Former Aer Lingus CEO emphasizes ‘value in keeping things simple’

Former Aer Lingus CEO Stephen Kavanagh told FSU College of Business students, faculty members and staff members at the Dean's Distinguished Speaker Series: "There is a value in keeping things simple, or at least identifying the simplicity behind complex issues."
Photo by Kallen M. Lunt/College of Business Click to enlarge

Former Aer Lingus CEO Stephen Kavanagh emphasized the value of simplicity Monday at the Florida State University College of Business, sharing insights from his remarkable career journey from a shy airport worker to successful airline executive. 

"Not to demean the value of complexity, but there is a value in keeping things simple, or at least identifying the simplicity behind complex issues," Kavanagh told students and faculty and staff members. "The opportunity, as you'll see, is simply to be open to recognizing opportunity." 

Introducing Kavanagh as part of the Dean’s Distinguished Speakers Series, Dean Michael Hartline highlighted Kavanagh’s 4,000-mile journey from Dublin to Tallahassee and said with a smile, “Stephen, I think you win the award for traveling the farthest.” 

Hartline and other FSU officials met Kavanagh during last year’s Aer Lingus College Football Classic, which Kavanagh co-chairs. Hartline bemoaned FSU’s 24-21 loss but championed the opportunity to meet Kavanagh there and host him here. 

"We did not beat Georgia Tech, but we won the pregame and the postgame,” Hartline said to applause, then added about Kavanagh’s presence in the room: “It was a clear win for all of us in the College of Business." 

From shy teen to airline leader 

Kavanagh, currently a non-executive director of CDB Aviation, Norwegian Air Shuttle, Oman Air and Oman Airports Management Company, launched his airline career as an 18-year-old working the check-in desks for Aer Lingus. It happened in 1988 when jobs were scarce in Ireland.  

He said the company “took me from a time in my life where I spent my teens looking at my shoes and avoiding eye contact and put me in a uniform, put me on a team and put me behind a check-in desk, where I had a new social interaction with a complete stranger every 90 seconds. That was transformative for me." 

Kavanagh credited a book, "The Essential Enneagram," for helping him understand his personality type as "one of life's observers." That helped him recognize how companies need different leadership at different phases of business development. 

He worked his way up through the company, as corporate planning director, chief commercial officer, chief strategy and planning officer and, in 2015, chief executive officer. By the time he stepped down in 2019, he said, Aer Lingus had grown to a point where it needed “a completely different type of leadership style – that was my diagnosis.” He stayed as a non-executive director at the airline, no longer involved in daily operations but providing strategic advice and oversight to the company’s leadership, until last March. 

During his tenure, he led the airline, which the Irish government founded in 1936, through its 2015 sale to International Airlines Group. He then championed the development of a value model strategy that saw the carrier grow by a third in revenue, doubling its operating margin and delivering an industry-leading return on invested capital. 

Product of his ‘imagination, belief, expectation’ 

Industry leaders credit him with modernizing and transforming the airline – growing partnerships with United Airlines and JetBlue and aggressively expanding direct transatlantic services to North American cities. 

“I’m absolutely clear that the brains behind Aer Lingus is, was and will be Stephen Kavanagh,” Willie Walsh, International Airlines Group’s CEO at the time, said in 2017. “What you see today is a product of his imagination, his belief, his expectation.” 

In his presentation, Kavanagh cited a focus on the revenue pipeline as a key to success. Given the complexity and difficulty of managing airlines, he said, executives should aim to “simplify the essence of an airline as a business.” Then they can identify where they can add value and offset structural issues, he said. 

Under Kavanagh, Aer Lingus maintained what he called a “demand-led value proposition” centered on cost, product and service. Also, he said, the airline treated every ticket holder as a guest. 

“They might be paying you, but they're a guest,” he said. “When you start losing focus on the guest, you lose focus on what's of value, because the value of the proposition is not what you deem it to be. It's what the guest deems it to be.” 

Geography as strategic advantage 

For Aer Lingus, one especially notable strategic insight came from recognizing Ireland's geographical advantage. Using a spherical map rather than a flat projection, Kavanagh demonstrated Dublin’s ideal setting as a transatlantic hub. 

"The shortest crossing between any point in North America and most of the points in Europe will cross over Dublin," he said. "When you're paying for fuel, you're paying for crew, you're paying for ownership costs of the aircraft,” you want shorter transatlantic flights. 

Kavanagh added: “The shortest crossing across the Atlantic is not just the most cost-efficient and time-efficient: You create the potential to deliver return on invested capital that is sustainable over time." 

This geographical advantage, combined with the historical connections between Ireland and North America, gave Aer Lingus a natural market to target and the mindset of a U.S. carrier. Kavanagh pointed out that it’s easier to market Boston to Europe than Europe to Boston, for example. 

“We did not build a business simply on Irish-Americans,” he said. “But if you can get a head start in any business, you should take it.” 

The power of focused value 

Instead of trying to build Aer Lingus into a five-star carrier, Kavanagh said he implemented a mission to be "the leading value carrier across the North Atlantic.” This positioning – neither low-cost nor luxury – allowed Aer Lingus to focus on delivering what customers valued. 

"Value is not about price. It's about what you get," Kavanagh said. "As long as we were clear and consistent in what we offered and did it at a competitive price, we believed we could be the leading value carrier across the Atlantic." 

Kavanagh noted that Dublin now ranks as the fifth-largest transatlantic hub between Europe and North America – impressive for a country of fewer than 6 million people – outranked only by London, Paris, Amsterdam and Frankfurt. 

In closing, Kavanagh thanked FSU for its participation in the Aer Lingus College Football Classic, describing it as "a tremendous success in bringing people together, in creating new experiences, in creating new opportunities and in cementing the Irish-American relationship." 

-- Pete Reinwald