Former Tiger CEO Merren McArthur on changing the industry

As a pioneer for gender equality in aviation, Merren’s leadership saw a transformation at Tiger — her last Australian venture before the pandemic — resulting in the highest proportion of women in pilot roles and upper management.

Merren says she had an “unusual” career path, having pivoted into aviation after spending years working in law. “Many people in aviation have had a passion for it all their lives, but I didn’t discover aviation as a possible career path for myself until relatively late,” she says. When Merren finished high school, she moved away to the “big sticks” to study at the University of Melbourne. While dreaming of becoming a foreign diplomat, she took up a law degree, along with foreign language courses in French and Italian.

“Just quietly, I hated studying law. It was boring and tedious, and I didn’t spend enough time on my studies,” she says. “So that paid back in mediocre grades, which meant I didn’t get into the diplomatic course after undergrad.” Merren says the setback was “devastating”, however she attempted to make the best of a bad situation and make use of the law degree that she had spent years obtaining. “I practised law for about a year and found an area that I found interesting: commercial law. It was negotiating contracts, writing contracts, doing deals, that sort of thing. But I still had a yearning to get out of the law and to do something a bit more directly impactful. I wanted to be the decision maker in businesses rather than advising businesses. Which I suppose is how I found my way into corporate counsel and in-house counsel.”

After taking on a few in-house counsel positions, and a two-year stint as Deputy State Solicitor at the State Solicitors Office in Western Australia, Merren took up a “new and exciting” role at Virgin Blue in 2008. “It wasn’t until then that I got the aviation bug and ended up spending 12 years with the Virgin Group,” she says. “From the moment I started as general counsel, it was frantically busy. There were new things every day, and I kept thinking, ‘Well, this will settle down in the next few months, and it never did. But I realised that pace probably suits me.”

Since then, Merren has been heavily involved in aviation, moving through various roles – both in and outside of her legal background – before making the jump to the C-suite. When asked what that process looked like for her, Merren states: “The first step was to move out of the law because it’s easy to get boxed in and even overlooked if you’re in the support functions — particularly as a woman.” Merren says she was honest and upfront with her then-CEO that she wanted to move out of the law and into a role with the business where she could become more of a decision-maker, and put her skills to the test. “He was slightly reluctant at first, but eventually, an opportunity came up, and he moved me into a more commercial role as a Group Executive. It was a natural step for me into running the network, the revenue management teams and the alliances, and I loved that. It’s a cool part of an airline. It’s really where all the decisions are made about where you fly to, how you price it, and all the dynamic levers you have to pull to make the airline profitable.”

Later, Virgin bought regional airline SkyWest in Perth. “At that point, my CEO said, “Well, you’ve done a good job here, so I’d like to see you go over to Western Australia and integrate this little airline into Virgin. It’ll be really easy, Merren”,” she explains. “I’m always up for a challenge, so I agreed.”

However, within just a few days, Merren was forced to face the full weight of her new position, when Australia’s aviation regulator summoned her in to discuss the numerous issues it had flagged with SkyWest – now Virgin Australia Regional Airlins. “Within a few days of my arrival there, I got summonsed by CASA back to Melbourne to meet with them so that they could explain to me why they had this little airline on high alert. I realised then that our businesspeople might not have done their full due diligence on this airline before the purchase, and I had to quickly get up to speed with operations, and we addressed those concerns. Merren found the issues stemmed largely from SkyWest’s earlier and rapid expansion, which left some uncrossed t’s and undotted i’s across the business.

“I had a mixed-bag leadership team under me at the time, so I relied on my colleagues at Virgin Australia, who provided me with great support,” she explains. “The CEO told me I needed to expand operations but also take out costs to be profitable.” However, Merren saw the issues quite differently, particularly after her early run-in with the regulator. “I called him and said, ‘I’m not taking costs out. I actually need to employ more people! We need to have better resources for this airline’ because it has grown too fast too quickly.” Merren continues: “It had expanded from Western Australia to the east coast; it had taken on two extra fleet types within two years, so it had four. All that extra complexity in aviation creates risk and requires a lot of support.”

With that, this newly-minted CEO got to work. “I spent the next two years building those sorts of systems and processes to ensure it was safe going forward,” Merren explains. “We ended up being a poster child at CASA for creating a strong aviation safety culture from a relatively low starting point. It was a great airline, though, with a great culture. Once I had pointed them in the direction of where we needed to go, everybody rallied behind it, and most people were quite relieved those changes were made.”

Under the guidance of Merren McArthur, Virgin Australia Regional Airlines became – and remains to this day – the most profitable unit within the Virgin Australia Group. Just over one year after taking on the top job at VARA, Merren was also tasked with setting up the Virgin Australia Cargo unit, adding more on the plate of this new, and flourishing, CEO. She held the chief executive title at both airlines until May 2018, when she took on her most prominent Australia position yet – CEO of Tigerair Australia.

“I suppose I had developed a reputation for fixing things,” she says of this time. “Virgin acquired Tigerair around the same time as SkyWest, but since then, it has not been very profitable or successful. I was asked to go down and turn Tigerair around.” The new role saw Merren move from her long-held Brisbane base back home to Melbourne, which she saw as a “bonus” to the exciting promotion. While Tiger had many problems of its own – not least its lack of profitability – Merren says she was “pleasantly surprised” when she walked through its doors.

“It already had a great team culture,” she says. “But there were similar issues to what I saw at SkyWest. It was going through a lot of change and had not implemented processes and systems to manage that change. And it had a very, very lean team, too.” When Merren took the helm of Tiger, the airline was in the process of transitioning from an old Airbus A320 fleet to a Boeing 737 fleet, adding magnitudes of difficulty to an airline already struggling to compete. “For an airline, changing fleets is like open heart surgery,” Merren reveals. “The airline was also in the process of changing its flight planning and flight management system, which is like a double bypass. And neither of these had been managed that well.” She continued: “The fleet transition meant it had to recruit a bunch of extra pilots and put them through training. This was back in 2018, and we were also going through a pilot shortage at the time, so we were struggling to be competitive enough to recruit and retain pilots. And we needed more than we ordinarily would need, so it was all very complicated. The main thing also is that Tiger had a 10 per cent cancellation rate at the time because it didn’t have enough crew resources, so it constantly cancelled flights.”

Tigerair’s propensity to cancel flights, wreaking havoc on customers’ holiday plans, meant that the budget carrier struggled with its reputation among the flying public. However, Merren shortly realised she could kill two birds with one stone, by dragging down the airline’s cancellation rates. “I soon realised that cancelling flights cost us thousands, if not hundreds of thousands of dollars, so if we could get the cancellation rate down to a more normal amount, that could turn us to profitability within 12 months,” she says. “It also meant that customers were happier, and our brand improved. We focused on fixing that crewing and resourcing issue, and I decided to reverse the move onto a new crew management system because it would be too difficult and expensive. We returned to the old system everyone knew and was more comfortable with. Then we could get control of our crewing resourcing, and we were starting to turn the airline to profitability.” Merren says her previous experience overhauling airlines meant she was primed to make the necessary calls in order to bring Tiger to the next level. “I had a strong team with me on this, and I also had more confidence this time to make the team changes that I needed to more quickly,” she says. “The people that needed to be moved on did so, and I retained some great people and then brought on some great people too. It was a great airline, and we were just starting to turn it around, but then, unfortunately, COVID-19 hit, and we lost Tiger.

Merren is not just known for turning a struggling airline into a profitable business. She’s also well-renowned for her ability to improve female engagement across all levels of her businesses. Many readers will know that’s no easy feat in aviation – particularly being a woman herself, fighting for her own place in the notorious ‘boys club’. “When I first stepped into Virgin Australia Regional Airlines, I had a few older men working below me who wanted to give me advice on how to go about things, which is challenging for a first-time CEO,” Merren tells. “They sort of assumed that my lack of operational experience meant I needed that. There’s a role that the CEO normally takes, as part of CASA’s regulatory requirements, which means the CEO should be the ‘accountable executive’. So, being a lawyer, I read these regulations and understood them.

“But I then had a lot of older men in operations who told me, ‘No, you can’t, because you haven’t got operations experience’. And I said, ‘Well, according to the regulations, this is actually about leadership, and I’m supposed to have the people who’ve got the operations experience reporting to me, so I don’t need to have that experience myself.’,” Merren explains. “I had a few debates about that in the early days.”

According to Merren, one of her most interesting – and perhaps, challenging – learning experiences as a new leader was inheriting a fully-male team, particularly during her first CEO experience at VARA.”Some in the team were exceptionally high quality, and I kept them on, and some not so much,” she says. Frustratingly, even when Merren had curated her team into a “relatively high-performing one”, she says it remained nearly impossible to get her message across to her still largely male-dominated team.

“I felt like I became the nagging mother constantly telling them to talk to each other and not to come into our leadership meetings still debating these issues,” she says. “They should be resolving them outside of the meetings and presenting a solution to me, you know, through teamwork and collaboration. But they would just look at me.

“I realised that early in my career, I had to adapt my thinking style to deliver what was expected of me to my male leaders. I was now asking the same of these men working with me.”

“It was like talking to a brick wall. They didn’t seem to absorb it no matter what I did,” she exclaims. “At one point, I did a workshop away from the office with them and challenged them to find out how they could work better together.

“Do you know what they said? The best thing that could happen would be that I should change the meetings that I run. At first, I thought, “Oh, okay, the problem is me.” But then I had this lightbulb moment and I thought, well, it’s because they’ve never been led by a woman before.”

Merren said it wasn’t surprising – nor the fault of her team – that they were hard-wired to work and think individually, as opposed to collaboratively. “They all came from largely operational areas, they’ve come up through the ranks, and men have always led them,” she said. “They’ve never been asked to collaborate, communicate, to work effectively as a team because that’s not often the key driver for male leadership.”

She says that the revelation reminded her of her own journey, as a woman rising through the ranks herself, which ensured she remained patient with her team as they learned a new style of working. “I realised that early in my career, I had to adapt my thinking style to deliver what was expected of me to my male leaders. I was now asking the same of these men working with me. And they hadn’t had that before,” she says. “They didn’t understand – it was a whole new world for them. And I needed to allow them to adapt to that. I became more patient and had that conversation with them. There was a give-and-take where I adapted some, but I still wanted them to take on what I was asking. We had further workshops, and when they got it, they ultimately became a very, very high-performing and collaborative team.”

Merren says working collaboratively is a “real competitive advantage” in aviation. “There are so many moving parts in aviation, and everything has implications for other parts of the business,” she says. “When trying to set up a new project, for example, operations people might forget to include the commercial teams, which could severely impact the project result.” It’s an understanding that she has taken with her into her new role as CEO of LynxAir in Canada, a new ultra-low-cost point-to-point airline, which officially took off in April this year. “I’m a really big fan of having joint meetings and keeping everybody in the loop because whenever I have a meeting with all of the key stakeholders in the room, it never ceases to surprise me that there’ll be one person who puts their hand up to say, “Well, what about my division and me” and it quite possibly would never have occurred to me that this would impact this person’s area. From an aviation point of view, that communication and collaboration are critical to the airline’s success.”

Significantly, under Merren’s leadership, Tiger boasted the highest percentage of female pilots in the country, and nearly double the international average for female representation in the cockpit. Merren says there was a multi-pronged approach to achieving this feat. “Firstly, I don’t claim all the credit for that myself, because Tiger had a great culture before I stepped up,” she highlights. “However, one of the most appealing parts of working for Tiger is that, while pilots would see less compensation than some competitors, our schedules allowed everyone to get home to their family for dinner. I think that was a differentiator that made it probably more appealing for women to join us over a different airline.

“The other thing is that we did consciously try and go out and attract more women to the company,” Merren says. “We knew then that you need to try and recruit young girls into thinking about aviation when they’re younger. As such, we took our female pilots into high schools and had them speak there to show young women it’s a career path they might be interested in. I’ve read since that you need to go even younger if you want to encourage women into aviation and STEM because it seems girls decide about the career path at the end of primary school.

“I think if we want to see more than 5 per cent or 8 per cent female representation in pilots and engineers, we need to show them even earlier that this is an option. By the time they’re getting to secondary school, they’re already starting to go towards the humanistic kind of professions and not thinking about the math, science-driven professions,” she says.

On top of getting out into schools to speak with young girls about aviation, Tiger, alongside parent company Virgin, overhauled its training program to make it more suitable for a wider range of candidates. “We realised that some aspects of the training program were not suited to how women think about things,” she reveals. “We readdressed that and some of our testing mechanisms too. There was a whole range of things going on at Virgin and Tiger to foster this, and as I say, it was not just me. It was a team effort and something that Tiger naturally gained and fostered.”

To conclude, Merren says: “Ultimately, I think once you already have a good cohort of women in aviation, they form a strong bond and strong connections, so that then helps the organisation grow and retain that workforce. We also had Deborah Lawrie, the first female commercial pilot in Australia, in our pilot group – I’m sure that was a massive drawcard for us as well.”

Merren says she feels that “a lot can be learned” from what Tiger was able to achieve in its push towards gender equality within its workforce. “We just need to do more of all of it,” she says. “We need to be talking to young girls and students and encouraging them to get into aviation, whether it’s as pilots or engineers. We need to be making the industry more female-friendly in terms of the lifestyle and account for the dual roles that they might be playing in their home. And we need to have female role models. These are three things that are not rocket science, right? But we’re not doing enough of that.”

To hear more of our in-depth conversation with Merren about her life, career, and new role as chief executive of Canadian startup LynxAir, check out our episode of the Sky’s The Limit Podcast: Changing the Game with Merren McArthur.