JAMES HOGAN, FELLOW TRAVELLER
James Hogan, fellow traveller - Luxury Travel Magazine
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Chairman’s lounge - James Hogan, fellow traveller | |||||
| By: John O’Neill, Issue 44 – Spring 2010 | |||||
| (Etihad, James Hogan) | |||||
| HE’S NOT A HOUSEHOLD NAME IN AUSTRALIA, BUT FOR ALMOST 10 YEARS MELBOURNIAN JAMES HOGAN HAS BEEN RUNNING AIRLINES IN THE MIDDLE EAST CONNECTING AUSTRALIANS TO LUXURY DESTINATIONS ACROSS THE WORLD. Somewhere during his career, after his start at the Ansett Airlines check-in desk at Melbourne Airport in 1975 and later working in car rentals and hotels, James Hogan decided the airline business was not so much about travel as it was about hospitality. “We don’t compare ourselves with other airlines, we look at five-star hotels,” Hogan says in response to a question asking how, under his leadership, Etihad defines its premium segment. Hogan says he is seeking to create an experience built around “the guest’s schedule”. “Look at our First Class experience from Sydney to London,” Hogan says. “From our focus on the cabin itself - on comfort, design, the in-flight entertainment - to the way that we’ve trained our crew including having food and beverage managers to give service; to the transfer experience in Abu Dhabi which is unique: the Six Senses spa, the cigar lounge, the restaurant, the dedicated staff ... all the touch points are about hospitality, about service.” Hogan was appointed chief executive of the United Arab Emirates’ national carrier, Etihad Airways in October 2006 after successfully reducing the losses over the previous four years as CEO of struggling Gulf Airways. Part of his success at Gulf Airways included introducing on-board chefs (taken a step further at Etihad with the introduction of food and beverage managers) and “Sky Nannies”. “Now that was about adding value to the customer, creating ‘talkability’ within the press,” Hogan explains. “It was about doing something different but using our existing cabin crew. It wasn’t additional crew members. We created a service for families which had huge value by training existing cabin crew who were either ex-teachers or nurses or child carers.” Etihad was established in 2003 and, as at July this year, operated a fleet of 54 aircraft with forward orders for up to 205 more planes. It’s fast growth but to put that in context, America’s Delta Air Lines has the world’s largest fleet comprising nearly 1,000 machines. Hogan took over as CEO in 2006 and has regularly stated since that Etihad does not aim to be the biggest airline in the world, but the best in every class. “We’ve gone from number 52 in the world in the Skytrax World Airline Awards in 2006 to number six this year,” he says. Skytrax are passenger awards based on a 10-month survey of more than 17.9 million air travellers. As well as ranking ahead of Qantas (at number seven) and Emirates (at number eight) overall, Etihad was recognised in the 2010 awards as having the Best First Class of any airline in the world, with Singapore coming in second in that category and Qantas coming in third. “We’re a bit different to Qantas,” Hogan says. “We offer air to 65 cities, we’re a truly global airline and we spend a considerable amount of time looking at high-end buyer behaviour and working out how we can get more business out of the segment because at the end of the day it’s the quality of the yield.” In August 2010, Etihad made news in Australia with the announcement, subject to regulatory approval, of a tie-up with Virgin Blue engineered between Hogan and new Virgin Blue CEO (and Qantas renegade) John Borghetti. Hogan says this will be good for premium travellers who would be able to redeem Virgin Blue frequent flyers points with Etihad. “The importance of deals such as the one with Virgin is that premium travel is where we were being impacted [by the Global Economic Crisis],” he explains. “Part of the mix for luxury travel is the frequent flyer programs and redemption of points and what you can do to burn them.” This goes to a larger dilemma for most long-haul carriers that have had to grapple with a collapse in demand for first and business class which consumes real estate that could be used for in-demand economy or premium economy seating. The president of Emirates Airline, Tim Clark, recently described his response to the Global Economic Crisis on the front of their planes: “When the premium business started to disappear on our European or Asian routes, it wasn’t the volumes that disappeared. When we said we’ll give you a 30 per cent discount, they grabbed it ... it was a question of staying with the market.” Hogan concedes: “As you know, this is a cyclical business. Post the crisis our business cabin is back, our first class yields are back but the penetration isn’t where we’d like it to be, but that will come.” Etihad was forecast to break even this year, but he has been circumspect about whether that will occur. He says his focus is on further building the airline’s brand and innovating around service. “I think what people forget is that we are only six and a half years old.” Before the financial crisis, Hogan was quoted talking about the possibility of the airline investing in hotels just as Emirates (which he calls “that airline”) has done with its Wolgan Valley resort outside Sydney and its Al Maha resort outside Dubai. Now he has a different (and less expensive) focus – to cross-sell Abu Dhabi as a premium destination to top-end travellers. “We’ve just had the Fairmont open up, we have the Shangri La and we have the world’s premier hotel in the Emirates Palace, which is an actual palace. “If you look at what’s coming to Abu Dhabi with the Louvre opening up, with the Guggenheim Museum, the Sorbonne campus, NYU campus ... look at the retail developments, the luxury property developments, Abu Dhabi is certainly going to be a premium destination.” In the meantime, the brand building continues through sport and arts sponsorships including premium tie-ins. “From a segmentation point of view, if you look at the people who follow Ferrari, maybe support Harlequins [rugby] in London, that’s at the top end ... If you go to our website you will see deals and competitions to use our box at Manchester City, go to F1 races. If you go to the F1 race here in Abu Dhabi you’ll see our hospitality area decked out as our lounge, so we certainly bring the brand into the partnerships.” Hogan’s plans focus on short-term opportunities and long-term trends out to the year 2030. “Europe’s getting older and once they get their pensions back in shape that market will be very important to us, as is the Australian retirement market. “But there are markets like India, where there are 300 million middle class, which present a huge opportunity for us. It’s China, the Indian sub continent, the Middle East where there are very savvy, high-end consumers ... the next generation of middle class consumers who are into brand and into service and we’re focusing very much on that next horizon.” *John O’Neill is Chairman of Luxury Travel Magazine’s Advisory Board, a director of Surfing NSW and Managing Director of digital marketing agency Komosion. James Hogan includes in his marketing efforts at Etihad a focus on cross-selling the fast evolving, cosmopolitan city of Abu Dhabi as a premium destination to top-end travellers with the help of these new developments: | |||||
| GUGGENHEIM ABU DHABI | |||||
| The Guggenheim Abu Dhabi, designed by internationally renowned American architect Frank Gehry, is currently under development. The new 450,000 square foot museum will feature a permanent-collection; changing exhibitions and a centre for contemporary Arab, Islamic, and Middle Eastern culture. | |||||
| THE LOUVRE ABU-DHABI | |||||
| The Louvre Abu-Dhabi is scheduled to open in 2013 and has acquired the rights to the Louvre name for 30 years. Works from French museums will be loaned for a 10 year period. The Louvre Abu Dhabi project grew out of the wish to share France’s cultural heritage with the Emirate of Abu Dhabi. | |||||
| SHANGRI-LA HOTEL | |||||
| Shangri-La Hotel, Qaryat Al Beri, Abu Dhabi includes 161 fully furnished Shangri-La residences and six luxurious private villas. The hotel exemplifies luxurious hospitality with the one-kilometre beachfront setting, five outdoor swimming pools and award winning Vietnamese, French and Chinese cuisine in elegantly designed dining rooms. Deluxe rooms start from A$250 twin share. | |||||
| FAIRMONT BAB AL BAHR | |||||
| Fairmont Bab Al Bahr is an elegant beachfront business hotel with 369 guestrooms and suites. It has a variety of world-class restaurants and state-of-the-art conference facilities. Rooms start from A$287 tw | |||||
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