John Leahy has been with Airbus 33 years, holding his current position as COO-Customers for more than 20 of these. He retires this month. Jan. 15’s 2017 year-end Orders and Deliveries press conference will be his last. LNC interviewed Leahy about his tenure at Airbus. Parts 1, 2 and 3 appear here, here and here. Today is Part 4. LNC’s Scott Hamilton has known Leahy for nearly 30 of these 33 years.
Jan. 12, 2018, © Leeham Co.: “I want to unwind, get healthy, eat right and not be in a constant state of jet lag. At 44, 45, I didn’t mind it. Right now, the thought of
doing trips to Australia, I’d be jet lagged for three days.”
These are John Leahy’s plans for the first year after he retires in a matter of days after 33 years at Airbus.
When he was younger—that age 45 he referenced above—he thought nothing of working in Toulouse, Airbus headquarters, on Monday, getting on a plane to fly to Southeast Asia and Australia and be back in Toulouse to put in a full day on Friday—working the clock to make the long, long round trip.
“It was sort of fun,” he recalls. “I did a lot.” But not now.
At the 2017 IATA annual meeting in Cancun, Mexico, Leahy told a press gathering that his doctor and his wife told him he needed to retire.
The years of travel, business meetings and entertaining clearly had taken a toll. His health occasionally hit the press even before then. An emergency appendectomy and some heart issues plagued Leahy over the years.
He loved the business, he loved the sales hunt and he loved beating Boeing. It was said he wouldn’t quit until he left feet first. Clearly, this changed.
Now, Leahy wants to relax and restore his health. No consulting, or so he says.
With 33 years and thousands of sales campaigns behind him, Leahy looks back and points to his early years cracking the US market. There are also other sales successes, outside the US, that were important, but he takes a bigger view of his biggest successes about which he is the proudest.
“The biggest success is the strategy going for 50% market share and lining up the company behind me to do that,” Leahy says.
“I think another thing was to break the concept that you couldn’t overlap airplanes, which they had around here. The 330 was intentionally being held down in takeoff weight and performance because they didn’t want it to overlap the 340.”
One of the first projects Leahy pushed through was the A330-200, “which turned out to kill the 767.”
While Leahy freely named names of sales campaigns in the US—United, American, Northwest, Pan Am—he declined to do so in the rest of the world.
His greatest successes were “the ones that I won.” His greatest disappointments were “the ones I lost.”
“The biggest disappointment is not just losing a campaign. With 50% market share, I’ve got a lot of experience in losing campaigns. It would be losing campaigns but not knowing you’re were losing.
“If we’re sitting there in front of the customer and we learn he’s going with Boeing, we should know he was leaning in that direction,” he said. “The shocking ones would be the ones where you are sitting across the table, you think you are winning, and all of a sudden he says, ‘John, you know, you’ve got one of the best sales teams.’ When I hear that, I know I’ve just lost. ‘These guys work around the clock for you.’ I think, oh, shit! When I hear that, and you think you’re winning, it’s just devastating.”
Leahy wouldn’t name names, however, except in recalling a campaign with Delta Air Lines.
Delta, along with American, Continental and United airlines, signed exclusive supplier agreements with Boeing in 1994. The moves caught Leahy off guard.
The European Union had to review the merger between Boeing and McDonnell Douglas three years later and found the agreements to be illegal. Boeing agreed to abrogate the agreements, but one CEO—Crandall—years later acknowledged he did a side letter agreeing to honor the terms. It’s likely the other airlines did, too.
United didn’t buy an Airbus airplane again until Glenn Tilton was CEO and ordered the A350. Delta stayed true to Boeing until 2013—about 20 years.
“When we finally broke back into Delta [in 2013], I remember we did lose a deal (the A321ceo vs 737-900ER). We were about ready to walk away and never bid again. We had put a deal on the table and we had won the deal, from what we could see. They called up Boeing and asked if they wanted to meet it. Boeing put a little more on the table and won the deal.”
Leahy said Airbus asked afterwards why Delta would do that. He said a very senior executive they’d been working with Boeing for 20 years and thought they owed them the last call.
Leahy asked why Airbus should ever bid again if all that was going to happen was that it would be played off against Boeing?
“I did say to that executive, isn’t it interesting that Boeing always had your best interests at heart [with the exclusive supplier deal]? How come, when you brought us in, they gave you the best and final offer, then when we bid again, they improved their best and final, when we bid again, they improved their best and final furthermore, and when we won the deal, you called them up and they improved it a third time?
“Maybe if you had just called them and never brought us in, you might have been paying more for the airplanes,” Leahy said he told Delta.
“How any company would ever say ‘I blocked myself from competition because I got a short-term gain on this next deal is beyond me,’” Leahy says.
Airbus won the next round for the A321ceo. Delta since reordered the 737-900ER and the A321ceo, buying more than 100 of each. It also won Delta’s first order, last month, for the re-engined aircraft, choosing the A321neo over the Boeing 737-10.
Although Leahy was “pissed” at American Airlines CEO Robert Crandall for launching the exclusive supplier trend in the US with Boeing, he looks back at Crandall as one of the most colorful people in the industry.
“Bob Crandall was one you would definitely call colorful,” Leahy said. “He was probably one of the most colorful.
“There are others around the world who are legends, who you knew you were with a great man.
“My friend, Steve Hazy, the Godfather. People joke about it, but he really is the Godfather of the [lessor] industry. People look up to him. They look up to his knowledge of the industry. They broke the mold with characters like that.”
Hazy was so influential and powerful, his team was on countless equipment committees at Airbus and Boeing when new airplanes were being conceived. An endorsement from Hazy could “make” an airplane. A criticism could “break” an airplane, as LNC described here.