Reach for the stars
Gareth Evans’ career has taken him from a Big Four firm in the UK to running a low-cost, international airline in Australia. As Nick Martindale reports, it’s something he has a real passion for
Gareth Evans’ route to CEO of Australian low-cost airline business Jetstar Group owes much to a decision he took back in 1994 while working for KPMG in Birmingham, which had relatively little to do with his career or accountancy as a whole. “I’d been at KPMG for four years and then I had the opportunity to go on secondment somewhere,” he says. “I’d met an Australian girl about 12 months earlier so Australia was the obvious choice, plus a really good friend of mine who had been at university and KPMG with me had gone to Melbourne. But I decided to go to Sydney; it was a two-year secondment initially but it was pretty obvious to me straightaway that this was a great country and I would have the opportunity to stay, so after two years I turned that into a permanent residency.” The lady in question is now his wife, and has been for 21 years, he adds. Originally from Leicester, Evans studied maths at university before a stint working for a small plastics moulding business, after which he joined KPMG and took his ACA qualification.
“I was always quite numerate so I was naturally drawn towards that sphere,” he recalls. The ACA qualification gave him a structured understanding of how a business operates, he adds, while working in multiple departments at KPMG helped him develop skills needed to work with different teams and personality types. After a while, his desire to make a difference and do something more practical meant it was time to move on from KPMG, and moving into a business environment seemed the logical choice. “My natural disposition was to go out there and get my hands dirty,” he says. The opportunity arose to join downstream petrol firm Caltex, which had recently been acquired and which was a client of KPMG.
“It was an organisation and people I already knew well, so it was a very easy transition out of the profession and into the world of business,” he says. The opportunity to join Qantas – parent company of Jetstar Group – came a couple of years later in 1999, when Evans was approached by a head hunter in connection with a group finance role. “It came at the right time for me because I’d made the decision that it was time to move on,” he recounts. “It was a really good company but there wasn’t a lot of ability to influence the outcome and that was quite frustrating. If you told me the oil price, the refiner’s price and the FX rate at the beginning of the year, I could probably have told you what the profit was going to be. There weren’t a lot of levers to pull.” Evans set about researching the aviation industry, and says it’s only when you do this that it’s possible to truly understand the size and scale of the market, as well as the opportunities and challenges it faces.
“In Australia Qantas is an iconic brand and it’s probably the best known Australian company around the world, so it was an exciting opportunity,” he says. “It was so big and complex that you have the ability to have multiple careers within the same organisation. I’ve been very lucky in that I’ve been able to have that, and my background and skillset that I’d built up with KMPG gave me some of the skills that enabled me to navigate my way around the organisation.”
His career with Qantas, though, started off with one of the company’s biggest challenges. “Two weeks after I joined, Qantas had an aircraft go off the runway in Bangkok,” he says. “So I was introduced very quickly to the complexities and challenges of the industry. Then we had a new entrant in the market with a completely different business model; Richard Branson turning up with Virgin Blue, as it was then, to shake up the industry in Australia. I joined pretty much as the old aviation world was closing and the new aviation world was opening.” In 2004, Qantas started its own low-cost operation with the launch of Jetstar; something Evans watched with interest from “the premium airline side of the fence”.
Evans started off working in group finance, and worked his way up to becoming CFO of Qantas in 2010, by which point the airline was involved in what he describes as “one of the biggest turnarounds of an Australian company” in response to the global financial crisis. “It was a massive transformation programme and we had to make it match-fit for the new world,” he says. “I’ve also been heavily involved in some significant operational issues; the one that springs to mind is where we had an A380 which had an engine explode on departure from Singapore in 2010, and we grounded our fleet of A380s for 17 days as a result. I was heavily involved in operational decision-making and then dealing with Rolls-Royce in the aftermath.” Other prominent issues Evans and his team faced included the grounding of the company’s entire fleet in 2011 and 2012 after a dispute with trade unions – something he describes as the “single most high-profile industrial event in the history of Australia” – and the recent introduction of the Boeing 787 into the fleet. “It’s never dull and that’s what really drives me,” he says.
“You get up and you don’t know what challenges you’re going to be dealing with. On any particular day I could be dealing with volcanoes, geopolitics, a financial or strategic issue; it’s very varied and stimulating.” In 2015, Evans was appointed CEO of Qantas International; something he found a natural transition. “I’d had a period of time just before I became CEO where I had no financial responsibility at all, and in the three or five years before that I was running big implementation projects like the re-entry into service of the A380s, so I’d experienced elements of it before I got the CEO role in its totality,” he says. “But an airline is such a networked business that when you’re CEO of International you still have to be heavily integrated with your colleagues running the domestic business. So I found it a relatively easy transition because I had been well prepared for it.”
A bigger challenge was to come, however, when he became CEO of Jetstar Group, which comprises Jetstar Australia and New Zealand, Jetstar Japan, Jetstar Pacific and Jetstar Asia, and currently consists of 137 aircraft flying to 87 destinations in 18 countries. “It was a bit different in that Jetstar is more of a standalone business, so I had to make sure that I was focusing the team not just on the here and now and the numbers, but setting the vision and the direction of the business,” he says. “I spent a lot of time in the first three months just going around and talking to people at all levels, but particularly people on the front line. By doing that you get a real understanding of what is working and what’s not, and then you can bring that back into your thinking as you’re setting those short, medium and long-term goals.”
The differences between running a business that can boast a century’s history and one that is just 15 years old were also apparent. “There is clearly a different culture,” he admits. “One is not better than the other, but they’re different. Jetstar has that youthful exuberance and almost start-up nature to its culture, and it’s also very open to change because when you’re 15 years old anything you introduce is going to be an improvement.” The business flew 37 million people last year, with two-thirds of customers flying one-way for less than $100. “It’s opened up huge opportunities for people to travel who couldn’t beforehand, by bringing low fares to the market,” says Evans. “It means people can take an extra holiday or go and visit their loved ones more often, and even for small or mediumsized businesses it opens up more possibilities in terms of meeting suppliers or customers. It’s a huge catalyst for improving people’s lives, and that’s a passion that runs throughout the organisation.”
One of the challenges for Evans has been to make sure he doesn’t introduce complexity into what is inherently a straightforward business model: “Low-cost carriers are really simple, and when you come from a complex airline to a simpler one you have to make sure that you don’t do that, and catch yourself if you are.” Another difference is the customer proposition, which ironically is more complex in a low-cost environment, he adds, in that customers pay a low price for the fare and then choose any add-ons they would like.
“That’s a much more complicated selling model because customers need to be informed about their options around bags, meals and selecting seats,” he says. “You have to be as simple and fair as you can with customers through the selling and the airport process, make sure they understand what they have bought and the proposition that they have signed up to. We make no bones about that because the model is unbundled, and by choosing what they want and what they don’t want we can keep the fares low.” Responding to the market is a constant challenge. “You want good competitors who make you hungry and continue to push you,” he says. “But the aviation market has always been one of boom and bust, so from a competition perspective you really need to get your capacity settings right and to get the right aircraft on the right routes at the right times.” His experience working in a premium airline environment has proved useful here, he says, both in making sure costs do not creep up over time and helping to leverage the scale of the two businesses. Confronting climate change is another major issue for the sector.
“As an industry and an airline we are going to have to address this challenge head on, around sustainable aviation fuel,” he says. “As an industry we need to do a better job at promoting what we have already done but there’s a lot of work still to do.”
The industry is the first to voluntarily commit to an emissions target, and the introduction of 18 A321 Neo aircraft to Jetstar’s fleet – the first set for delivery in 2020 – will help reduce emissions and costs. Qantas and Jetstar have committed to reduce the amount of waste sent to landfill by 75% by the end of 2021, he adds. Outside of work, Evans keeps himself busy with a combination of cycling, playing the guitar and travelling, as well as spending time with his wife and two daughters, now aged 18 and 16. “I’m pretty good at compartmentalising things,” he says. “This is a 24/7 business so anything can happen at any time and you have to be prepared for that, but I’m pretty good in that when I’m at work I’m at work, and when I’m at home I’m at home. You have to be able to switch off.”
Originally published in Economia on 3 October 2019.