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Aviation History
1993
1993 - 1492.PDF
review of THY, which he launched with barely restrained enthusiasm. He drafted a spectacular growth plan, now under way, and cheerfully "micro-managed" his way through the airline's sleepier backwaters. It has been a strange tale of a long-time industrialist, once head of Koc's steel empire, teaching customer relations to a quintessentially service-based enterprise. Yaramanci attributes much of his suc cess so far, now reflected in THY's bottom line, to his outsider status. "I'm a new comer," he says. "I have some handicaps, in that I don't know some of the tools, but, also, I don't have any prejudices. "The airline industry is a service indus try. There is much technical input, but substantially it is a service industry — you are serving your passengers. For them, the important impression is the service they receive on the ground and in the plane. "The background technicalities, the planning of flights and so on, is some thing which the passengers do not see. This was the first conversion I had to undergo. "The airline operation, even in a rela tively small company, is a global opera tion. This is the most impressive part and THY is the only company in this position in Turkey. Naturally, this large distribu tion means giving particular attention to managing and co-ordinating services. This requires a strong infrastructure for your management methods and procedures. GLOBALISED INDUSTRY "Maybe the situation is very similar in globalised industry and trade. As Turkey doesn't have any globalised industry in these areas, I did not experience it. I have been trying to get the expertise to deal with these kinds of widespread organisa tional problems." What Yaramanci finds most striking at THY is the contrast between his private- sector experience and the state-owned oper ation, which goes to the heart of the car rier's future. Yaramanci says: "For me, there was a two faceted-conver sion: from industry into service; and from the private sector mentality into an at mosphere where state-owned ideas prevail. "In the private sector, like everywhere else, people are motivated for production and obtaining results and achievements. Faults are either tolerated or punished Going private Yaramanci plans to tell the Turkish Government in 1994 that THY is ripe for privatisation. He sees a major carrier taking a substantial share in what will be one of the most important privatisations in the airline sector. He says: "Officially, THY is on the Government's privatisation list, but priva tisation is a very difficult operation and you must first have the patient in a condition where you can operate." Yaramanci continues: "Any company with a strong Government institution mentality needs a philosophical change first. Otherwise, you can suddenly create a lot of unpleasant situations for the company and the employees." He stresses that the Government has not indicated how the privatisation will proceed, but suggests: "I can imagine one major airline taking a substantial share — a minority, but still enough to be repre sented strongly in the management. I believe the proportion will be up to about 40%. This means the company keeps its national flag-carrier capabilities, but the private influence will be strong." Yaramanci believes that "...there will probably be a [Government] golden-share arrangement" to ensure that the airline fulfils its national mandate, but neither the workforce nor institutional investors will be involved because of the relative undesirability of airline investments generically. The THY president adds: "My approach is not to sell existing shares, but to make a capital increase where the new partner can subscribe. This means that the cash investment of the new company will be kept in the company and used for im proving THY." He says that THY has had "uncommit ted chats with friends", but has deliber ately not solicited bidders yet. "One major criterion in the privatisa tion would be to link us with a company with whom we are not natural competi tors. This means THY's potential partner should lie outside the centre of gravity of our existing network. You will see that US carriers, far-west European carriers and Far East carriers fall into that category," he observes. Yaramanci says he excludes specifically "central European" airlines. He says that "...what is being looked for is the transfer of management technology into THY and the connecting of THY into a world wide link". Tezcan Yaramanci "I believe that a new THY...is a very interesting partner for any international mega-carrier" and positive results get a bonus. In the Government sector, the punishment side is the same, but the rewards are missing. The incentive for success is missing in the personnel regime. "All this forms attitudes — in the private sector, people are eager for suc cess, take risks and push for rewards. In Government compa nies, there is no financial reward for success, but there is possible punishment. People take no risks because that way they cannot make mis takes." An animated Yar amanci continues: "This difference in attitude reflects in behaviour. In the pri vate sector, you have an offensive system which attacks prob lems to solve them and gain new devel opments. In the Gov ernment-related en terprises, you have a defensive system of people who would rather do nothing than start making mistakes." Yaramanci sees two primary cures. Firstly, the instigation of a reward mechanism and, secondly, training people to understand THY's task. "Though our salary system still doesn't allow us to give effective rewards, we can make people feel that, whenever they do something posi tive, the management is aware of that. When something starts going wrong, management realises this. At first, it is tolerant, but if it repeats, there are conse quences," he says. "We are not a small transportation company, but a medium-sized airline with passengers as guests and customers who have the right to be satisfied. This has to be taught to people. After a while, they begin to learn it and believe it. I am pleased to see, within a year, a complete change in the staffs attitude towards the passengers. This has been achieved by changing only a few people at manage ment level. "Where our flight attendants were re luctant to help passengers in the past, today they are helpful. They enjoy their job and the passengers realise this." Other THY managers note that the attitudes cultivated in staff may have helped Yaramanci head off a potentially crippling strike. The president managed to persuade his once-cosseted workforce that there was no more money on the table, but also seems to have been able to inspire a faith in a better THY future for FLIGHT INTERNATIONAL 16 - 22 June, 1993 45
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