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September 05, 2013

New DFW Airport CEO talks about challenges facing the 39-year-old airport

DFW Airport CEO Sean Donohue first interview 5Virgin Australia executive Sean Donohue made his first appearance at a Dallas/Fort Worth Airport board meeting on Thursday, a month before he is slated to take on the chief executive position at the airport.

Donohue, who was named in July to replace retiring CEO Jeff Fegan, said he is looking forward to working at a well-run airport with an international reputation and plans to start his new job in October.

During the board meeting, he heard presentations on possible cost over-runs in the airport’s $2.3 billion terminal redevelopment project and the airport’s growth in international passengers which is up 11 percent in July. Afterwards he sat down with the media to discuss his experience as an airline executive at United Airlines and Virgin Australia and his goals as the new CEO of the airport.

On why he took the job at DFW Airport: “This is a great airport. It’s got a worldwide reputation for being one of the best run airports. After it was announced in Australia I had a gentleman who had just joined Virgin Australia that had worked for Qantas and had negotiated the deal when Qantas came here to fly and his comment was that the negotiations and everything to do with Dallas Fort Worth Airport was one of the best run negotiations he’s been through. So it’s got a great reputation. It’s got a great team and obviously a very strong future and I’m very very happy to be able to replace Jeff who has been one of the most successful CEOs in running airports.”

On challenges he faces in his new position: “Obviously there is a lot of good momentum so continuing that momentum. Getting to be visible out in the community Dallas Fort Worth Airport is obviously a huge economic engine for the community and I want to make sure I’m visible in the community and continue all the programs to support the community. Specifically, TRIP is obviously a priority. Very very important project for the airport. Going to provide tremendous benefits for the customers and for the airlines and making sure that program stays on track and continues to deliver the benefits that have been identified.”

On using his airline executive experience to run an airport: “There is a tremendous amount of integration. Most of my career has been out in the field at airports, I’ve been at airports in Chicago, and Boston, and Washington and Denver and all the major airports in Australia so you really get a sense of how an airport runs and get a sense for those airports that are well run and maybe those that aren’t as well run and you get a sense from being a customer and I think that holistic view is something I can bring to the table and DFW has a great passion for the customer experience but having seen both sides of that will add value.”

On focusing on international growth: “As you saw in the presentation this morning, international growth has been very strong. Having lived in Australia for the past three years obviously Australia participates a lot in the Asia growth and Virgin Australia has also been participating quite a bit in the Middle Eastern growth, those two areas of the world are some of the fastest growing parts of the world. Obviously Asia and the Pacific is a top priority because of the growth specifically China and obviously the airport has been working hard on that making a lot of progress and I would see that progress continuing. Having lived outside the country and just seeing first hand when you go up into those countries the pace and the acceleration of growth and the future planning that’s on the books obviously that’s where the focus will continue to be.”

On the American Airlines-US Airways merger: “My view is it’s a pro-competitive merger. United and Continental have been allowed to merge. Delta and Northwest have been allowed to merge. I think it makes good sense. I think obviously it would be a benefit for Dallas Fort Worht and north Texas but I would also say that American is a very strong airline no matter what happens. They’ve gone through as they say in Australia, the hard yards and they are astrong airline and my opinion is it would be best if the merger goes through but that’s to be decidd and American either way is a very strong airline and it’s great to have them as our key partner at DFW.”

On whether or not he has met with American or US Airways executives: “No. Today I’m still employed by Virgin Australia so excited to be here next month but I don’t think it would be appropriate to do that until I’ve officially started.”

On the low-cost carrier, Ted, that he started for United Airlines but was shut down in 2008: “My view is a little bit different. During the time that Ted was implemented and formed at United was during the bankruptcy and was actually quite successful. And it was quite successful financially and that was during the '04 to '07 period, it was profitable. And equally important during that time when you’re in bankruptcy, it’s really important to have points of success in the business and certainly Ted was successful and I give the credit to the employees. The employees did a fantastic job with Ted. Now eventually Ted was shut down and it was primarily driven by the fact that United decided to ground their entire 737 fleet and they took nearly 100 airplanes out of mainline and therefore they needed the A320s that were in Ted to go back into the mainline and that was the strategic decision that was made. So what I learned from Ted and it reinforced a lot of my leadership beliefs that I’ve had in my career is being visible and engaging with your front line employees and making sure they understand what you’re trying to achieve and make sure they have good alignment. You give your employees the tools to be successful and they will be successful and that’s what I remember the most about Ted. The employees did a great job.”

On potential cost over-runs in the $2.3 billion terminal redevelopment project at the airport: “My view on hearing the briefing this morning was the planning has been very solid. Obviously in the last four years since the initial program was put together there’s been a lot of market changes, there have been other impacts to the program. What I was most impressed about this morning was the transparency. It was very thorough briefing. They laid everything out there. They had a lot of details. I thought the team did a very good job and as I said being very transparent with the board and saying this is where we stand, this is the latest, and most importantly this its the plan moving forward. You know when you get into massive projects like this having that type of transparency I think is absolutely critical.”

On what he plans to do differently from retiring CEO Jeff Fegan: “I don’t think I have any plans to come in here…I’m not coming in here to be a change agent. Again as you said it’s been very stable. It’s been successful. I view it as a new set of eyes. And anytime you have a leadership change I think it’s good to have a new set of eyes. Doesn’t’ mean that everything I see is going to be good or bad it’s just a different perspective, a different lens. And I’m a really really strong believer in the customer experience. And having been part of the Virgin brand for the last three years, I’ve learned a lot on just how critical it is to put the customer first and ensure their experience is as good as it can be, so that would be my focus. I feel very fortunate that I’m coming in to such a stable successful business and I think that affords me the ability to step back and take a fresh look at things.”

On his experience as a customer at DFW: “My experience in the few times I’ve been through DFW because being with United you typically don’t come down to Dallas Fort Worth very often, is very efficient. To be able to get around the terminal so easily and efficient I think is positive. I give credit to the vision of the airport in terms of from gate to curb is what a couple hundred feet? You don’t see that in many airports throughout the world. The people as I travel through the airport are extraordinarily friendly and helpful. Having said that I think TRIP is absolutely critical because there is no question there are parts of the terminals that need to be updated and refreshed. It works well, it works efficiently, it is very competitive from a per passenger cost base and I think TRIP is going to take it to the next level in terms of the customer experience.”

On what distinguishes poorly-run airports from well-run airports: “What you see or what I see is employees who are disengaged, apathy when you go through and that could be from people you interact with in the parking garage or wherever. I focus a lot on the cleanliness of an airport and I think DFW does a good job there. And cleanliness isn’t just picking up pieces of paper, it’s the condition as well. Also given that I have a bit of an operational focus, I look at a lot of things from a safety perspective. I look out on the ramp and I look at all the different vehicle traffic and make sure people aren’t speeding. I haven’t seen that at DFW so it’s the whole picture. It’s how the airlines interact and engage with the airport when that’s healthy that’s typically a good sign as well. Those are the leading indicators I look at.”

On the Wright Amendment restrictions which end in 2014: “I’m familiar with the Wright Amendment, I know in 2014 most of the restrictions come off, you would know better in terms of what that opens up in the specific markets. I view that more as an airline adjustment or an airline competitive decision that needs to be made. Again when I look at DFW and I look at the markets served, not only the markets, but the breadth of service in the markets, when the Wright Amendment comes off it gets more competition and competition is good. I’m pro-competition. But at the end of the day it’s going to be the airlines that make the decision on what the true impact will be and I don’t see it having a negative impact on DFW in terms of service.”

-Andrea Ahles


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