When Friedrich “Fritz” Joussen started at Tui in 2012, he was attracted by the challenge of joining a company in the throes of crisis.
Activist investors were pushing to break up the ailing travel group, cost savings were needed to offset an austerity-inspired slowdown in the sector, and the long-mooted merger of Germany-based Tui AG and its UK-based sister tour operator Tui Travel had repeatedly failed to get off the ground.
“If you don’t have a crisis, if you don’t want to change . . . you don’t need leaders,” says Joussen, speaking on the eve of his final board meeting as chief executive from the company’s headquarters in a sleepy business district in the German city of Hannover. “That said, I thought that would have been the biggest crisis in my career.”
At the end of September, Joussen left Tui after almost a decade at the company — most of which has been spent in the top job. In person, he cuts an imposing figure at 6ft 7in tall (2m), but his size is offset by a broad grin and relaxed demeanour.
Joussen grew up in a middle class family of five in the German port city of Duisburg, a coal mining and iron and steel manufacturing centre, where his father worked as a legal adviser for steel group Thyssen (before its merger with Krupp). In his youth, he was academic. He attended Landfermann-Gymnasium, one of Germany’s oldest schools which traces its origins back more than 450 years.
Within his first two years at Tui, Joussen had wrapped up the stop-start merger negotiations, creating what remains the world’s biggest tour operator, which employed more than 70,000 staff at its height (now closer to 40,000 people).
But he suspects his greatest legacy will be simply keeping the company afloat when the Covid-19 pandemic struck. “Regulation brought our business to zero,” recalls Joussen. “In my professional career, running a company without revenues is the most difficult spot I’ve been in.”
In the three months to the end of June 2020, Tui reported revenues of just €75mn, down 98 per cent on the year before. For the full financial year, the company booked a €3.2bn loss. It survived only thanks to €400mn in cost savings and nearly €5bn in bailout loans from the German state. Only this year did the company report its “first broadly break-even quarter post-pandemic”.
Joussen has been replaced by Tui’s chief financial officer, Sebastian Ebel, who Joussen first met when running Vodafone’s German division.
Joussen was on a Caribbean holiday in January 2020 when he first heard about the novel coronavirus and the ensuing lockdown in the Chinese city of Wuhan. However, he was initially unfazed and so were Tui’s customers — January and February 2020 marked record highs for bookings.
But by mid-March, just hours before Germany closed its borders in an attempt to halt the fast-spreading virus, Joussen gathered his executive team to ask a simple question: “How much money do we have in the bank?” “These are things you don’t usually ask as a CEO,” he adds.
Joussen first worked as a software engineer in the US before joining the telecoms division of the Düsseldorf-based Mannesmann Group, which was later taken over by Vodafone. He then climbed the ladder to run Vodafone Germany.
The first half of Joussen’s career at the vanguard of the booming telecoms industry was plain sailing. “It was always next record, next record, next record. You just needed to organise growth,” he says.
Joining Tui marked a significant departure for Joussen. He joined a lossmaking company and as a newcomer to the industry faced a lukewarm reception from some in the travel sector.
But Joussen saw his outsider status as an advantage. “When you come from the outside, sometimes you have the benefit of not being too much in the details,” he says. He could see the merger and the company’s restructuring from a “10,000m perspective” which allowed him to bypass the doubters who said “this is not possible, this cannot be done”.
Since his childhood, Joussen has been unafraid to go it alone. A solo trip to visit relatives in the US at the age of just 13 stands out as a turning point in his life in which he conquered anxiety.
Peter Long, an industry veteran who first ran Tui Travel before serving as chair and latterly deputy chair of Tui until last year, told the FT at the time of the merger that without Joussen the tie-up “wasn’t going to work”.
Joussen then went about overhauling the company’s business model. Instead of trying to beat platforms such as Airbnb at their own game, he invested in hotels and cruise ships to create a vertically integrated business model. “You have to have a good strategy and then you need to talk a lot” to investors and colleagues, explains Joussen. “You need to have good arguments.”
The ultimate testament to the success of Joussen’s shake-up of the company is that it did not face the same fate as rival operator Thomas Cook, which collapsed into liquidation in 2019 after 178 years of trading, he says. “Particularly compared to Thomas Cook who didn’t do these steps and became more and more under pressure from the digital competitors, we performed enormously well,” says Joussen.
But despite the strong position he had put Tui in, Joussen was “not sure” the company “could survive” when the pandemic hit. For the first few weeks of the crisis, he slept only a few hours a night.
His schedule was reduced to a liquidity meeting in the morning and a cost meeting in the afternoon, interspersed with hours upon hours of calls to investors, banks and government ministers.
He says he focused only on the short term and the things he could change, extracting a lesson from his chess coach during his teenage years. “When you make a move and you hit the clock, the move is done,” he says. “The best way of losing a chess game is when you think about things you cannot change.”
Joussen attributes the company’s success in weathering the pandemic to the close-knit team he forged. “Companies are not about systems and processes, they are about people,” he says.
Ebel is not the only board member to have a long history with Joussen. Three other board members have been working with him for the best part of two decades.
“We jointly got out of the pandemic,” says Joussen. “When teams are under pressure, it’s a chance to achieve spirit because people will stand together and fight.”
After the first wave of the pandemic, heartened by the support of the German state, Joussen was assured that he had secured Tui’s survival. But he was surprised by how long the crisis dragged on.
“They wouldn’t have financed us if we were not a good company before the crisis . . . so the state had enormous trust that we were a good business and able to repay,” he explains. “If they had the trust, why shouldn’t we have the trust?” Tui still owes about €2bn to KfW, the German development bank.
Despite emerging intact from the pandemic, Tui has been gripped by fresh troubles in recent months.
In March, the German government launched an investigation into the sale of 29.9 per cent of Alexei Mordashov’s 34 per cent stake in Tui after it emerged that the Russian oligarch, who is under sanctions, had transferred the shares to a company owned by his wife. The investigation is ongoing.
Three questions for Friedrich Joussen
Who is your leadership hero?
Lao Tzu’s [an ancient Chinese philosopher] words on leadership for me are the essence of leadership: “When the best leader’s work is done the people say, ‘We did it ourselves’.”
What was the first leadership lesson you learnt?
One of my early managers told me that you should always keep your desk clean; second, whenever you have a decision to make, make it, don’t put it away and think about it again; and third, if you advise people to do something, only advise them if you’re going to follow up with them, otherwise there’s no point.
What would you be doing if you were not a chief executive?
I think I would be a strategic consultant as I like to think about things and implement things. I have a background in software engineering but I was never a good researcher. I’m somebody who gets 80 per cent of something very fast. But when you are a researcher, you need to get 98 per cent or 100 per cent and that takes a long time.
Throughout summer, the airline has also been blighted by flight cancellations and delays, costing the company €75mn. Andrew Flintham, Tui’s UK and Ireland managing director, wrote to customers in mid-June to apologise for “the distress caused”. The energy crisis and inflationary pressures across Europe also look set to spark a consumer slowdown later in the year, which will probably rock the travel sector.
But is that challenge enough for Joussen? Not quite. “The market normalises and you have more normal challenges . . . as bad as flight cancellations or whatever are, you say this is more normal,” says Joussen. “And then the question is how up are you for a normal life?”
Joussen’s £6.4mn a year contract was due to run until September 2025 but he exited it early at the end of last month, however the journey back from the pandemic is not over. “Demand is big, but we still have debt and we still have the state as a shareholder, so there will be a couple of years where we need to repair the balance sheet,” he predicts.
And what is his advice for his successor? “Nothing is less important, less wanted than the advice of a former CEO,” says Joussen. “Everybody does it their own way.”