New Chief Seeks to Build More Competitive Airline : Ex-Stowaway Is Shaking Up Swissair

Next time you check in to fly Swissair, take a closer look at whoever hands you a boarding card. It could be airline President Otto Loepfe.

The one-time car mechanic, who took charge of the Swiss flag carrier on Aug. 1, has ordered all managers to spend at least a day each month dealing directly with customers.

“I want everyone, whether they are working in finance or anywhere else, to be aware that ultimately they are working on a product for a customer,” he said.

A believer in leading by example, Loepfe has not exempted himself. He plans to be at a check-in or travel agency counter once a month.

“We can’t ask things from our staff that we’re not prepared to do ourselves,” he said.

Loepfe, 52, has also shaken up Swissair’s bureaucracy.

He cut the number of levels in the hierarchy to six from nine and abolished the elaborate titles so beloved of Swiss managers, replacing them with simple job designations.

Key managers, including the head of North American operations, had to reapply for their own jobs. Loepfe kept his. Not all were so successful.

Some Unease

“That was something new,” Loepfe admits. “It caused difficulties for many people, but on the other hand, a lot of the younger people saw it as a great opportunity.”

His methods have earned admiration in the Swiss financial community but also aroused just a touch of unease. As one analyst put it: “If he brought his approach to management into our bank, heads would roll.”

Loepfe’s early career was somewhat unconventional for a future airline chief. After a car mechanic’s apprenticeship he spent a year hitchhiking. He crossed the Nubian desert as a stowaway on a train and worked as a kitchen hand on a freighter.

Later, he earned a master’s degree in science at Stanford University and then joined Swissair engineering in 1969.

Bid to Compete

Loepfe says his shakeup at Swissair, which last year carried 7.9 million passengers, is to help it compete in an increasingly turbulent and ruthless business.

He does not agree with some competitors that future skies will be dominated by just a handful of huge carriers, with smaller ones swallowed up or forced out of business.

“I am convinced that we can continue to exist as a medium-sized airline if we act intelligently,” he said. “Not being too big has its advantages. You have more flexibility and are better able to motivate people.”

A wide base of about 40,000 shareholders and the Swiss practice of letting companies refuse to register unwanted shareholders make Swissair fairly safe from predators.

Among its strengths, Loepfe cites a modern fleet with an average age of just six years, an extensive network and a strong financial position. Liquidity exceeds 1 billion Swiss francs ($630 million).

More than 18,000 employees mean Swissair “could be slimmer,” Loepfe concedes. But he has promised that there will be no layoffs and that stress will fall on productivity.

Loepfe foresees more cooperation with other airlines, which could include share swaps. But he refused to comment on market rumors of a deal with Atlanta-based Delta. Swissair flies to five destinations in North America and seeks more.

“Swissair has read the signs of the times,” said Rolf Angehrn, an analyst at Credit Suisse. “It’s basically a healthy company and financially it’s on a firm footing.”

In the first half of this year, an upturn in air traffic boosted gross profit by 56% to 161 million francs ($100 million).

The airline is cautious in forecasting full-year 1988 results, but analysts are less hesitant.

“We expect record results from Swissair,” Angehrn said.

Urs Ernst, head of research at Bank J. Vontobel, said profit may be up by about 20% in 1988. “Loepfe is really bringing new life to Swissair,” he said. “He looks at things as a businessman, not as a pilot.”