I have known more than a hundred CEOs, and worked closely with dozens of them, but never had I seen one well up with emotion when talking about work. But this happened twice during my interview with El Al CEO Dina Ben Tal Ganancia, who had tears in her eyes when discussing the airline’s role during the current war.
There are no two ways about it. El Al Israel Airlines is no ordinary company. It has a commercial facet, and a national one. Has any other airline CEO, anywhere in the world, activated a protocol to be used in case of Iranian missile attack?
And, of course, there is the personal side. Ganancia became the sector’s first female CEO after shifting her mindset, and daring to say out loud: I can, and I want to.
Let's start with the evening of the Iranian attack. A wave of UAVs heading towards Israeli airspace. Where did this catch you?
"It caught me after a catchball game. I still had my kneepads on. I got to Ben Gurion Airport and went straight into the bunker, which is a structure here dating back to the Mandate period. It's an underground city. There’s a control center, a room for the CEO, dining room, supplies, alternative water supply, and, of course, satellite phones in case cellular communications are disconnected.
"That made me fell calmer. The only problem is, planes can't be brought into the bunker. The planes were on the ground, right before take-off to the whole world. We understood that we had to spread the risk, spread out the planes, not have two Dreamliners next to each other. But how do you even manage this kind of risk? It's not something you learn in an economics course."
So, what did you do?
"We came very, very prepared, with a clear checklist. In the end, you have to make decisions. Imagine the person who boarded a plane from Thailand to Israel, flew half way, and woke up back in Thailand, because we turned them around in the air. The public understood there was an issue here. But the whole schedule was screwed up, it took about a week to restore it, and the public doesn't understand that. They think there are planes parked and waiting somewhere in Thailand, for no reason."
Speaking of the public… let's talk about the elephant in the room. Everyone is saying: 'El Al, what sort of prices are these? It’s pure greed.' Give me the real answer. Why is this happening?
"If they were to claim that El Al could add flights - it has the planes, it has the pilots, but it chooses not to do so, just to generate profits - then presto, those claims would be justified. But 46 planes can’t reproduce. Aviation works on a differential model. That's the only way to manage supply and demand with a given capacity. The State of Israel depends largely on the capacity of the Israeli airlines. We are obliged to leave some seats for the last minute, and the only way to do that is through differentiation."
Last of the Mohicans
Ganancia became CEO two years ago, when the company was in crisis because of the global pandemic. There was even talk of insolvency, with a billion shekel deficit.
"The deficit on shareholders’ equity was a billion dollars. The result of the coronavirus was a change of ownership, and the Rozenberg family (Eli Rozenberg, who owns El Al through Kanfei Nesharim - E.G.) came in as controlling owner. The CEO, Avigal Soreq, came from outside, from Delek US, and served for a little over a year.
"I was the head of the revenue management department, and was appointed vice president of commerce. I had a great deal of experience in many areas, and I knew the commercial world very well. From there, we started working on rehabilitating the company. It was a very long, difficult process.
"I had thoughts that maybe it was time to pack up and move on, and there were offers, too. But there is something about El Al that captures your heart. Even before I knew that I wanted to be CEO, or that I had the opportunity, I felt a personal obligation to stay.
"There was a stage at which there were just a few of us left. I would bring the Dyson from home and vacuum, and also manage the company’s entire cash flow in Excel.
"Then a moment of enlightenment came in a friendly conversation with a colleague: if we stay, then why not go all the way? I wasn't sure. I said to myself: an owner I don't yet know, and he’s religious - would he appoint someone he doesn't know to the post - and a woman to boot? In all of the off-record conversations I had, people said: Okay, you're a professional, that’s all well and good, but you haven’t got a chance. And when someone tells me, ‘You haven’t got a chance' - that's when I start getting extra-motivated.
"Some people laughed at me and said I needed an MRI to make sure I was okay. Those who really love me said, 'Are you sure you want to go there?'
"So, I looked left and I looked right, and I said, I've been here for sixteen years, I've done purchasing, I know cargo, I've worked in maintenance, I've been in commerce for many years. I'm prepared."
So, what did you do? Submit an application? Make a phone call? Were you being considered as a candidate?
"First of all, in a very, very short period of time, I brought all my experience to the attention of the shareholders and the previous CEO, who really supported me, in the VP post as well, and I just decided to go for it. You’d be surprised how, from the moment you’re at one with yourself, you project that outwards. You radiate confidence, you radiate knowledge, and you also radiate tolerance and acceptance of change.
"I mentioned the idea in passing before he (Soreq) announced that he was leaving his post. We talked, and I assumed it would happen in another three years. And that's actually how I was preparing. But suddenly, an opportunity arose and I had to sprint.
"There is also a story with a bit of karma. On the day the CEO announced he was stepping down, I was in a meeting as a mentor for the Maagalim project. It's a project that provides an educational framework for at-risk youth from disadvantaged neighborhoods, and connects them with senior members of the business community. I had the book 'The Secret' at home, so I brought it to the kid I was meeting. I told him that I belong to a farming family, 'moshavniks,' that I had raised sheep, I used to take them out to graze. And he could relate to that.
"Then the CEO came in and said, ‘I need to speak with you. It's urgent.’ I said, ‘I'll finish up here and come.’ I told the kid that the book talks about motivation and optimism, and then I said this sentence: ‘Did you see? The guy who just left is the CEO of El Al. I’m the VP Commercial and Industry Affairs, I was appointed a few months ago. If I tell myself that I'm going to replace him, that can happen, too.’
"Two hours later, there was a meeting, and he announced that he was leaving. I had already announced before that I would nominate myself for the position when the time came. It took about ten days for the board to appoint me. And why am I telling you this? It's not that I'm a big believer in supernatural powers and things like that, but there is something in the integrity of your decision that you project outwards."
A stormy reception
You walked straight into a labor dispute.
"That's right. That was the welcome party. I already knew exactly what I wanted: a very orderly restart plan. I knew I wanted a clear strategy for production capacity, recommissioning aircraft, and getting some money. To start getting out of this situation, I also had to come to arrangements with the state on repaying funds. But one of the most important things for me was labor relations. I was here during the years when they weren’t good, and I realized that we had a huge rift.
"But that was the moment that I cracked it. I said to myself: let's try to understand their distress, and where this rift comes from, and that what they’re doing isn’t against you personally."
But you also can't give them everything they ask for. I'll tell you what I was told: first of all, you didn't get agitated, when someone else would have been offended; secondly, transparency - you said, 'this is the situation, here are the numbers'; the third thing was that, for the first time you created trust -- 'Nobody's trying to screw anybody, we're all in this mess together.'
"I thought back to the dispute with the pilots in 2016, I saw what the company went through, how long the crisis lasted, with a lot of dirty laundry washed in public that didn't serve El Al at all, and a damaged reputation that took a long time to restore. So, I said: What are we willing to give? How do we cut the time, and how do we create trust? I said: let's understand what their demands are, whether they make sense, and see how that serves the company's business goals.
"There was a lot of pressure, flights were canceled, but as you said, I decided I wouldn’t get excited, even when we were minutes away from closing an agreement, and they cancelled, after we'd already agreed on 80% of the items.
"For two or three weeks, I slept here at the company, every day until four in the morning. I would go home, change clothes, come back, and start again at eight in the morning. I would sit with them personally, and go over all the issues, one by one. My experience and my familiarity with many of the people and departments worked in my favor.
"When I was a senior VP, there were people around me instilled in me a fear that might have been right up to a point, that I needed to be tougher, more aggressive. No joking around. But that's not me. I felt it might be a gamble, but it worked for me. I also took no notice of the fact that I was the first female CEO in a super-masculine world; there are very few female CEOs of airlines around the world.
"Another story. Just before the appointment, I told my sports team that I might not be able to play in the next season like I used to. Someone said to me: ‘Wow, what a shame. Another new CEO you’ll have to break in.’ I said, you know, there could also be a woman CEO. She said: ‘No, those are the worst, bitches.’ I suddenly thought about the female CEOs who got to the post by managing like men, the old school way.
"So I actually backed my essential nature. I said: wait a minute, this is me. Maybe this is the strongest thing I have. Maybe this is what will help reach an agreement with the pilots. You call it 'not getting excited,’ but patience is acceptance. I must also compliment the owners and the board of El Al, who relied on my professionalism, and understood the analysis of the risks. I am proud of the open management policy.
"The whole new management we put together is also part of the journey. We had to create a select team of VPs; this is a huge company. We tend to think, fine, it’s an airline, a plane flies from one point to another. But we have a huge booking engine. Given the volume of purchases on our website, we are perhaps the largest retailer in Israel. I have a members’ club that is a mini credit company. I have a giant hangar here with thousands of workers who refurbish planes and run a massive operation. There is a food production facility that prepares kosher meals not only for El Al, but for all the companies that fly here."
"Looking down from above"
Okay, you’ve been in your position for two years, you’ve stabilized the company. What’s the strategy now?
"We’re constantly working on productivity, and this is also part of my working relationship with all the workers committees. How do I increase productivity? That's something I'm willing to pay for. That's what we're working on, and that's the basis of trust.
"The second thing is to enter complementary areas. How do I take all my customers and give them last-mile services, ground services, tourism services, financial products, insurance.
"I have a highly valuable members club with three million members, a very high user profile, of which about 400,000 are credit card holders, about 10% of the credit market in Israel, clearing about three times an average card. The data on these customers are worth a fortune. We’re moving towards a world in which the most precious resource is time, and I hold valuable time of valuable customers. They spend 10-14 hours with me on the plane. I can help them manage their time, and allow them to consume the content they want.
"In essence, that’s the strategic plan, to access all these layers."
And what’s the next big challenge?
"The industry’s sensitivity to crises. After Covid, our profitability started to rise, in 2023 we rose very nicely, with $85 million profit in the third quarter.
"Then war broke out. Initially, I didn't think about anything else, just about rescues and the national mission. Then the whole world started canceling flights. The country was in shock. What was everyone thinking? Here we go again with furloughs. Deep inside, I also began to say, Wow, we were just getting started. No one knew how things would develop."
You didn't know it would affect you right away.
"There has never been a situation in which airlines have stopped flying for so long. And you’re just coming out of a crisis, and leveraged. What I can say is that there was truly amazing teamwork here, everyone mobilized in the first days to manage the war event, and safeguard our finances.
"El Al was the only one flying. I didn't cancel flights, but people wanted to cancel, they wanted to stay at home with their children. On the one hand, (the authorities) wanted me to fly, to preserve the air connection for those who had to fly. On the other hand, everyone wanted to cancel, and for me to return their money. The cash register was emptied in one go."
What did you do?
"Legally I didn't have to, but morally this is what is expected of me. The whole country is at war, there's no one to talk to, pass regulations, and so on. I said, wait a minute - I have a tool that was used during Covid: vouchers. Okay, I’ll persuade the public that we’re safe: take the voucher, I’ll keep flying, come back another time -- in a year, two years. The money stays with me, and in three weeks I take in over $100 million."
What have you learned since being appointed?
"First and foremost, I learned to let go, to delegate authority. The VPs often say: Why doesn't she check up on me every five hours? And I say: listen, I picked you to take this area and cover it for me. If there are no big mistakes along the way, and even if there are and you fix them, run with it. That way, they know how to take responsibility and direct a process to the end.
"Before that, I was joined to my laptop, like it was oxygen. Today, I don't take the laptop out of the office. I look at the absolute top line. Out of a conscious decision, I stay in a place of management, navigation, and assistance. I'm here for you."
Eran Gefen is the founder of strategic consultancy G^Team, which helps companies develop new growth engines. He has experience working with CEOs and management of leading companies in Israel and globally, including Coca Cola, Wolt, Microsoft, Strauss, and Kimberly Clark. A company he founded was acquired by Wix.
Published by Globes, Israel business news - en.globes.co.il - on June 6, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.