Anna Rudzinska from our office in Warsaw spoke with MICHAŁ FIJOŁ, Chief Commercial Officer and Board Member at LOT Polish National Airlines about how to introduce digital transformation and manage a large organisation in times of change.

Michał, could you first introduce yourself and tell us something about your role as a Chief Commercial Officer?

Basically, I sell tickets! That is how I describe my position outside the industry. Why so? Because airlines are associated with airplanes, captains, cabin crew, airports; it is the usual passenger perspective.

The back-end, of which I am in charge, is very seldom revealed to the public and it includes all the commercial activities of the airline: network planning, airplane allocation, ticket pricing, revenue management, global sales and marketing, product, contact centre and airport customer service and last but not least cargo business. As Chief Commercial Officer I am here, together with my team of over 800 people worldwide, to run a profitable airline business.

And the company itself? How big is this business? What are the challenges that you as an organization face?

LOT is one the oldest airlines, established in 1928. It has its hub in Warsaw, working mostly in hub&spoke model with some point-to-point flights operated from Cracow and Budapest.

I joined LOT in January 2016; the airline was at that time on the verge of bankruptcy. The simple plan of the new board was the profitable growth of LOT. As a result for the following four years, between 2016 and 2019, LOT was the fastest growing airline in Europe, over 25% every year: the number of passengers increased from 4.5 to 10.5 million yearly, the number of destinations from 42 to over 100, the number of our planes was doubled to 80. And in all those years LOT had a significant positive financial result. Then the difficult times of COVID came, which was a disaster for the entire travel sector. Now I am pleased to say: we are back on track.

These are your results and successes, but what was the path? How did you manage to achieve such results?

Firstly, let me say that aviation is an internationally exposed industry which requires extraordinary cooperation. Neither success or a failure is an individual result. The mind-set of the entire management team as well as the efforts of the entire organisation were necessary to get where we are.

This is why a great team is necessary to accommodate the growth and at the same time to charge the company. Sales is based on relations and we invested a lot of time into our network. All the rest are numbers and all our decisions have been backed up with proper analytics.

My special focus was on digital transformation of the processes within the entire company. The team needed to keep in mind the passengers’ perspective in every decision and change we made - passengers’ comfort and convenience. The ultimate goal was to deliver a smooth digital travel experience, which consists of inspiration, promotion, booking and payment process, post-sales activities, check-in, communication with the passenger, in-flight and post-flight services.

I am extremely satisfied with what LOT achieved as currently one of the biggest e-commerce businesses in Poland. The quality that we offer in our own channel on lot.com and through LOT’s apps provides a world-class customer experience which translates into great results and passengers’ satisfaction. The major advantage for an airline is direct communication with the customer – I prefer saying: passenger or guest – better control over the process and lower cost. At the same time we know more about the needs of our passengers so we can better adopt and have a better offer for them.

In parallel, we put a lot of effort in expanding our collaboration with indirect sales agents. I truly believe they will always have an important role as travel managers. An open dialogue, continuous communication, understanding of their needs, beneficial cooperation are the manifestation of this attitude.

With every transformation and change, managers must face financial restraints. Also, people often do not like change and try to avoid the new and unknown. How did you deal with such situations?

Two important aspects need to be mentioned here.

Firstly, the promotion of change: the team knows that we need to increase our business and we need to improve. The consequence is that resources are necessary because our people need time to accommodate the significant growth and also to find space for change implementation. The change means introduction of the most modern IT solutions, new products for our passengers, process optimization, and business development. Growth accommodation means that LOT serves more and more passengers every year, and the change means that we are able to serve even more passengers with the same resources and be more profitable.

Participation in change increases adoption of the new solutions, it is perceived as distinction, and enables a chance to gain new competencies. The change leaders are the ones who I appreciate the most.

Secondly, and here let us come back to the digital transformation, the changes in IT systems designed for aviation are extremely complex. Plus, the airline had a significant IT debt. Introduction of new technologies does not mean just a purchase of an IT solution. This is the entire business process which needs to be improved and adopted to the highest industry standards and the best-of-class practices from all over the world. That is why I have been always able to convince my board colleagues to invest significant amounts into IT implementations accompanied by extensive consultancy services. That is how we managed to achieve high adoption rates and avoid complains from the unsatisfied teams.

This attitude is crucial because an airline–you may not believe it–is truly an IT company. We have over 100 IT systems, extremely complicated, some of them using artificial intelligence and machine learning, including operational systems with worldwide interactions, marketing automation and content management systems. Some of them are built with the best IT companies worldwide like Adobe, Microsoft, or Amadeus. The implementation of high-tech solutions required an extensive cooperation between LOT and those suppliers, which was very exciting for both parties. Certainly, we are not the biggest airline, but we did manage to gain their interest and support with our engagement, ambition and focus on the goal.

Another huge challenge was gaining the right people. Aviation is a quite hermetic industry, because usually there is one, maybe two airlines in a country. There were not too many aviation experts in Poland, and we decided to invite young, talented people to the company. They took an analytical test even before the interview. Fortunately, we were able to sell the magic of the sector - aviation is a sexy, modern business with greatly recognized brands, so we were able to attract ambitious and smart people. My dream was to create a company which was run like the top consulting firms of the world: take the most brilliant people directly from the university and then train them quickly and let them do things, empower them, give them responsibility, so they can grow. Looking now at the commercial staff at LOT I can proudly say this is the case.

In times of ubiquitous change what leader is needed?

Flexibility is extremely important. COVID affected aviation spectacularly, we had to flexibly look for other sources of revenue, protect and motivate our people and use the time in a smart way in order to get stronger in the post-pandemic reality. In aviation geography plays an important role too: unfortunately, after COVID the war in Ukraine started which influenced both our operations and network as well as impacted Poland as a tourism destination thus also our revenue streams. LOT needed to adopt by opening new routes, by fine-tuning the sales market structure.

The leader's flexibility also means noticing a generational change; the new generation requires different communication and approach. My role is to understand, learn, not complain, and try to blend them into my ways. It is also important that the leader has the courage not to turn a blind eye to the weakest employees - a lack of reaction is extremely demotivating for the others, one must not accept negative attitudes and behaviours.

Furthermore, the leader must also be aware of how enormous the impact he/she can have on people through his/her own example. The leader is a role model - how can I expect the punctuality of airplanes if I am not punctual? How can I expect clean planes and a sense of ownership from employees if I do not bend myself to pick up a piece of paper lying in the corridor to throw it into the trash?

Finally, there are a lot of brilliant ideas but what is important it the end is the ability to deliver. And not only once, but repeatedly, task after task, project followed by another project, yearly results, five year plan, etc. That is the environment I am used to working in. And this how my team works.

Michał, what did you learn for yourself during this period of enormous changes?

One accumulates technical skills with great effort, and then it turns out that you simply have to apply the simple rules of life when working with people - smile, kindness, respect, optimism -  support in stressful situations. If I regret something, it's how late I started coaching sessions with you. Today I appreciate the importance of developing such subtle soft skills. It is not enough to be just a subject-matter expert, then you work as an individual. When you are super capable, then you work for two, but if you want to achieve something great, you work through an army of people: the entire managerial team, and their subordinates and the subordinates of the subordinates. All of us with the same approach and common goals.

Do you know what I consider my success today? It is the success of my people I have the privilege to work with.