An Interview with Hollis Harris

(Photo Courtesy of Delta Air Lines)

Hollis L. Harris

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In the rough and tumble world of commercial aviation, Hollis Harris is revered as a solid leader with a passion for serving the customer. I read about his outstanding reputation, for years, as a man who cared as much about his employees at Delta Air Lines as he did his customers. As the 1980's came to a close, Delta Air Lines lost a great leader when Harris was recruited to Continental. After our visit in Airways magazine was published, I received a phone call during breakfast. Hollis Harris had just read our interview, enjoyed it, and was curious to ask why I chose to interview him. I told him that in today's world, there are many egos in business, but few legends. Hollis Harris is a legend. Here's my report: 

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It's hard to imagine the landscape of the commercial aviation industry as we know it today, both in the United States and Canada, without the influence of Hollis L. Harris. Over the course of his amazing 51-year career, Harris established himself as a problem solver specialized in customer service. Armed with a degree in aeronautical engineering from Georgia Tech in 1961, Harris began working at Delta Air Lines as an agent and gradually worked up the corporate ladder to head Delta’s aircraft engineering department. He continued to excel through key management roles in the facilities department, in-flight services, passenger service and operations. By 1987 he was appointed as Delta’s president, Chief Operating Officer, and a member of the airline’s board of directors.

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On August 10, 1990, Hollis Harris was recruited by the board of directors of Continental Airlines to succeed Texas Air Corporation Chairman Frank Lorenzo. As a condition of this succession, Lorenzo sold the majority of his stock in Continental, Continental Holdings and Jet Capital Corporation to Scandinavian Air Systems (SAS). Jan Carlzon, then president and chief executive of SAS, stated Lorenzo's agreement to step down from Continental was critical to the deal. ''Without that in the picture, we wouldn't have done it,'' he said. SAS agreed to buy 2.25 million Continental Holdings shares for $31.4 million and $21 million for all of the outstanding stock in Jet Capital, which owned 2.1 million shares of special Continental Holdings voting stock. These terms gave SAS 16.8 percent of Continental Holdings’ common stock and 18.4 percent of its voting stock, along with three of the company’s 15 board seats.

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The Continental Airlines that Hollis Harris inherited was saddled with junk bond debt. After years of acquisitions, the airline was on the verge of bankruptcy. The differences between the well run Delta Air Lines and Continental were staggering. “When I went to Continental it was a different management challenge”, said Harris at the time. “I learned more about people and crisis management in one year than during my entire time at Delta.”

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With the onset of The Gulf War, world oil markets caused jet fuel prices to double, forcing Continental to file for a second Chapter 11 bankruptcy on December 10, 1990. In a rebranding effort to signal to the public that Continental was reorganizing from the inside-out, a new blue and gray livery and “globe” logo was introduced on February 12, 1991. However, a disagreement between Continental’s board and Harris’ management team centered on moving the carrier forward with a strategy that supported Continental’s employees. Unable to overcome significant differences of opinion on this matter, Hollis Harris and R. Lamar Durrett, Executive Vice President for Personnel resigned from Continental on August 22, 1991. Interestingly, Continental’s fortunes would prominently resurface with an intervention led by Harris after assuming the leadership at another carrier.

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Harris returned to Georgia to start the aviation consulting firm, Air Eagle Holdings. In 1992, he was recruited by Air Canada to reverse its financial decline--the previous year $218 million (now $360 million) had been lost. As vice chairman, president and CEO, Harris embarked on a three-year plan to restructure the airline's operations, also moving the corporate headquarters from downtown Montreal to Dorval International Airport (renamed Pierre Elliott Trudeau International Airport).

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On October 25, 1992, Harris along with Stephen M. Wolf, then CEO of United Airlines, created and signed a "strategic agreement" between Air Canada and United that became The Star Alliance. Execution of The Star Alliance in May, 1997 involved the five founding airlines of Air Canada, United, Lufthansa, Scandinavian Airlines and Thai Airways International. Today, The Star Alliance has 28 member airlines with more than 21,100 daily departures combined. These flights reach 1,356 airports in 193 countries, with 678.5 million annual passengers.

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A case of poetic justice was served on November 9, 1992, when Harris successfully led a group comprised of Air Canada and Fort Worth, Texas-based Air Partners in a bidding war for Continental Airlines Holdings. The $450 million (now $721 million) offer initially gave each group a 27.5 percent stake in the carrier.

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By 1994, Air Canada had returned to profitability and won authority to fly to Osaka Kansai, Japan. The following year, Air Canada added 30 new trans-border routes. His mission at Air Canada completed, Harris returned to the USA in 1996. His 'semi-retirement' was short-lived.

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In 1999, Hollis Harris was appointed chairman, president and CEO of World Airways. He moved the airline's headquarters from Virginia to Peachtree City, Georgia, and led a the restructuring to profitability before retiring in May 2004. On April 23, 2005 Harris was inducted into the Georgia Tech College of Engineering Hall of Fame. Now 81 years old, Hollis Harris is on the advisory board of Propeller Investments. A true Southern gentleman, I enjoyed an informal discussion with him about the airline industry in the months leading up to the recent merger announcement of American Airlines and US Airways.

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Manning: What are your thoughts of the Delta Air Lines of today? They’ve been through a Chapter 11 bankruptcy, and emerged to absorb Northwest Airlines. Surely, you must have some objective observations today as you look at Delta?

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Harris: I think Delta is an outstanding airline right now. It’s based upon what the people have done to develop it over the years, and especially as we acquired other airlines, and then made them all -- as a package – a successful airline -- even after going through bankruptcy, of course, as you mentioned. But I think that Delta is a great airline, and the people that built the customer service package over the years, is what made Delta Air Lines famous.

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Manning: Speaking of Delta, what are your thoughts on the mega-mergers of today involving Delta and Northwest, and later Continental becoming part of United?

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Harris: Well, I think it is necessary for the present times. You know, I started working right out of school with Southern Airways, which was based in Atlanta, Georgia. It was a little airline. We never did get it. We acquired Northeast Airlines and we acquired Western Airlines and later Delta got Northwest Airlines. And so I think that the basic answer to your question is that there has to be consolidation, and you’ve got to have significantly stronger management capability than if you tried to operate with just the airlines that were independent – Delta and later United and Continental. But at Delta, I very much respect Richard Anderson and think he’s a good leader. When I went to Continental, he was a lawyer there.

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Manning: One of the most exciting events I remember from your career was the reorganization plan you started working on at Continental that continued when you took over as president and CEO of Air Canada. How did the Air Canada plan with the Air Partners Group come about?

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(Photo Courtesy of Continental Airlines)

Continental's livery was retained after the merger with United Airlines
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Harris: Well, when I went to Continental, it was just before the big jump in fuel prices. I had a successful life with Delta Air Lines, but I wanted to be a CEO. So, I went to Continental and made the deal to be the chairman, president and CEO. When we shook hands on the deal, fuel was about 57 cents (equivalent today to 98 cents) a gallon; but it was about $1.28 (today $2.20) a gallon by October. I went in there in late August (1990), and when the fuel got to $1.28 we knew immediately that we were going to have to put it into bankruptcy.

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I brought one of my big supporters with me, Lamar Durrett (executive VP of personnel). When we saw that the fuel was going to stay at that level for a while, we were blowing about $70 million dollars (now $120 million) a month in fuel. As we were looking at what we had to do, I told Lamar, ‘When we were working at Delta Air Lines, we didn’t even know how to spell the word bankruptcy!’

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Manning: Were you a supporter of deregulation? And, in your view, how has deregulation turned out for the airline business and the consumer?

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Harris: I think it has been a success for the customer. It created a bigger challenge to manage the airlines with all those things happening, and some of the airlines going out of business. It just created some viewpoints from the customer as to which was going to be the best airline, and which one they wanted to hook up with and fly. What it boiled down to was that all airlines needed to be in business in order to give the best customer service that was required of the passengers.

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Next: We conclude our visit with a story of how the Star Alliance was created, along with Hollis' pick of favorite CEO's.

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