. He would make a great fit for American Airlines, where service doesn't matter and it's just about shifting capital and assets. In Europe however, I am afraid he will ''downsize'' Air Berlin to what he thinks is a profitable company, overlook the market's needs and render Air Berlin an uncompetitive business doomed to fail.

In the airline business, it's really all about marketing. Knowing what the market asks for, what the customers want and winning customer's from the competition over to your business. The second step would be to find ways to lower your cost to offer the product your customers love you for at the lowest cost to your company, the third step would be to find max out your potential (cutting service whilst keeping customers, raising fares etc.)

I'm afraid Mehdorn would skip step 1, start with step 2 and ignore step 3. Of course you can cut all unprofitable routes and start charging for everything, reduce fleet size and cut salaries. But that wouldn't leave you with the profitable chunk of the company, it would drive your existing customers away to the competition. I doubt Mehdorn understands that.



..sick of it. -K. Pilkington.
User currently offlineRonaldo747 From United States of America, joined Feb 2009, 373 posts, RR: 0
Reply 17, posted (2 years 11 months 2 weeks 16 hours ago) and read 6148 times:

Quoting PanHAM (Reply 5):
Well, Mehdorn has left Deutsche Bahn in an excellent condition. The company makes money in all sections, long distance passenger trains, urban passenger services and cargo. The transition from the old State Authority where passengers were subjects who had to obey the authoritarian conductor (similar to what they are now on US airlines) to customers has worked. You cannot hold a manager responsible for an inadequate infrastructure when that does not fall under his responsibility.

Well, under his responsibility fell bad punctuality and nasty customer service .... two things that AB cannot afford!

However, it might be very bad news for Boeing. Mehdorn was CEO of Airbus Germany in the early 90s ....

[Edited 2011-08-18 07:15:28]

User currently offlineoneworld77 From United Kingdom, joined Sep 2008, 238 posts, RR: 0
Reply 18, posted (2 years 11 months 2 weeks 14 hours ago) and read 6001 times:

"Shape and Size".

Interesting - BA must have given them the 'Future Shape and Size' folder!!

This is the reshaping that it went through in the middle of the naughties and encompassed preparing the airline for T5 at LHR and reduced consistently delayed flights (not of BG magnitude, but 15 to 30 mins on 60% of flights in one year!) alongwith cutting out inefficiencies.

[Edited 2011-08-18 08:40:58]


Flown - EI;BA;RE;FR;WW;TW;TS;US;JP;JT;AT;QF;JQ;VB;NC;TR;D7;AA;IB;AF;SN;LX;SR;LH;AY;CX;CP;9K;9W;IX;AI;IC;EK;EY;GF;QR;BE;N
User currently onlinePanHAM From Germany, joined May 2005, 9161 posts, RR: 29
Reply 19, posted (2 years 11 months 2 weeks 14 hours ago) and read 5943 times:

Quoting Ronaldo747 (Reply 17):
Well, under his responsibility fell bad punctuality and nasty customer service .... two things that AB cannot afford!

simply not true. The service on long distance ICE trains is much better than it was before his time. That goes for 2nd class as well as for 1st class. I know nasty custonmer service from the old Bundesbahn days but not DB AG. He introduced an airline style loyalty scheme and many more. You cannot hold a CEO responsible for inadequate infrastructure or people killing themselves walking in front of a train which delays 2 hrs. Neither falls under hois responsibility.

The re-structuring of AB has begun already, they focus, it seems, on their hibs. That makes only sense. Going head on with LH on a spoke to spoke route like FRA/HAM is crazy. That's burning money, nothing else.

Quoting Ronaldo747 (Reply 17):
However, it might be very bad news for Boeing. Mehdorn was CEO of Airbus Germany in the early 90s ....

...and you think because that he buys Airbus?   I think that Boeing will not be hurt. First because managers don't buy assets because of fond feelings but because the assets must make money and second, Mehdorn will be interim, I do not think that he will get much involved in such matters, which have to be firmed by the board anyhow.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineJoost From Netherlands, joined Apr 2005, 3164 posts, RR: 4
Reply 20, posted (2 years 11 months 1 week 6 days 22 hours ago) and read 3541 times:

Quoting Tobias2702 (Reply 15):
from FMO: STN, GWT, VIE

The cancellation of STN and VIE leaves FMO with solely domestic and vacation destinations.

Flights to major international cities or hubs haven't been overly successful from FMO.

AF: CDG-FMO, start 2008, end 2009
EA: AMS-FMO, start 2006, end 2007 (demise of EA)
AB: Tried and cancelled FMO and TXL in 2010, now STN and VIE in 2011
QW (BlueWings): Flew FMO-SVO, company folded in 2010
X3: Flew FMO-VCE, cancelled in 2008

I wonder what the future will bring for FMO. It has a good catchment area, but of course competition is fierce: DTM, BRE, HAJ, DUS; they're all within a 90 minutes drive.

Quoting Tobias2702 (Reply 15):

from FMO: STN
from PAD: STN
from HAJ: STN, MAN

This also means the complete withdrawl from AB from STN and MAN. I noticed that on their website, LGW is now listed as "London" (iso London - Gatwick). I wonder if they'll launch more new LGW services, especially since their OneWorld future. They are late, however, when it comes to DUS-LGW, which should have been one of their prime London-routes. Now U2 has a double-daily service and this makes a launch way more difficult.


User currently offlineInsideMan From Vatican City, joined Aug 2011, 213 posts, RR: 0
Reply 21, posted (2 years 11 months 1 week 6 days 22 hours ago) and read 3502 times:

Quoting Ronaldo747 (Reply 17):

However, it might be very bad news for Boeing. Mehdorn was CEO of Airbus Germany in the early 90s ....

and quite involved in the decision to launch the A320

Quoting PanHAM (Reply 19):
...and you think because that he buys Airbus? I think that Boeing will not be hurt. First because managers don't buy assets because of fond feelings but because the assets must make money and second, Mehdorn will be interim, I do not think that he will get much involved in such matters, which have to be firmed by the board anyhow.

I know at least one Airline CEO who is a former Airbus employee and one condition for him was, that this airline would never again aqcuire anything Boeing builds. Not saying it is the case here, but it does happen elsewhere...


User currently offlineLAXintl From United States of America, joined May 2000, 24847 posts, RR: 46
Reply 22, posted (2 years 11 months 1 week 6 days 22 hours ago) and read 3482 times:

It seems to me the casual observer on this side of the Atlantic after having previous had many years of business dealings with LTU, that today's Air Berlin is a carrier that is rather confused.

Is Air Berlin;
a) European LCC
b) Leisure/holiday operator
c) Alternate German long-haul carrier
d) A network carrier fitting the Oneworld alliance

Seems to be Air Berlin is trying to do all, but failing at the moment. Seemingly Air Berlin could do anyone of the above potentially quite well individually, however in combination the diversified operation, network, product and fleet is simply causing too much complication and expense.



From the desert to the sea, to all of Southern California
User currently offlineJoost From Netherlands, joined Apr 2005, 3164 posts, RR: 4
Reply 23, posted (2 years 11 months 1 week 6 days 21 hours ago) and read 3397 times:

Quoting Ronaldo747 (Reply 17):
However, it might be very bad news for Boeing. Mehdorn was CEO of Airbus Germany in the early 90s

It can also work out the other way: the shareholders' meeting can be very alerted whenever Mehdorn presents a plan to acquire Airbus aircraft. Shareholders might very well demand the CEO to demonstrate that any Airbus order is indeed best for the Shareholders, and not based on personal preferences.

Quoting LAXintl (Reply 22):
It seems to me the casual observer on this side of the Atlantic after having previous had many years of business dealings with LTU, that today's Air Berlin is a carrier that is rather confused.

Indeed, AB seems to be a bit of the old Air Berlin, the old LTU and the old DBA.


User currently onlinePanHAM From Germany, joined May 2005, 9161 posts, RR: 29
Reply 24, posted (2 years 11 months 1 week 6 days 21 hours ago) and read 3397 times:

Well, there are other airlines that have such a diversity. Evenm LCCs charter their aircraft to tour operators, so that is not unheard of. LH does that. All airlines today are - if not low cost carriers - low fare carriers, filling up seats that otherwise would fly empty. The long haul division is LTU and still runs under that company for traffic rights reasons.

The real problem with AB was / is that they tried to go against LH head on in too many ways. Their hub in BER is rather unchallenged since the traffic mix there is not what LH wpould need. PMI same story, AB has build up an excellent hub there with all the Germans commuting between the homeland and "their" island. That's a good base to build on. DUS is challenged by LH but with the traffic base there it should be alright for both. VIE is running out of competition with Niki as a strong partner.

They could have saved a lot of money if they hadn't operated that many spoke to spoke routes and going head-on with LH on FRA/HAM was simply stupid. They burned too much money outisde their real domains, especially here in FRA.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
25 dazeflight : Berlin paid for a certain standard of services, including carriage size, frequency of services and so on. These standards are not followed by since t
26 something : Exactly. They should have focussed on their core business and spent more attention on creating their own hubs, establishing their own feeder network.
27 Burkhard : I usually follow your arguments, but you must live in another part of this globe than I do ( I assume we live not more than 50 km apart). I myself us
28 r2rho : Your analysis is quite accurate despite the geographical distance. Indeed, they have been trying to do too many different things at the same time, bu
29 PanHAM : not wanting to get too much off topic, but that is the job of each CEO. Don't forget, the company is priavtely run but belongs 100% to the Federal Re
30 CaptainCrackers : This is just laughable. DB had the cash to pay a dividend because it took public money but didn't provide the service. If DB had had non-governmental
31 PanHAM : Well, we don't have $ here, legal tender is the €, but I agree with you, LTU would be worth one € if sold to Aeroflot, because a foreign carrier
32 CaptainCrackers : It seems the powers of metaphor are lost on some. My point remains that many, myself included, think that Mehdorn will throw the baby out with the bat
33 Humberside : Not seen anything to say DUS-STN is going
34 PanHAM : Could be that your metaphor is without any power, thought about that? Mehdorn left DB in a much better shape than it was when he took the helm. Again
35 tolmachevo : As a Bahncard 100 holder, I can tell you that approx 30% of my annual price is refunded in ''compensation" for delays of at least one hour... The ser
36 Post contains images 328JET : Hmm, i did not think about it, but it might be true. But also, we will see a very interesting competition between LH and AB now... The reason? Mr. Fr
37 ju068 : Does anyone know what aircraft are going to be parked? 737s?
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