Interview by Michael Shapiro and Julia Steele
photos by Dana Edmunds and Mark Dunkerley
Mark Dunkerley is a world traveler. Born of British parents in Latin America, he grew up in Africa, Europe and the United States. His passion for flight and flying emerged when he was young and has stayed with him ever since. Today, in addition to leading a major airline, Dunkerley is a celebrated aerobatics flyer. Here, he sits down to talk about all things aeronautic.
How did you get into the airline industry? What drew you to it?
I was attracted to the notion of travel. I was born in Latin America, lived in Africa, in Europe and in the United States. And so I thought that in my professional life I would want to be associated with travel. Also I became passionate about flight and flying, and that’s an interest that has stayed with me ever since my formative years.
What about flying made you develop a passion for it?
Well, it’s an extraordinary thing. There isn’t a day goes by when I don’t see a 747 taking off from one of these runways and marvel. It’s simply not possible that something as heavy as that can be lifted off the ground in a controlled way and several hours later deposit customers half the world away. To this day, even in a world where we’ve become somewhat blasé about extraordinary technological achievements, there’s something unbelievable about manned flight. I fly aerobatics, which is one form of flight, and transporting people half the world away is another.
Why did you join Hawaiian Airlines?
Prior to coming to Hawaiian I had built my resume around being a “company doctor,” the sort of person who comes into a company that’s not doing well and looks to see what can be done to turn around its financial, commercial and operational fortunes. At the time Hawaiian was in need of someone with my sort of background and for my part, it seemed like a great opportunity to join a company that could have a great future. Joining Hawaiian has turned out to be the best personal and professional decision I could have made, as I work today with a terrific, terrific group of people and at a fantastic company. For me it’s a privilege to be associated with it. So much of what’s special about Hawaii is what’s so special about the people who comprise our company.
How does your background—coming from the United Kingdom, growing up around the world—influence the way that you run Hawaiian?
I’ve had the great good fortune to live and work and be in different places and experience different cultures and backgrounds. Hopefully, it makes me more open and more flexible to working in different environments, more adaptable perhaps to the things that drive different cultures. Of course, this is something that’s very difficult to judge oneself, you really need to ask others.
Last April, the Honolulu Star-Bulletin ran a story on you in which Hawaiian Chairman Lawrence Hershfield said, “In a year when record fuel prices and the onset of a recession led to large losses at most airlines … senior management made the right decisions and Hawaiian ended the year stronger than it started.” What were some of those “right decisions”?
The airline business is very volatile and very competitive. The margins are razor thin and things can get bad very quickly and they can get very bad very, very quickly. And because it has those characteristics, there’s a tremendous tendency—a kind of centripetal force—that draws your attention to the crisis of the day. But if you spend your life absorbed by the crisis of the day, you miss the crucial opportunity to plan for a day when the whole world isn’t coming down around your shoulders. My observation of the industry in general is that the companies that tend to do well are those that always keep their eye on the future and have a sense of vision while they’re dealing with the crisis of the day. The airlines that fade away and even disappear tend to be those that become utterly absorbed by the constant crises that plague our industry and lose sight of the future.
As for the right decisions: I think the most important was getting more competitive in terms of our costs. Cost control alone isn’t enough and we’ve also focused on improving the way in which we are branded, improving our presence in the major markets, growing our business so that we’re less reliant on a few routes, diversifying our business increasingly into the international area with the addition of new routes, and the decision we’ve made—yet to be realized—for the addition of the Airbus aircraft which begin arriving next year. We started Sydney, Australia as a route while we were in bankruptcy. We started Manila in the Philippines one month after Aloha Airlines closed and in the face of rapidly rising oil prices. None of those moments seemed auspicious at the time, but you have to believe in your long-term vision and be prepared to invest in making it come true. At the same time that all of this has been happening, I’m pleased to say that we didn’t lose sight of one of the fundamentals of our business-customer service: Our employees have continued a long tradition of providing superior service to our customers. None of the things management needs to do to make a business thrive can happen if the employees delivering the customer service aren’t doing a good job. At Hawaiian, they do a great job.
In 2006, Hawaiian outsourced its reservations call center to the Philippines, a public relations blow for an airline that prides itself on its local credentials. How do you answer critics who felt the airline was not living up to its commitment to Hawaii?
I certainly remember at the time we announced the outsourcing of our call center to the Philippines, we got a lot of push-back from our employees and customers alike. Many pointed out that our then-major competitor in the Islands, Aloha Airlines, did not take this course of action.
The way I approach these things is relatively straightforward: Our commitment to the community and our employees is to be around. We’re not serving anybody’s interests if we disappear. For our employees we have an obligation to find ways to raise their standard of living and that means not only this year and next year but making sure that if they so choose they can see out their careers at Hawaiian. Similarly for the community: We are the intrastate highway system here, and for Hawaii to be able to go about its business and its citizens to enjoy life, we have got to be here. And often that means you have to make some pretty hard decisions in a business that is as competitive as ours. Outsourcing our call center to the Philippines helped reduce our costs and improve our flexibility in ways unavailable to us in the United States. This in turn improved our competitiveness and contributed to our ability to withstand the ravages of high fuel prices and now a recession. I can’t tell you how many people came up to me in the aftermath of Aloha’s collapse to tell me that they now understood why it’s important to make some of these difficult decisions.
The new Airbus planes will give Hawaiian the capacity to reach destinations on the East Coast, Asia, even Europe. How will you keep the company’s local character even as it goes global?
The character of our service is largely a reflection of our employees. We design certain elements of our service to reinforce the deep connections we have to Hawaii, but as I alluded to earlier, the real key is that our people embody the culture that makes Hawaii the most popular destination in the world. As we go increasingly global, one of the things you’re unlikely to see is us flying between points disassociated from Hawaii. We will actually be looking to take our existing model and simply spread it out further. So I think the Hawaiian-ness of what we do will remain every bit as strong as we grow because one foot will always be planted in Hawaii.
What destinations would you like to see Hawaiian service?
The profitable ones [laughter]. We’re clearly looking at both developed markets—Japan, increasingly Korea—and then a raft of developing markets, of which China is perhaps the largest potential market. The reason a place like China is “developing” as opposed to “developed” is partly economic but also largely has to do with visa rules and bilateral air services agreements and aspects of our industry that put up impediments to our access. But over time those impediments will come down, and it would be our hope to expand further into Asia. In addition, we are always ready and willing to fly to the East Coast—the issue with that, quite candidly, is that the economics of it are not particularly compelling. The fares are very, very low, and it’s hard for us to make that make economic sense. When we get the Airbus A-350s, which start arriving in 2017, they will be the most technologically advanced aircraft flying. They will have an extraordinary range bringing both Europe and the furthest reaches of Asia within reach.
Hawaiian consistently wins accolades for its service; in 2008 it was named the nation’s top airline in the Airline Quality Rating Report. You’ve said, “Our employees have made Hawaiian the best airline in America.” Can you be more specific?
For the vast majority of our customers, buying an airline ticket and paying for the accommodation to take a vacation in Hawaii is a substantial financial commitment. So, no matter how we might struggle as a company to make our own ends meet, it is vitally important that our customers are treated well. Our employees intuitively understand this, and I’m enormously proud of the job they do day in and day out, often in difficult circumstances. I can talk at length about this, but the reality is it’s in all of the transactions that take place. Almost all of them are unsupervised. You can’t dictate how a flight attendant is going to smile at a customer or deal with their issues of concern. You can’t monitor each and every time a customer service agent checks in a passenger. Good service comes about because employees want to provide good service. When I said a little earlier on that I’m privileged to work with the people at Hawaiian, in large part the reason I say that is because our employees understand the sacrifices people make to climb on a Hawaiian Airlines plane and they respond to that.
And you think that has to do with the culture and people in Hawaii?
I do. The Hawaii host culture is very difficult to define, but I think we all know it when we see it. I think it’s alive and well, and it’s something that needs to be burnished and protected.
What’s your favorite thing about flying on Hawaiian when you travel, when you’re just a passenger and not the CEO?
Well, it’s a bit hard for me to answer that one because I never really travel on Hawaiian just as a passenger. One of the things that’s important to me when I travel on Hawaiian is to spend most of the flight on my feet, talking to the crew, talking to our customers, gathering information and ideas and suggestions and hearing how people feel. So I’ve actually never simply sat on the airplane.
So you walk the aisles and introduce yourself to people?
Yeah, for the majority of the flight, I’m on my feet. And I love it. It’s one of the absolute favorite things I get to do, a real tonic.
When you talk to people on the planes, what do you hear?
Almost always the theme that comes out is how pleased people are to be on Hawaiian. Our employees really appreciate working at our company, and the customers, particularly those who are not used to traveling on Hawaiian, are always saying how it really feels different and how much they enjoy it. As I said earlier on, I’m a sort of company doctor and I’m used to going into situations where everybody’s down in the dumps, where the employees are fed up, where the customers are fed up because the employees are fed up and where it’s really hard to say, “I’m from the company. Tell me how you feel.” One of the great things about working at Hawaiian is that it’s almost always a pleasant conversation when you ask that question. And when you work at a place that people hold in high regard, you get a degree of personal fulfillment that is very important; it helps you get up in the morning.
Oil is a finite resource that is likely to become more scarce and expensive in the long run. Are there any discussions at the airline about long-term preparations for a post-oil industry? What are the short-term fuel-saving measures we’re likely to see? And what is the airline doing to reduce its carbon footprint?
First of all, the airline industry has been among the most responsible industries of any on the planet in trying to control greenhouse gases and carbon emissions, driven as much by economics as altruism. We spend a huge amount of time focused on lowering our consumption of petroleum products—understandable when you see how important a cost element petroleum products are to us, and when you recognize that there are currently no substitutes. I haven’t seen the numbers, but I would be astonished if the efficiencies of aircraft have not improved more than the efficiencies of cars over the last two or three decades. The economic pressure to become greener will always be with us and, I suspect, will intensify. We welcome that, actually. I think it’s going to drive good decision-making.
Hawaiian has made a huge investment in moving away from relatively fuel-inefficient aircraft to the most fuel-efficient aircraft in their class. We have that with the 717 and the 767. And we’re moving into the Airbuses, which are again an improvement.
And we work with the manufacturers to try and find alternative fuel sources. I think they will come, but I think it’ll be slower in aviation than in other areas, frankly, because there’s such an important safety element. If your car doesn’t run so well on bio-gas, you can pull over on the side of the road; it’s a different matter if you’re halfway across the Pacific and there is a problem. But I think you can expect that airlines and manufacturers will be at the forefront of making fuel efficiency happen. In addition, in other areas we are engaged in a constant process of review to figure out how to reduce our other consumables. Take food packaging, for example: We have introduced and are continuing to seek improvements in recyclable packaging. We’re even using cups made out of cornstarch.