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Game Changer
Game Changer
Game Changer
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Game Changer

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The biography of one of Australia's most fascinating and enigmatic business leaders, John Borghetti
From mail boy to CEO - the trajectory of John Borghetti's career seemed set for a corporate fairy-tale ending ... until it nearly wasn't. After 36 years at Qantas, Borghetti was passed over for the top job and found himself having to start again. He hesitated before signing on with Virgin, the looming rival for Qantas's market-share - but it was here that he would get the chance to run an airline exactly the way he envisaged. What followed is one of the most extraordinary stories of corporate transformation and redemption. 
GAME CHANGER is at once the record of how one man revolutionised the airline scene in Australia, and a universal business story of how, with vision, teamwork, passion and dedication, a company can reinvent itself to challenge the status quo, and even to take on a monopoly. This biography of one of Australia's most fascinating and enigmatic business leaders begins with Borghetti's arrival at Essendon Airport as a migrant boy of seven with his family and just two suitcases, and takes you into the very heart of Australia's boardrooms.
LanguageEnglish
Release dateAug 1, 2015
ISBN9781460704899
Game Changer
Author

Doug Nancarrow

Doug Nancarrow is a journalist specialising in aviation. He is currently the editor of Aviation Business magazine. He is also executive chairman of Safeskies Australia, a not-for-profit organisation that actively promotes safety in our airline industry. He holds a commercial pilot’s licence and has been an owner/manager of a flying training organisation and an aviation theory instructor. Before specialising in aviation he was a journalist with News Limited. He was Australia’s Aviation Journalist of the Year in 2006 and runner up for that award in 2009. In 2013, he won an award for Aviation News Story of the Year.

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    Game Changer - Doug Nancarrow

    CONTENTS

    Prologue

    Chapter 1     Being Brave

    Chapter 2     The Corporate Ladder

    Chapter 3     Leaving Qantas

    Chapter 4     Becoming A Virgin

    Chapter 5     Moving Across

    Chapter 6     The Longest Year

    Chapter 7     The Waiting Game

    Chapter 8     Breaking Out

    Chapter 9     Staying Alive

    Chapter 10   Expanding the Model

    Chapter 11   Getting Nasty

    Chapter 12   Settling Down

    Chapter 13   A New Game

    Appendix     Lessons Learned

    Photos Section

    About the Author

    Copyright

    PROLOGUE

    When you’ve spent the best part of four decades in the employ of one company – and done a pretty good job by all accounts – you might expect a memorable send-off when the day comes to move on.

    For John Borghetti, with thirty-six years at Qantas under his belt, and having reached the pinnacle of Executive General Manager, with responsibility for running the airline itself, his departure was not so memorable.

    Having joined the company as a junior mailroom boy at the age of seventeen, he had risen to such an elevated position that only the Chief Executive Officer, Geoff Dixon, and the Chief Financial Officer, Peter Gregg, were more senior to him. The CEO’s chair had seemed like the inevitable next step in what had been an exceptional and hard-won climb up the corporate ladder. But when Geoff Dixon’s successor was named in 2008, Borghetti was overlooked in favour of an ambitious young executive from Ireland, Alan Joyce. Borghetti had not been confident of his chances but nevertheless was disappointed. A few months later, of his own volition, he walked away from the only company he had ever known.

    He gave himself six months to consider his future. He was determined not to rush into anything he might regret. He had money, having walked away with A$4.9 million in salary and entitlements, and, although he was almost fifty-five, he had time. After so long with the Flying Kangaroo, he was tempted to take his life in another direction altogether – but it would have to be something that appealed strongly.

    He knew only the airline business, having never worked outside Qantas in a career that had exposed him to almost every facet of the industry, from sorting mail to selling tickets to ordering new aircraft. But the airline business in Australia in 2009 was pretty much Qantas. The only real alternative was Virgin Blue, an airline that had introduced a new business model to the Australian scene, offering cheap and basic travel in a market that for decades had been accustomed only to ‘full service’ offerings.

    But a career at Virgin Blue had little appeal for Borghetti, whose strength was in customer service, not the service-thin model the budget airlines offered. And anyway, the man behind the Virgin brand, Sir Richard Branson, had no time for someone who had spent thirty-six years with ‘the enemy’. Qantas was an ally of the hated British Airways, which had done everything possible to bring down Branson’s beloved Virgin Atlantic.

    John Borghetti would spend the best part of a year looking at the opportunities, but in the end would return to the industry he knew so well – and loved. And that return would have dramatic repercussions for the Australian aviation scene.

    CHAPTER 1

    BEING BRAVE

    Seventeen-year-old Massimo Borghetti was working in his parents’ restaurant in the Melbourne CBD, as he often did after school and at weekends, the night his father’s good friend Mario Borg popped in for what would be a fateful moment in the young man’s life.

    Borg, who was an executive at Qantas Airways, was a regular visitor to the family’s restaurant, but on this mild Melbourne evening early in 1973 he had something special in mind. He knew that his friend’s elder son was a hard worker with a gift for keeping the customers happy.

    Borg also knew that the young man was bursting to enter the workforce, to establish himself in a job in his own right and to make his mark on the world. Massimo’s father – also a Mario – had quietly urged his best friend Borg to keep an eye out for a job at Qantas for his son. The restaurateur wanted to see his son in a good, secure job – and in the 1970s there was nothing more secure than a role with the government-owned Qantas.

    On this particular night, Borg had come straight from his office just a couple of blocks from the restaurant to find the young man. He had heard that very morning that there was a junior job going at the airline, and he thought Massimo might be interested in applying for it.

    The young man’s eyes lit up as he listened to the proposal. Did he want the job? Oh yes he did, even if it was the lowest of the low. He didn’t care: he wanted any job that would release him from a high school he hated. He would have cleaned their toilets, polished their boots, if only they would pay him for it and give him an opportunity prove himself.

    Ten years had passed since Massimo Borghetti, seven years old, had arrived in Australia with his mother and two younger siblings on 25 April 1962.

    They had landed at Essendon Airport, then Melbourne’s main airport, after an epic 35-hour journey from Rome to Sydney on a Qantas Boeing 707 and then to Melbourne on a TAA Lockheed Electra. In those days, Melbourne had no international airport. Qantas was the country’s only international airline.

    The Borghetti kids, Massimo, Mauro and baby Rita, and their mother, Anna, had flown around the world to join Mario, who had preceded them by three months. He had arrived in Melbourne alone on 19 January, the vanguard of a search for a better life. Massimo’s first thoughts as he alighted from the aeroplane that day were of kangaroos. He had heard they were large, aggressive and everywhere in this strange land. And his alarm on stepping down from the plane at Essendon Airport was ignited by the intense, still heat of a Melbourne summer and the emptiness of the horizon.

    It was infinitely different from the bustling Italian capital he had left behind. Even outside Rome, the Italian countryside wasn’t brown, dead, empty; there were rolling hills, trees everywhere – and people. He was thrilled to see his father waiting in the distance, but why were they all here in this desolate place? Why were his parents doing this to their children? There was nothing in sight. Nobody. Nothing.

    He could sense that his mother was also disconcerted by the barren vista but was doing all she could to hide it, mustering a radiant smile for her husband as he waited impatiently at the very front of the small crowd of greeters in the tiny terminal.

    In Massimo’s imagination, the kangaroos he had been told about had grown into fiercely malevolent beasts, three metres tall. He looked for them as he accompanied his mother across the baking tarmac, but they were nowhere to be seen in the empty vastness.

    He had not the slightest idea then that the kangaroo, or at least a symbolic version of it, would become such a huge part of his life in this strange and forbidding landscape.

    But the Qantas of those days was only just emerging as the ‘flying kangaroo’. The airline connected Australia, which still felt a very long way from civilisation, to the rest of the world – a world that was centred on the ‘mother country’, the United Kingdom, and particularly London.

    Qantas had just entered the age of the jet airliner, with the arrival of its first Boeing 707 in July 1959. These jets were to change everything for Qantas and its passengers, bringing the world suddenly closer and making air travel far more accessible. Prior to the 707s, Qantas had flown the four-engined, propeller-driven Super Constellation on very long trips to Europe and North America, running thrice-weekly round-the-world services. But, despite the romance of Super Connie travel, they were slow and the cost of operating them kept airfares high. Only the well-off could afford to fly; Australia’s budget travellers still made those long journeys by boat.

    Even earlier than the Super Constellations, international air travel had been an epic undertaking. In 1938, Short C Class Empire flying boats had begun ferrying passengers to Asia; they took off exclusively from Sydney’s Rose Bay headed for Singapore, stopping each night to allow the fifteen passengers to sleep comfortably in hotel beds in Townsville, Darwin and Surabaya in the Dutch East Indies (now Indonesia). From Singapore, the rest of the journey to London was flown by British Imperial Airways and took another six days, travelling via India, the Middle East and Egypt. The nine- or ten-day trip ended with touchdown at Southampton, a two-hour rail journey from London.

    It was dramatically faster than a sea voyage, but this was truly luxury travel and only for the very wealthy. The trip from Sydney to Singapore alone cost something like $80,000 in today’s dollars, but included sleeping bunks, a smoking cabin and even, if the weather was accommodating, a promenade deck so passengers could take some fresh air.

    With their more efficient jet engines, the 707s revolutionised air travel. They could fly further and faster than earlier models, consumed less fuel and could carry more passengers. By the time the Borghetti family flew direct from Rome to Sydney, the Qantas network included San Francisco, Vancouver, New York, Johannesburg, Hong Kong, Tokyo, Bombay, London and Paris, as well as the Italian capital.

    The four Borghettis had travelled with just two suitcases between them, containing everything they had that might be needed in the new world. Once they had given Mario huge hugs and collected the two bags, they drove into the city in a car belonging to a friend of Mario’s. The road took them through a flat landscape that sprouted row upon row of single-storey houses as they got closer to the city itself. There were no people to be seen.

    Massimo was tired. They all were. The novelty of the new land was more than countered by the almost unbearable heat. In the absence of air conditioning, they drove through the flatness with all the windows open. The trip seemed to take forever.

    Their destination was a terrace house in Queensberry Street, North Melbourne, where Mario Borghetti had rented the upstairs level. Another family occupied the ground floor; both families shared the one bathroom and the backyard toilet. There was a makeshift kitchenette upstairs, where Anna could prepare meals. The space was never going to hold the young family for long, but it would have to do for a time.

    Today, Massimo remembers a bank on the corner and a row of terrace houses. He recalls stretching to reach the front-door key, which was stored on a ledge. He can mentally reprise the walk to St Mary’s, the small school ‘down the road and around the corner’, but not much else, apart from the lack of space. It was a long way from what Massimo Borghetti knew as home – and so intimidatingly different.

    Massimo had been born in the town of Marta, on the shores of Italy’s fifth-largest lake, the Lago di Bolsena, a third of the way from Rome to Florence, on 11 August 1955. It was Massimo’s mother’s hometown, and not far from his father’s hometown of Montefiascone, where in Renaissance times the Pope had had a summer palace. Mario and Anna had been married in the nearby provincial hub of Viterbo on 13 September 1954, when his mother was twenty-four and his father twenty-six.

    It was a hazardous place to start one’s life. The towns of Marta and Montefiascone are at altitude and cold in winter, very cold, with snow on the ground through much of the season. And the newborn child fell ill with an infection that commonly claimed infant lives. There was no doctor or pharmacy in Marta, and his father had to find a way to get through the winter roads to another town to bring back the medicine that in this case saved a life.

    Massimo’s earliest memory of life in Marta is of standing on a chair in his grandmother’s bedroom, eating a slice of salami sandwiched between thick Italian bread and looking at the world beyond the bedroom window with unbounded satisfaction. It seemed to the then three-year-old that life couldn’t get any better. The house, which is still standing, was perhaps four hundred years old and his grandmother’s apartment was on the top floor. The salami came courtesy of the proprietor of the delicatessen that occupied the ground floor – and it came two slices at a time each afternoon. The view from the window, perched on that chair upstairs, was of the village street below, but it was enough for the boy to feel that he was ‘king of the world’.

    The townsfolk of Marta, population then almost 4000, lived off the surrounding small farms and fishing on the Lago di Bolsena. Today, the lake attracts weekend tourists from Rome and elsewhere. It is a two-hour drive from the capital, a picturesque retreat from city life.

    Mario had taught himself to cut hair and set up as a barber, but his customers were as short of cash as he was, so the barbering did little more than put food on the table. There was no wealth in Marta of which to eke out a share. The difference, however, between Mario Borghetti and his fellow townsfolk was a certain defiance. He refused to settle for a life of poverty. He knew in his soul that somewhere, there were opportunities to provide a better life. And he was determined to find them.

    So it was that in 1958, Mario, Anna and their two small sons left Marta and headed for Rome, before Massimo could appreciate the realities of life in his mother’s hometown, with its smiling neighbours, its relative poverty, and its absolute lack of opportunity. The move would prove typical of a father who would chance his arm at anything that might feed his family and lead to even more opportunities for his children.

    In Rome, Mario Borghetti discovered talents he had not explored before. He secured a job as a driver with the Automobile Club d’Italia, the equivalent of Australia’s NRMA or RACV, largely on the basis of bluff and confidence. ‘Drive? Of course I can drive. Just give me the keys. I am perhaps Italy’s most experienced and talented driver.’ This was a young man who had had to survive on his wits through the hard years of the war, when food was scarce and life was dangerous. His own father, a medic in the Italian army, had been captured in North Africa and transported to Australia, to a prison camp in Bonegilla on the Murray River in Victoria. His mother had been left to feed five children with virtually no money. The family was eventually reunited after the war.

    While working for the Automobile Club, Mario found additional casual work at the Australian embassy in Rome. When a full-time job came up at the embassy, he was quick to take the opportunity. It came with accommodation on the top floor of the seven-storey embassy building; the Borghettis now found themselves residing in a pleasant quarter of the city, in Via Magenda, not far from the central railway station, the Stazione Termini.

    The building faced a small park, which was a haven for the neighbourhood children. Thinking about life in Rome, even in those difficult economic times, still brings a smile to Massimo’s face today. ‘Life in Rome was fun,’ he says, and it shows in his whole expression.

    In the new job, with only a staircase between home and work, Mario did whatever was required of him: porter, driver, clerk, anything. He was an energetic general factotum, displaying a flexibility his eldest son would inherit.

    For now, however, Massimo was at school, which he enjoyed despite the discipline and demands. ‘We wore a uniform and it had to be seriously clean, as did you,’ he relates. ‘You walked in and sat down and you went like this [flattening his hands on the table]. And your feet. The teacher would come through and if your shoes were dirty or your hands had dirty nails, whack! You soon learned to turn up without any of that. But the schoolyard wasn’t daunting – the kids just played – so school was good. It was serious, no mucking around in class, [but] learning was fun.’

    The walk past the imposing Stazione Termini each school day was an adventure in itself, a trip through a frenetic but friendly universe. And it took him close to where his paternal uncle Aurelio lived and worked as one of the city’s most respected tailors, cutting the finest suits for Rome’s businessmen, old wealth and movie stars. Massimo dropped in often and he warmed to his uncle, who was a constant source of wisdom and advice.

    After three years, however, it became apparent to Mario Borghetti that Rome was not going to be the long-term answer to feeding his family or providing even humble opportunities for his children. In many ways Rome was even worse than Marta, having been ravaged by the war. The streets, more than a decade and a half later, were still awash with the flotsam and jetsam of the conflagration of the ’40s. The mood in the city was hopeful: the Olympic Games had been held there in 1960, despite the empty coffers, and there was international affection and sympathy for the Eternal City. But there was also desperation. The economy ran largely on the exchange of official IOUs, or cambiali. Bank notes were virtually worthless and opportunities were scarce. The city was destitute of the promise Mario was seeking for his family.

    Faced with an accumulation of bills he could not pay, Mario began to think beyond the shores of Europe. It was an extraordinary, though by no means unique, demonstration of willpower and optimism by a man who had no knowledge of the world beyond his home region. He had heard talk of possibilities in a far-off land called Canada and determined that this should be the family’s salvation.

    But it wasn’t to be. Instead he found himself on an aeroplane, a Qantas Boeing 707, heading for Australia, a land that was as great a mystery as Canada, despite his time at the Australian embassy in Rome. He had never before set foot on a plane, let alone one that would take him to the other side of the world, without any prospects beyond his own connivance.

    He had chosen Melbourne as his destination on the advice of John Brandon, the head of immigration at the embassy. Today, Massimo remembers Brandon as an old man with white hair, whom the family visited in the Melbourne suburb of Northcote once they were settled in Australia. Brandon had returned to Melbourne too, and would become Massimo’s godfather at the time of the young man’s Confirmation. It was on that festive occasion that Brandon formally bestowed the name Giovanni (John) on the young Borghetti. A saint’s name for an important religious ceremony – and one that was to stick with him.

    In Melbourne, Mario quickly found work at a hotel that was one of the best known in town, Mario’s in Exhibition Street. He did a bit of everything: he was variously a dishwasher, the night watchman, a barman and more. At first he lived in a single room in Fitzroy; then, in preparation for the arrival of his family, he found the top floor of the terrace house in Queensberry Street.

    But with two adults and three children aged seven, five and one, sharing a bathroom and an outside toilet with another family was never going to last for long. Four months after arriving in Melbourne, the Borghettis moved to a converted corner milk bar in Norwood Street, in suburban Newmarket.

    For the eldest Borghetti child, this was the real beginning of his life in Australia. The months in North Melbourne had been a transition period when maybe, just maybe, there was still hope that the traumatic displacement would come to an end and he would find himself back on the streets of Rome. The move to Norwood Street meant the abandonment of even that flimsy hope.

    ‘Australia started for me in Newmarket,’ he recalls today. ‘I remember thinking, OK, this is it now, this is home, move on. Prior to that it was always waiting to go back . . .’ For a time after that realisation, the young boy was angry, not with his parents but with the fates. But he was also intensely determined to survive.

    In Newmarket, the family took in boarders to supplement the household income. One was an elderly Italian man named Adelio Zagonara who taught opera singing for a living. His students used to come to the house to take lessons and practise their scales. The other spare room was rented to Paolo Trevi, a nightclub singer closer to Mario’s age. The two men got along well and even started an import business together, bringing into Australia an Italian coffee-based aperitif, very popular at winter sporting events, called, totally coincidentally, Caffé Sport Borghetti. But the era’s much more restrictive liquor laws imperilled the venture and the business was on-sold.

    In the suburbs there was room to move and to find some personal space. But money was still tight, and both father and mother worked almost all night and day to provide. Anna had joined Mario at the hotel, working as a housemaid. Massimo remembers climbing out of bed on cold Melbourne mornings to get breakfast organised for his younger siblings. His mother would already have left for work between five and six o’clock, but she would have left the school lunches in the fridge. The old boarder Adelio had taught Massimo to make ‘thin’ omelettes, which saved on eggs, and these became the children’s regular morning meal.

    After breakfast, Adelio would walk the two brothers to their new school, St Brendan’s, sometimes leaving their infant sister with a neighbour, who would look after Rita for the day. On other occasions, when there was no babysitter available, Rita would accompany her mother to work.

    St Brendan’s was a challenging experience for an eight-year-old who spoke no English.

    Massimo recalls his first visit to the school with his mother to enquire about enrolment; an Italian-speaking woman translated for the immigrant pair, taking the time to explain the daily workings of the small Catholic school, what was expected of the students and what would be provided. But this was a tough school in a tough neighbourhood – and it had very little experience of the immigrants who had flooded into Melbourne after the Second World War. The Italians and the Greeks, who made up the majority of the newcomers, were congregating in the inner suburbs of Carlton and Fitzroy. But the Borghettis ended up in Newmarket because it was what they could afford. The suburb was working class, but almost exclusively Anglo. Massimo’s new classmates weren’t about to welcome a wog boy who couldn’t even speak their language.

    But that wog boy was determined to get it right in the alien environment. When he visited the school with his mother, he learned that each schoolday started with a line-up. On his first day, when the school bell rang, he was ready to be first in line. And he was – only to come under immediate and sustained assault by an older and larger boy, who launched blows and kicks and screamed abuse in a language that made no sense to the bewildered Massimo. Only later did he come to learn that in his eagerness to fit in, he had taken the spot that belonged, by right of force, to the school bully.

    ‘I couldn’t understand why this kid would come up and hit me,’ he relates, a half century later. ‘I started hitting him back and we were having a right old punch-up on the floor. When we were pulled apart I started crying, not because of the punches but because I was so frustrated. I could’t understand why they were all shouting at me, including the teachers. Then, of course, later you break for morning tea and it all starts again. The whole school picks on you, because that’s what kids do. And that’s how my school days were for a long time.’

    The lunches his mother left in the fridge before she went to work were deliciously Italian. Thick panini, replete with prosciutto or an exotic Italian cheese. Olives. Perhaps a zucchini omelette. A pizza slice. Today, this is the daily lunch fare of city-siders all over Australia. But back then it was ‘dago’ food, and in the schoolyard at lunch time it was an invitation for ridicule or worse.

    ‘I learned very quickly never to eat Mum’s lunch at school because you’d just get picked on,’ today’s John says. ‘So every day on the way to school I’d throw them in the rubbish bin. I just didn’t have lunch.’ It didn’t even matter what was hiding inside his mother’s sandwiches: the bread itself evoked hostility. It wasn’t square, it wasn’t plain white, and it wasn’t tasteless. It was undoubtedly foreign.

    But there was a school canteen, and he devised a plan to avoid starvation. It involved getting sixpence from his mother to save her the trouble of preparing lunch: ‘I can get a really good sandwich at school for that,’ he assured her. In fact all it got him was the cheapest thing on the menu, a buttered roll, which was as foreign and unpalatable to him as was his mother’s lovingly prepared food to ‘them’.

    ‘Everyone was eating so much butter, and I couldn’t understand it because Italians just don’t eat that much of the stuff. That roll was all I could afford, so I put up with the butter, but I never got used to it. I still don’t butter my bread today. I don’t use butter on anything.’

    Worse even than the canteen was the daily ritual of the free milk program, a federal government initiative. Every day, crates full of small bottles of full-cream milk, capped with gold or silver foil, were delivered to the school. The milk might be unloaded in the schoolyard any time between the start of school and the mid-morning break. And there the crates would sit, often in direct sunlight, until the bottles were handed out at recess. The crows soon learned to get in first, pecking their way through the caps. When the bottles were finally handed out, consumption of the contents, always warm, often soured, with a thick layer of cream on top, was mandatory. Massimo was not the only one who found the routine nauseating, often to the point of throwing up.

    Thanks to his rigid schooling experience back in Italy, one thing he could do that his classmates couldn’t was recite all of the times tables backwards, but that was not going to win him any friends. And he could only do it in Italian, anyway, which certainly wasn’t going to help. It was the beginning of years of unhappy schooling; the young Borghetti would never come to terms with school in Australia, and would never ever enjoy it.

    He was also burdened by the distinctly non-Anglo name he bore. Massimo remains on his passport to this day, and his parents still use it. Massimo was a fairly common name in 1950s Italy. It’s a familiar form of Massimiliano, which translates into English as Maximilian; perhaps the closest English equivalent is Max. But in time he discovered the advantages of rebranding, and then there was no turning back. ‘By the time I started my work life, it had certainly stuck,’ he says today of his anglicised name. ‘I remember when I joined Qantas, Giovanni [the saint’s name he had acquired at his Confirmation] must have been [on my paperwork] somewhere, because one of the personnel people said to me, Oh, so we’ll call you John. I remember thinking, Call me whatever you like, just give me the job.

    The Borghettis had arrived in Melbourne in the era of Premier Henry Bolte and Prime Minister Sir Robert Menzies, both long-serving leaders in the paternal style and ardent advocates of tradition. Melbourne was still living on the wealth of the nineteenth-century gold rushes that had made it the financial capital of Australia. And it wore that crown with a stubborn dignity and an elegance that no other Australian city could claim, except perhaps Adelaide, Australia’s only state capital without the blemish of convict origins.

    The buildings that lined Collins Street reflected the moderately old wealth, and the Melbourne Club and the Australian Club were where the city’s deals were done. Saturday,

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