The Hilary Clarke Interview: When is he going to land?

Instead of winding down to retirement, BAA's chief is flying as he pursues growth plans at Stansted
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The Independent Online
FOR SOMEONE who is about to retire, Sir John Egan, Britain's airport chief, is showing no sign of winding down.

"It's all go here," says the silver-haired chief executive of BAA, checking his gold watch as his chauffeur-driven Daimler speeds away from Stansted airport towards London.

Indeed it is and at 59 Sir John is as energetic as ever. He does 45 degree twists to point out the new cargo warehouses and a new airline office growing up in the airport's environs.

Last week BAA unveiled plans to double the Essex airport's passenger capacity to 15 million, something you can expect Sir John to wax lyrical about tomorrow when the company reveals what are expected to be steady first- half profits.

Sir John, who took the top job at BAA in 1990, has turned the company into the world's largest commercial airport operator, running seven airports in the UK and as many again abroad. He is tickled pink by a recent article in an Italian newspaper pointing out that the once notoriously chaotic Naples airport, recently acquired by BAA, is now the best run in Italy. BAA has, the article read, turned the airport from "a disaster zone into a golden goose".

But then that's what Sir John, who started the retail revolution in airports, is best at. "He's extremely good at spotting opportunities and then developing them," says one City analyst. "And he is usually a success."

Back in the Eighties, Sir John became a household name when, as head of Jaguar cars, he took a struggling business but still a world-famous company, improved its performance, and then successfully floated it off from British Leyland for pounds 293m, gaining a knighthood from the Thatcher government into the bargain. He then proceeded to talk up the car company and sold it to Ford of the US for pounds 1.6bn, making the company's shareholders very happy indeed.

Sir John himself scooped pounds 2m from share options. "I was very proud of what I did with Jaguar because there was no way the company would have survived if someone like me hadn't come along and got it moving," he says.

A more recent example of Sir John's talent for spotting opportunity in adversity is the way BAA has handled the rise and rise of the British pound.

"We were basically exporters selling to foreigners going home," says Sir John. "But with these very high levels of sterling, we've had to learn to sell to Brits. And I have to say we have been very successful."

What BAA did was to change the emphasis of the stores that opened up at the airports from sellers of luxury items to "bread and butter" ones like books and shirts. "Don't forget, something like 50 per cent of the people in Terminal One [at Heathrow] are there more than once a month. They are in our terminal more often than they are in the high-street, so no wonder we can sell to them," he says.

But Sir John, with his mischievous charm, could sell snow to an Eskimo. He will need those skills again to bump up sales lost when duty free in the European Union is abolished early next year. It is an issue that annoys Sir John not out of principle, but because of the way it has been handled by the officials in Brussels.

"The idea was duty rates were going to converge, but there has been very little real evidence of convergence. In Italy and Spain, alcohol is seen as a food, so it has very little tax on it, and in northern Europe it is seen as a dangerous drug, so they are taxing it out of view. Where is the convergence between nothing and 400 per cent?" BAA also owns Duty Free International, the world's biggest duty-free retailer.

Stansted may be steaming ahead but Sir John's attempts to relieve congestion at Heathrow are being frustrated by the public inquiry into the building of a fifth terminal at the airport, already the longest public inquiry in British history. Only last week, BAA announced it was putting the design of the terminal on hold because it did not expect the inquiry to end until mid-2001.

Nevertheless, Sir John is optimistic that the new terminal will eventually be approved. "I don't think anybody has made any strong case against us, so I believe the pragmatism of our British system will win in the end," he says.

Meanwhile, BAA is doing its best to prevent the airport from grinding to a halt under the sheer volume of traffic. Check-in facilities at the Paddington terminal of BAA's new super-fast Heathrow express train, which has cut the journey time from the airport to central London to 15 minutes, should help take the strain.

Sir John was born at the outbreak of the Second World War in Lancashire. After the war, his family moved to Coventry and it was there he gained his first taste of the car industry; his father was a second-hand car dealer.

After graduating from Imperial College in London with a degree in petroleum engineering, Sir John got his first job with Shell, drilling oil wells in the Middle East.

"I noticed that petroleum engineers tended to be very poor managers, so I decided that if I was going to be a half-decent manager I would have to teach myself."

So, at the age of 30, Sir John went back to school. He was a member of the maiden class of the London Business School's masters degree in business studies. One of his fellow classmates was Derek Lewis, the former head of the prison service, who resigned following a series of high-profile escapes.

The new qualification paid off for Sir John, who was offered a job by General Motors the day after they heard him give a talk on the value of an MBA.

Today it is for his management skills that Sir John is highly esteemed in the business world, although the victims of the mass redundancies he instigated at Jaguar in order to turn the company round are unlikely to agree.

But Sir John's style is a lot less less thrusting. Indeed he is even critical of some of the more extreme contemporary management styles.

"I've noticed that industrialists do seem to manage better than other sectors," he says with pride. "I've been surprised at how relatively mediocre the management seems to be in the City. Especially when it comes to people it really is very, very poor. All they talk about is slashing and cutting. At BAA we've improved our productivity by 80-odd per cent in the last six to seven years, but we haven't made a big song and dance about making people redundant. We offer voluntary redundancy schemes and introduce productivity schemes; what better incentive for people?"

His management of himself is decidedly low-tech. His daily agenda consists of a printed list stuck on the outside of a paper file. Ask him if he's hooked up to the internet and he becomes almost apologetic. "I keep putting off my computerisation. I keep saying I've got a good memory so I don't really need to look at all that stuff. I am not a natural for the computer. But I keep meaning to put more effort into it."

That said, he appears to be a highly organised man, who has a 7.15am jog with his wife, a former journalist, around Regent's Park every morning.

"It's a lovely way to start the day and you actually meet quite a lot of people,'' says Sir John, who lives opposite the park and who counts the actor Tom Cruise among his neighbours. He has two daughters, aged 26 and 30, one who is a hotel designer and another who works for Time magazine.

Despite his hectic schedule, Sir John - whose passions include walking and skiing in Switzerland where he has a chalet - also knows how to relax. "I never work at the weekends unless I have to go somewhere. You have to have capacity to spare if there is a crisis. It is all right running so fast, but if there is a crisis you can't deal with it properly. And in the aviation industry there are crises, you have to get used to that.'' He says he always has a book on the go and likes to play the piano.

But what is Sir John going to do when he leaves BAA next spring, apart from his new hobby, golf. "I'm getting some plans together,'' he replies elusively, pointing out that his chairmanship of the property company MEPC will keep him busy. "There could well be other things I will be doing, but I haven't put a great deal of thought to it yet." It is hard to see Sir John taking a back seat for long.

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