Three-and-a-half years ago, Martin Sedlacky started to work at airBaltic with a huge ambition – getting the struggling airline back into business. Now, airBaltic has been operating with a profit for two years in a row. Well organized, hard-working and with great charisma, Sedlacky talks about the main challenges for airBaltic, offers some travel tips and reveals his love for music and aviation.

How did you start your career at airBaltic?

My former employer, The Boston Consulting Group, was hired to see if airBaltic could be a viable company, following major losses in 2011. I agreed to manage the project despite wanting to stay in Prague after spending a year in Asia. Martin Gauss, airBaltic’s president and CEO [Chief Executive Officer – ed.] understood the urgency of the situation and organized daily, rather than weekly meetings. I never had experienced something like that in almost seven years of my consulting career. I admired his drive and the dynamics among us was good. At the end of the four-month project, he invited me to join him and CFO [Chief Financial Officer – ed.] Vitolds Jakovlevs as an executive board member responsible for operations.

What induced you to stay with airBaltic?

First, the big challenge. Second, I enjoyed working with Martin and Vitolds. Third, the freedom and support provided by the Ministry of Transport as our shareholder. Fourth, I really like it here in Latvia – the nature, the culture, the people, the food. When I came to Riga, it was supposed to be only a seven-week project. I never thought I would stay here for three-and-a-half years. But I do not regret it. I have learned and done so much. It is a wonderful feeling when you put a lot of effort into something that leads to results. I also try to learn from my mistakes along the way.

You were one of the architects of the airline’s Reshape project. What was it about and what were the main goals?

Reshape defined how to bring airBaltic back to profitability and make the airline sustainable in the long run. The plan covered many organizational aspects, including changes in the company management, the introduction of corporate governance and internal audits, the launch of centralized sourcing and tendering, and the renegotiation of all major contracts. We also had to reconfigure our flight networks, ensuring a focus on destinations with the highest profit contributions. We improved the use of our assets and implemented extensive cost reductions in order to compete with low-cost airlines. Ticket sales had to be increased in a situation of increased competition and declining market yields. In addition, we had to set up a contingency plan to deal with unfavourable key external factors, such as fuel prices, exchange rates and weather conditions, as well as regularly monitor and adequately react to competitors’ actions. The Reshape plan is over 300 pages long, with every page addressing a specific issue. We left nothing untouched. For example, we hired 10 students who constantly reported to us about flights that were not being booked for one reason or another. We went through every cent that was spent, from big items like leasing, fuel or maintenance to how much we pay for the lights in the toilets. Still, creating a plan is the easiest part. The main challenge of Reshape lay in its execution. We have implemented the plan to a large extent, but not completely. Things change quickly and what you plan out at one point can look entirely different a year later. On the other hand, we managed to become the world’s most punctual airline and to implement a state-of- art meal pre-order service.

How would you describe the current situation in the European aviation market and how do things look for airBaltic?

In the short term, aviation in Europe has become a very tough market, because traffic between Russia and Western Europe is much lower than before. This has lead airlines to pull their capacity back to the west, creating overcapacity and thus pressure on ticket prices. All of the airlines around us have taken major hits to their revenue and profitability. We have also reduced our prices by more than 10% because of this increased competition. The benefit of lower fuel prices has unfortunately been offset by a strong US dollar. In spite of this, airBaltic managed to end the year 2014 with a profit, even if it was only a few million euro, without selling any of its assets. In the long term, there seem to be structural changes in the aviation sector. The regional infrastructure in Europe is disappearing, as the low-cost model implies 200-seat aircraft that either cannot be deployed on less-travelled routes, or only a few times a week at best. Regional airlines are disappearing because the trunk routes that contributed to their profits are being cherry-picked by low-cost airlines. As a result, passengers travelling between big cities benefit from very low fares, while those who live far from the big hubs have difficulty travelling, even if they are willing to pay a premium.

What are airBaltic’s advantages?

Flexibility and a strong brand image. We are not a big airline with 10 layers of management and a complicated decisionmaking process. If we see that something is going in the wrong direction, we take immediate action. I have worked with other airlines before as a consultant and have been pleasantly surprised by the quality of the people here at airBaltic.

How do you like living in Riga?

I like Riga a lot; that’s also why I’m still here. In some respects, Riga is not much different from Prague. The nature here is amazing, the food is great and the people are professional and really nice. They are little bit more reserved than in Prague, but once you get to know them, they are very kind and warm. I enjoy my drive to work every morning from Mārupe, which is only 10 minutes away from the airport and 15 minutes from Jūrmala, with its beautiful white sandy beaches and cosy restaurants. I am always taking my friends and parents there.

What would you suggest to airBaltic passengers who are planning to visit Riga?

I would suggest visiting the cute city centre. I may not be a big fan of architecture, but Riga has quite a lot of interesting sights. Then visit some of the numerous restaurants with great cuisine, the cosy wine studios, the hip coffee places and the good bars and clubs. It is amazing how-well developed this scene is, considering Riga’s small size. And the nature, of course. I would suggest taking a car and going to Jūrmala, Sigulda or anywhere outside of Riga to grasp the beauty of the countryside, which is just minutes away from the city. It is definitely worth a weekend trip or an entire week to cover the Baltics as a whole.

What would you suggest for those passengers who are planning to visit your home city of Prague?

My favourite thing in Prague is the walk from Wenceslas Square up to the castle. This walk can take a full day if you really explore the city. Stop by some coffee places and you still won’t get enough of it. Enjoy an excellent culinary experience at the Valoria restaurant right at the foot of Prague Castle, have a glass of wine in the castle vineyards or a coffee at the Bellavista restaurant. Each of these places offers a beautiful view of Prague. In the evening, enjoy cocktails served to live piano and saxophone music at Black Angle’s bar by Old Town Square.

What do you like to do in your free time?

“Free time” is an interesting term for any expat, I guess. My work days are often busy until the late evening and as my brain also functions better during the second part of the day, I tend to do most of my thinking in the evenings. I never get into a situation where I have nothing to focus on. Whenever I can, I enjoy evenings with good food and friends in the centre of Riga or sports like squash or beach volleyball. On weekends, I usually fly away to some of the many beautiful destinations that you can enjoy with direct airBaltic flights.

I heard that you are quite a big fan of music.

Music is a great escape for me. I listen to music every day and I guess I’m getting older, as lately I’ve taken quite a liking to jazz and blues. [Laughs.] I recently enjoyed Steve Tyrell performing to a very limited audience in San Francisco and that is how I imagine people listening to Frank Sinatra in the old days. I like all mainstream music and also enjoy festivals like Tomorrowland, Balaton Sound and Positivus, of course.

Do you play any instruments yourself?

Oh, no. I don’t know what would be worse – me singing or playing an instrument. [Laughs.] My artistic expressions are quite a disaster. That’s a shame, because I have always dreamt of learning how to play the saxophone.

It’s never too late to fulfil a dream!

Speaking about dreams, very few people know that my first choice of studies was not even close to economics. I wanted to become a jet fighter pilot. Unfortunately, I couldn’t do that because of my height. Officials in the air force told me that I was welcome to do my studies, but that I would never be able to fly because I was too tall to fit in the fighter jets. As a result, I changed my field to economics. My life has taken such turns that now I work in an airline, which gives me a great opportunity to get a step closer to fulfilling my dream. Thank you for flying with us!