Tui’s Friedrich Joussen: ‘When teams are under pressure, people stick together and fight’
When Friedrich “Fritz” Joussen joined Tui in 2012, he was drawn to the challenge of joining a company in the midst of a crisis.
Activist investors were pushing to dismantle the struggling travel group, cost savings were needed to offset an austerity-inspired slowdown in the industry, and the longstanding merger of Germany-based Tui AG and its sister tour operator UK-based Tui Travel had repeatedly failed to take off.
“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 of the company’s headquarters in a sleepy business district of the city. German from Hanover. “Having said that, I thought it would have been the biggest crisis of my career.”
At the end of September, Joussen left Tui after almost a decade with the company, most of which was spent in the top job. In person, he cuts a towering figure at 6ft 7in (2m), but his height is offset by a broad smile and relaxed demeanor.
Joussen grew up in a middle-class family of five in the German port city of Duisburg, a center of coal mining and iron and steel manufacturing, where his father worked as a legal adviser for the steel group Thyssen ( before its merger with Krupp). In his youth, he was an academic. He attended the Landfermann-Gymnasium, one of the oldest schools in Germany whose origins date back more than 450 years.
In his first two years at Tui, Joussen had completed the stop-start merger negotiations, creating what remains the world’s largest tour operator, which employed over 70,000 people at its peak (now closer to 40,000). ).
But he suspects his greatest legacy will simply be keeping the business afloat when the Covid-19 pandemic hit. “The regulations put our activity at zero,” Joussen recalls. “In my professional career, running a business without income is the hardest place I’ve been in.”
In the three months to the end of June 2020, Tui recorded revenues of just €75 million, down 98% from the previous year. For the full year, the company recorded a loss of 3.2 billion euros. He only survived thanks to 400 million euros in savings and nearly 5 billion euros in bailout loans from the German state. It was only this year that the company announced its “largely balanced first quarter post-pandemic”.
Joussen was replaced by Tui’s chief financial officer, Sebastian Ebel, whom Joussen first met when he ran Vodafone’s German division.
Joussen was vacationing in the Caribbean in January 2020 when he first heard about the novel coronavirus and subsequent lockdown in the Chinese city of Wuhan. However, he was initially unfazed, just as Tui customers – January and February 2020 scored booking records.
But in mid-March, just hours before Germany was to close its borders in an attempt to stop the fast-spreading virus, Joussen gathered his management team together to ask a simple question: “How much money do we have? us in the bank?” “These are things you don’t usually ask for as a CEO,” he adds.
Joussen first worked as a software engineer in the United States before joining the telecoms division of the Düsseldorf-based Mannesmann Group, which was later taken over by Vodafone. He then rose through the ranks to lead Vodafone Germany.
The first half of Joussen’s career at the forefront of the burgeoning telecommunications industry was smooth sailing. “It was always next record, next record, next record. You just had to organize the growth,” he says.
Joining Tui marked an important departure for Joussen. He joined a loss-making company and, as a newcomer to the industry, faced a lukewarm reception from some players in the travel industry.
But Joussen saw his outsider status as an advantage. “When you come from outside, you sometimes have the advantage of not going into too much detail,” he says. He was able to view the company’s merger and restructuring from a “10,000m perspective” that allowed him to circumvent skeptics who said “it can’t be done, it can’t be done”.
Since childhood, Joussen has not been afraid to go it alone. A solo trip to visit relatives in the United States when he was just 13 marked a turning point in his life in which he overcame anxiety.
Peter Long, an industry veteran who first ran Tui Travel before serving as chairman and then vice-chairman of Tui until last year, told the FT at the time of the merger that without Joussen, the reconciliation “was not going to work”.
Joussen then set about redesigning the company’s business model. Instead of trying to beat platforms like Airbnb at their own game, it invested in hotels and cruise ships to create a vertically integrated business model. “You have to have a good strategy and then you have to talk a lot” to investors and colleagues, explains Joussen. “You have to have good arguments.
The ultimate testament to the success of Joussen’s overhaul of the business is that it did not meet the same fate as rival operator Thomas Cook, which collapsed into liquidation in 2019 after 178 years in business, says -he. “Particularly compared to Thomas Cook who didn’t follow these steps and became increasingly under pressure from digital competitors, we’ve delivered a huge performance,” says Joussen.
But despite the strong position he had placed Tui in, Joussen was “not sure” the business “could survive” when the pandemic hit. During the first 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 and hours of calls to investors, banks and government ministers.
He says he only focused on the short term and the things he could change, learning a lesson from his chess coach during his teenage years. “When you make a move and hit the clock, the move is over,” he says. “The best way to lose a game of chess is to think about things you can’t change.”
Joussen credits the company’s success in overcoming the pandemic to the tight-knit team he has forged. “Companies are not systems and processes, they are people,” he says.
Ebel isn’t the only board member with a long history with Joussen. Three other board members have worked with him for nearly two decades.
“We came out of the pandemic together,” says Joussen. “When teams are under pressure, it’s a chance to reach the spirit because people will stick together and fight.”
After the first wave of the pandemic, encouraged by support from the German state, Joussen was assured that he had ensured Tui’s survival. But he was surprised by the duration of the crisis.
“They wouldn’t have funded us if we weren’t a good company before the crisis. . . the State therefore had enormous confidence in the fact that we were a good company and capable of reimbursing”, he explains. “If they had the confidence, why wouldn’t we have the confidence? Tui still owes around 2 billion euros to KfW, the German development bank.
Although he came out of the pandemic unscathed, Tui has been plagued with new problems in recent months.
In March, the German government launched an investigation into the sale of 29.9% of Alexei Mordashov’s 34% stake in Tui after it emerged that the sanctioned Russian oligarch, transferred the shares to a company owned by his wife. The investigation is ongoing.
Three questions to Friedrich Joussen
Who is your leadership hero?
by Lao Tzu [an ancient Chinese philosopher] For me, leadership words are the essence of leadership: “When the best leadership work is done, people say, ‘We did it ourselves.’
What was the first leadership lesson you learned?
One of my first managers told me that you should always keep your office clean; second, whenever you have a decision to make, make it, don’t put it off and don’t think about it again; and third, if you’re advising people to do something, only advise them if you’re going to follow up with them, otherwise there’s no point.
What would you do if you weren’t CEO?
I think I would be a strategic consultant because I like to brainstorm and implement things. I have a background in software engineering, but I’ve never been a good researcher. I’m someone who gets 80% of something very quickly. But when you’re a researcher, you have to get 98% or 100% and that takes a long time.
Throughout the summer, the airline was also blighted by flight cancellations and delays, costing it 75 million euros. Andrew Flintham, Tui’s managing director for the UK and Ireland, wrote to customers in mid-June to apologize for “the distress caused”. The energy crisis and inflationary pressures across Europe are also expected to trigger a slowdown in consumption later in the year, which will likely rattle the travel industry.
But is this challenge enough for Joussen? Not enough. “The market is normalizing and you have more normal challenges. . . as bad as flight cancellations or whatever, you say it’s more normal,” says Joussen. “And then the question is how ready are you for a normal life?”
Joussen’s £6.4m-a-year contract was due to run until September 2025 but he quit early at the end of last month but the pandemic comeback is not over. “The demand is high, but we still have debts and we still have the state as a shareholder, so there will be a few years where we will have to repair the balance sheet,” he predicts.
And what is his advice for his successor? “Nothing is less important, less sought after than advice from a former CEO,” says Joussen. “Everyone does it in their own way.”