It’s not the fastest or the fittest or the strongest that survive, it’s those that adapt best to their environment
Like his brother Domhnal of Avolon fame, John Slattery has enjoyed a meteoric rise through the aviation industry. Now he’s about to take over as boss of the newly-minted Boeing Brasil
CV: John Slattery
From: Ennis, Co Clare
Family: wife Aline and three children
Favourite book: How Countries Compete by Richard Vietor
Favourite movie: First Man
Hobbies: no time for hobbies
John Slattery’s bright office in his spacious Dublin home is filled with pictures of state-of-the-art aircraft. Model planes line the shelves behind his large leather desk and aircraft industry magazines are piled up by his chair. But aside from industry paraphernalia, his office is relatively bare, with scant signs of the overflowing drawers or the wear and tear you might expect to find in the office of the chief executive of Embraer Commercial Aviation and soon-to-be chief executive of Boeing Brasil.
Based out of Embraer’s base in Brazil, Slattery only rarely gets the chance to use the office. On top of that, during his infrequent trips back to Ireland, work is bottom of Slattery’s agenda, with his family being based in Dublin and his roots calling him out west to old friends and family in Co Clare.
Slattery started his career in international financial services, quickly transitioning to the aircraft leasing side of the industry. His meteoric rise through the aircraft industry gained him a reputation for unwavering professionalism, sharp insight and uncompromising efficiency.
His stewardship of aircraft manufacturer Embraer’s commercial aviation division for the best part of the last decade and his recent appointment as the head of the new Embraer-Boeing joint venture is yet another example of an Irish executive operating at the pinnacle of the global business community.
But Slattery is not the only person in his family to have reached these heights in the aviation industry. Domnhal Slattery, his older brother, is chief executive of Avolon, the hugely successful aircraft leasing company.
“Well, I guess it does run in the family,” Slattery laughs, “given my older brother is very successful in the aircraft operating leasing business. And, in fact, the initial entrée for me into aviation was working with Domhnal.”
“But if we go back even before then, where did we both get the taste of the kerosene, the K1? It came from Shannon Airport.”
Slattery was born and raised in Ennis, Co Clare. His father had a wholesale business that serviced Shannon Airport. When they were just children. John and Domhnal would travel with their father down to the airport where they would stand frozen, faces pressed to glass, awestruck by the aircraft and marvelling at the transatlantic journeys the planes were about to embark on.
“Seeing the 747 100s – as they were then – parked, and knowing that in a matter of just a few hours they would be in New York where Auntie Mary lived, and the whole thing, you know when you’re that age.
“We’re talking the mid 1970s, and the late 1970s. These were dark times, so to have something as extraordinary as seeing the Pan Am aircraft, or the Aer Lingus aircraft and knowing that they were flying across the Atlantic Ocean to America – which was the land of all good things in many ways back then – left an indelible mark.”
Slattery received his MBA from the University of Limerick and went into financial services, working with Woodchester and then Davy Stockbrokers before taking a leap of faith in 1996 by starting a company with his brother Domhnal. International Aviation Management Group (IAMG) was an investment banking services company which proved so successful that it was sold to Royal Bank of Scotland for €45 million in 2001.
Slattery became managing director of the newly branded RBS Aviation Capital - now SMBC Aviation Capital - and was responsible for leading the bank’s commercial aircraft leasing and asset-backed lending to airline customers across the Americas. During his time there, RBS Aviation was the third largest aviation lessor in the world and Slattery was financing a range of aircraft clients, including manufacturing giant Embraer.
“I started financing Embraer aircraft just as we were growing out our broad portfolio. Little did I know then that, all those years later, it would lead to me joining Embraer.”
Having impressed the right people, Slattery joined Embraer Commercial Aviation in 2011 as vice-president with responsibility for customer finance, asset and risk management. By 2016 he had been appointed chief executive of the entire operation.
The Embraer-Boeing relationship went back 15 years. By the time Slattery came into the picture, the relationship had become very strong and merger talks grew organically from a sense that there was both a commercial and a cultural fit between the two organisations.
“That culture fit was based on a mutual respect between the two organisations,” he says. “Boeing, I believe, had and has a very deep and profound respect for Embraer’s engineering capability, both in terms of the quality and the speed and the efficiencies of Embraer, based on our nimbleness, our ability to develop new aircraft and get them certified and bring them to market in a timely fashion.”
Just two months ago, Embraer announced that it was selling an 80 per cent stake in its commercial aviation division. The deal is worth €3.6 billion and no sooner was it announced than Slattery was named as designate chief executive of the new venture. The new company was named just last week as Boeing Brasil.
The deal still has to make its way through competition approval processes in Brazil, US, China and the EU, but Slattery is confident that it will be closed out by year-end.
He thinks he will be able to grow the new business in line with the additional resources and new markets that Boeing will give him access to.
“With the transaction, I get broader market access, all things being equal,” he says. “I get access to a deeper wider balance sheet that will allow me to develop new products for the market which is great for the customers.”
Slattery has some views on the wider air industry as well. With so much consolidation happening and airlines like Wow Air going bust, Slattery thinks it is a period of creative destruction for the industry.
“This does feel like the softest landing of a cycle that I’ve ever seen. For sure, we are seeing some airlines go to the wall; but, you know, in the Darwinian theory, it’s not the fastest or the fittest or the strongest that survive, it’s those that adapt best to their environment.”
The aviation industry has come in for heavy criticism for its record on the environment. Taking Europe as an example, aviation carbon emissions grew 4.9 per cent last year. Carbon emissions from European aviation soared 26.3 per cent in the last five years - a larger growth than any other EU emissions source. This is from the very carbon-intensive burning of kerosene for jet fuel.
Slattery thinks this will change based on basic cost-benefit analysis, new technologies and changing market demands.
“In many ways, necessity is the mother of invention in addressing this question,” he says. “Fuel has always been, and continues to be, the number one cost item for airlines around the world.”
“If you look back over the last 20 to 40 years, the airlines are generally a super low-margin return business, anywhere between 0 and 3 per cent. We’ve seen exaggerated returns in the last cycle, and in some airlines that may be perpetuated into the next cycle and the cycle beyond. But generally speaking, it’s a very low margin business. Therefore, given oil is the number one cost item, anything that would bring down that burden on the airlines, they will embrace.”
The recent tragic Boeing 737 Max crashes have shaken Boeing and thrust safety in aircraft manufacturing into the spotlight. As head of a major new manufacturing division of Boeing, Slattery says safety is always the first consideration.
“I know that all of my colleagues and my competitors consider safety as the number one criterion, not only for our existing products, but as we continue to develop new products, safety is the number one feature. Any loss of life is, it’s very difficult and it’s also very difficult for us to even talk about as manufacturers.
“I’m not going to speak for Boeing or for the Max. I’m not an employee of Boeing and the Max is not one of my aircraft. But I do have full faith and confidence, because I know that Boeing has always put its safety above everything else. That’s been its mantra.”
Slattery admits he has had opportunities that others would only dream of, including attending Harvard Business School shortly before being appointed chief executive of Embraer. But despite spending time in such a renowned institution, he maintains that it is his time at the Kemmy Business School of UL – led by dean Philip O’Regan – that has informed his approach to business the most.
“While I did find Harvard unquestionably transformative, the bedrock of my thinking when it came to business was very much solidified by my two years at UL, an institution that continues to grow,” he says. “I have the world of respect for the University of Limerick, and I continue to be involved in the university today as an adjunct professor in the business school.”
Slattery’s pride in his home region is clear as he passionately turns his attention to the various “world-class” institutions that dot the west coast. But choosing his favourite proves to be quite an easy task.
“Given my professional focus, I can’t help but look at what is a jewel in the crown of the west, which is the International Airport of Shannon. I always like to give a shout-out to Rose Hines, who’s the chairperson of the Shannon group. The leadership that she and her team, her executive team have done in rekindling, refocusing, re-energising and really the jewel that is Shannon Airport. I would like to see more connectivity from Shannon.
“It’s difficult - and I appreciate this difficulty because this is my business - for airlines wanting to open up connectivity in a relatively smaller cosmopolitan area like Shannon in Co Clare, you know, maybe Limerick and Galway as the catchment area.
“But as I look at the airlines around the world, as I look at their franchise footprints, their networks, when they put frequency into new airports, it stimulates business.”
Slattery believes that the Irish government has done a great job getting the economy back on track over the last few years. He calls himself a proud capitalist and lavishes praise on Ireland’s “big thinking” economic model of looking outwards, drawing in investment and playing to our strengths as a small open economy.
In his experience, the Irish have unbreakable spirits and unmatched self-deprecating humour. He believes that is a large part of what endears us to people all over the world and has led to so many, like himself, achieving such global business success.
“I think, at its core, people like doing business with the Irish,” he says.
“Because we tend to be straight shooters, we have a reputation of being honourable business people. We have a reputation of being efficient. We tend to get to the point. We have a reputation of being pragmatic.
“We’re very productive as a nation. We work, we like to work, we’re good workers. We’re also innovators, and we’re entrepreneurs. And you know how best we capture that.
“I can just see an enormous level of respect around the world for Ireland and what it has done, and for the Irish people. And that’s hard won; that doesn’t happen by accident. It’s won person by person, and day by day.”