With more than 35 years’ experience, Dr Adam Pilarski, Senior Vice President, Avitas, has become an iconic figure within aviation. He talks to Yana Palagacheva about the early days of his career and the evolution of the industry.

As featured in Airfinance Journal Column PILARSKI SAYS

How did you end up in aviation?

By accident. I was an academic and when kids do well in school they continue – they get more and more degrees and then they figure out they will teach more people to be just like them. I was teaching business people and I figured out that actually I don’t know enough, so I should work for a business, and I accidentally stumbled into aviation by chance and I loved it. So I am not one of the many people in aviation who have aviation fuel in their keratin and their blood. I am an economist who got into it. People tell me that airplanes are marginal costs with wings – and that’s how I thought about it. I am not a pilot. I never wanted to be a pilot. Unlike many of the great people in aviation, it wouldn’t make me happy to be a pilot.

How did you get your first job?

That was 35 years ago. I decided that I had had enough of academia. I planned to go back when I was old and useless, but in the meantime I wanted to learn how business operates. So I sent about four letters and surprisingly I got four answers for interviews. All the interviews went well but particularly the one with McDonnell Douglas, and I loved the place. I just loved the industry – the subject matter. When they called me and said they wanted to offer me a job, I said: “I’ll take it.” The lady from HR tried to teach me to be professional and said: “You are not supposed to say I’ll take it. You are supposed to say I’ll think about it and then come back with a counter offer to us.” Then she said: “Let’s do it again. We want to offer you a job.” This time I said: “Let me think about it. OK, I thought about it. I’ll take it.” The job was as an economist. Because I grew up in Europe, McDonnell Douglas decided that I’d be the Asian analyst, which I loved because it gave me a chance to learn the market. My life there was applying economic principles to business problems, and I did very well. I got promoted and I became a chief economist, and like many good economists I tried to solve problems in everything from sociology, biology and psychology, to name a few.

What were the different steps in your career?

I am a boring person so it is pretty easy. Before aviation I was in academia as a professor and researcher. I then worked for McDonnell Douglas until we were liberated by Boeing in 1997. So, I probably would have continued working there forever, but the job disappeared. So the option was move to Seattle and work for Boeing or do something else. Staying at a job in southern California with McDonnell Douglas was no longer possible, not least because I advised our owners and management on the sale of McDonnell Douglas. I think this was a good move for everybody, but I talked myself out of a job. I am not complaining, but in 1997 I had to look for something else to do and I moved to Avitas. I have been there since then –- so basically after academia I have had two jobs. I am happy. I was happy at my previous job. I don’t change jobs easily.

What is it about the industry that made you stay and not look beyond?

A few things. First, it is an interesting industry where economics works. You can use economic principles; understand what is happening and help people. It’s a good industry worth help. Second, it’s an industry that is quite small, where people know each other. But it deals with large amounts of money, and because of this personal relationships are important. I always tell the truth – that’s one of my major faults. I am very straightforward. That’s good in the long run. People may not like to hear it at a given time, but they respect it, and when you make decisions that are worth hundreds of millions of dollars, you actually want to be able to trust the people you are consulting with, people who will tell you the truth. So you develop these relationships – develop trust and that works well. Another thing really is about how humans function. If you are successful in something, you like it. For example, at McDonnell Douglas I had a top group of economists mainly with PhDs, who I kind of resurrected and got them back to real life from academia. We extended economics into other areas, including manufacturing processes. We talked to people who had a healthy disbelief in any scientific matters, so that when we showed them how to improve things, they were astonished that it worked. So you do all this and if you are successful you like it – and you say: “Oh, that’s a great industry”.

You’ve been in aviation for more than 35 years. How has the industry changed since you started?

At first sight there appear to be many changes – there are always new players; there’s new technology. When you look at it like this, everything is new. But if you look at it the way I do, from the perspective of human behaviour, the business is kind of similar. You always have very basic ideas: you have a good idea for business and you need good implementation. You have to be able to see reality and be flexible in adapting to it. Reality is different today – techniques are different. So my part in this world is to tell people how realities are changing and that includes political developments, using more economic thinking. We went from state enterprises running it [airlines] to more economic thinking, looking for profit. You have to think what the outside reality is, what is the idea that I have. If you have a brilliant idea but implement it badly, it won’t work. However complicated a business is, the Pilarski rule applies – if you make money it’s good, and if you don’t it’s not good and eventually you’ll go out of business. Obviously things are changing, but the new people in the industry will be faced with the similar basic ideas: do we have a good idea? Do we have a product that makes sense and are we good at implementing? Will we have things that work? Will we provide parts on time? Will we have product support you need? I try to simplify the answers, which does not mean I don’t do deep quantitative analysis, but people don’t want to hear this. They don’t want to get bored by a whole bunch of mathematical formulas. However, if you can find a way to appeal to them, preferably with humour, then they will wake up and listen and say that’s interesting. That’s why I tie things to personal stories, and to family.

What are the most memorable events and biggest turnarounds since you joined the industry?

One of the huge changes is in Asia. Of course, since I started in the early ’80s as an Asian economist for McDonnell Douglas I quickly figured out that the Asia market, and especially China, would increase tremendously. The Asian share of world economy was growing quite fast but the share of traffic was way behind – and if you look at Asia, a lot of the travel has to be done by air because of the distances and geography. So it is not like Europe where trains can work better. So I quickly figured out that all of the major developments would be in Asia, and I remember people laughed at my predictions. In hindsight one of the biggest changes is the tremendous growth in aviation in Asia. But some people went to the other extreme, suggesting nothing but Asia mattered. I argued against this, suggesting that Asia would be increasingly important for aviation but that it was not a question of all or nothing. Some people were saying that Airbus and Boeing would go out of business and that everything would be produced in Asia. I was saying no, eventually it will happen, but it will take time. Another major event was 9/11. No one could have predicted it, but what’s interesting is that after 9/11 I wrote a note to our customers predicting what would happen to traffic, and I was very accurate. That’s why you have to be flexible, because you will never be able to predict unpredictable events, but if you are ready and have the analytical tools you can change things when these events happen.

As featured in Airfinance Journal Column PILARSKI SAYS