An Interview with Hollis Harris (Conclusion)

(Photo Courtesy of Air Canada)

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Resuscitating one airline is impressive enough. But Hollis Harris managed to save three. In our conclusion, we are taken "behind the scenes" during his tenure at Air Canada. We also learn how the world's most famous airline alliance was created. Colleagues and successors can be both "smart alec's" and brilliant leaders. We'll learn about this too, as I wrap up my visit. During Delta's Chapter 11 bankruptcy, there were calls from employees to bring Harris back to the airline. Today, at 81, he is modest, and insists that what has made Delta great is its employees.   

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Manning: What was the situation when you joined Air Canada?

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Harris: Well, when I got to Air Canada and we had taken an ownership in Continental, we knew that we had to lock into the big traffic east of the Mississippi to get our share of the marketplace. In doing that, we would have to make a bunch of changes. The first thing that I had to do at Air Canada, we had about 23,000 employees and 3,000 of them were managers. We were very much top-heavy, and we had to eliminate some of these positions.

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(Photo Courtesy of Delta Air Lines)
Hollis L. Harris
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When I went in the door we were losing about $1.5 million dollars ($2.4 million today) a week, so we had to get some cash. Air Canada had three Boeing 747-400 combi’s sitting in the desert. They had been bought when the (Canadian) government owned Air Canada. We had three airplanes in the desert that were paid for. We were going to have to go into bankruptcy if we couldn't raise some cash. At Continental we had the headache of putting that carrier into bankruptcy. I said, ‘We’re going to take those airplanes out of the desert’, and others said, “That isn’t going to work. We can’t afford it and they can’t make any money”. I said, 'You sure can’t money with them sitting in the desert!' So, we went to GE Capital and we sold those airplanes to them for $150 million dollars ($240 million today) each. And that $450 million gave us the cash to do some of the things we were going to have to do. We then leased them back and made money with them.

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Manning: When you were still with Air Canada, British Airways was denied a larger ownership stake in US Air. Should foreign carriers be allowed to invest more heavily in U.S. carriers?

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Harris: I didn’t think so at the time. But I was willing to get involved in it myself. Because I talked to British Airways about being a partner and also I talked to US Air to see what they were going to do. They were trying to partner with British Airways. But I think the twenty five percent rule was okay.  (In 1993, BA purchased a 24.6 percent stake and had planned to acquire as much as a 44% share in US Air. However, after a lack of approval from the US government, relations soured between the two carriers, and BA sold its stake in 1996).  

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Manning: One of your major achievements was the creation of the Star Alliance. How did you decide to create it?

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Harris: The way we got that started was that Steve Wolf was chairman of United and he and I were friends. I talked to him about establishing an alliance between United and Air Canada. We started down that road, and Wolf then went to Lufthansa to talk with CEO Jürgen Weber. I said to Lufthansa, 'Look, you’re a big partner with United and I want you to be a big partner with us. But you now are a big partner with the airline out in Calgary' (Canadian Airlines International). And we finally convinced them that they should come aboard with Air Canada and United. About the time that I had made the commitment to work for five years, I wanted Lamar Durrett to become CEO when I left. We worked out a plan among ourselves, and when I left they put two more airlines in it. That's how we got to 'five stars'. The first the thing they did over the airport in Frankfurt was to have a fly by with one airplane of each of the alliance members flying wing tip to wing tip.  

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Manning: In general, what do you think of the current airline CEO’s in the United States? Are there any that you admire?

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(Photo Courtesy: ACE)

Robert Milton

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(Photo Courtesy: CAL)

Gordon Bethune

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(Photo Courtesy: SWA)

Herb Kelleher

Three of Harris's most admired airline CEO's
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Harris: I turned Air Canada over to Lamar Durrett and he stayed in it for three years. Then he retired. But the guy that I had behind him, Robert Milton, went on to become CEO of the holding company of Air Canada (ACE Aviation Holdings, which recently relinquished its interest). And in my opinion, he is the best airline CEO in the whole world right now. And then Gordon Bethune at Continental came in from the West Coast and stayed in there through their turnaround. Gordon was a smart guy, but he was a smart alec too (laughter). But he established himself as one of the top airline CEO’s in the world.

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Manning: What are your thoughts on the low-cost carriers of today?

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Harris: I think the one that is doing the best is Southwest. Going back to Herb Kelleher --who has always been one of my friends – he and the team that he built up was one of the most outstanding ones in the airline business. Kelleher – he was something!

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Manning: You’ve received a great deal of credit for turning around Continental, Air Canada and World Airways. What are the major challenges facing these companies as they attempt to survive and thrive?

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Harris:  I prided myself in being a people-person. And I listened to all the people in the company. But I think that some of the people (in management) today are thinking too much of themselves, instead of other people in the airline. One of my basic objectives was that I always tried to hire a person that I needed to work in a certain area that was smarter than me. We would work together, and not to overcome one another, but to be good partners and I think that worked.

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Manning: What is your proudest achievement in commercial aviation?

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Harris: I think it was being able to work with Delta and spent 36 years there. When I started out, it was on the ticket counter. As I said before, it was the people of Delta that made it successful. I was proud to be a part of that team, and then when I had the opportunity to go to Continental, they too were people-oriented. I believe that I was hired by the board at Continental because of what I was doing at Delta for customer service. So, they wanted me to help them with their customer service, and maybe some of that rubbed off on them. When we decided to buy Continental when I got over to Air Canada, everybody I think in the airline world thought I was crazy. But it meant that Air Canada and Continental were both able to survive. And so that saved a lot of people’s careers and lives. We had to make some tough decisions. But in the end those tough decisions worked out. 

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Manning: Do you miss the airline industry?

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Harris: I would love to be with a major airline. They probably would fire me because I couldn’t do what I used to do. But I would like to get the smartest guys around and try to help that airline out.

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The author wishes to thank Hollis Harris for making this interview possible.

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