Impulse boss reaches for sky again

Gerry McGowan manages a wry chuckle about the irony at the heart of his working life. "The first half of the career blowing holes into the ozone layer, the second half fixing them up," McGowan readily admits.

The founder of the fledgling budget carrier Impulse Airlines - which Qantas bought 10 years ago to form Jetstar - is these days touting the merits of green energy instead of burning fuel .

Having taken on Qantas and Ansett in his airline days, he now heads CBD Energy, a company that focuses on renewable power such as wind and solar - pitching itself against the two gorillas in the energy sector, AGL and Origin.

He may be softly spoken but talk to people who have worked with him as airline boss and now as green energy executive, and it is his "steely determination" in tough business environments that keeps coming up.

It's not like the headwinds have stopped with his exit from aviation.

Having just returned from a solar fair in Munich, where he networked with Chinese business partners over Bavarian beer, McGowan enviously looks to countries such as Germany.

Europe's biggest economy has more workers in renewable energy now than in its renowned car industry, he says. McGowan bemoans a lack of vision for green power on our shores.

"We have some of the best resources in the world in terms of wind and solar, and we don't value that," he says.

"Our problem in Australia in renewable energy is we have no politicians with a vision of what they want to make with the industry and so we get crappy policy off the back of it."

McGowan grew up as the youngest of 10 children in working-class Rosebery. His father, an ex-army officer, used his retirement benefits to buy a corner store. When he developed Parkinson's disease, the children had to help their mother run the shop.

Leaving school, McGowan started as a courier for TNT. It marked the beginning of his transport career, rising through the ranks to become national airfreight manager. He joined Mayne Nickless for a brief stint in 1982 before setting up his first business with a $10,000 loan - Lazer Transport - which would later morph into Impulse.

McGowan saw an opportunity when he read that The Australian Financial Review didn't arrive in Perth until after midday. With his wife, Sue, whom he met at TNT, he worked out a way to get the paper out west by 5am, chartering a light jet to Melbourne and connecting with general freighters heading to Perth at midnight.

The McGowans eventually bought their own aircraft to distribute Fairfax's newspapers to WA and all over the eastern seaboard.

The move into passenger travel followed when Oxley Airlines, a small carrier from Port Macquarie, approached Impulse to charter its planes for daytime services. When Oxley ran into financial trouble in 1992, McGowan took over.

Run out of Newcastle, Impulse was a family business, with McGowan's wife acting as treasurer and his older brother, Mark, chief financial officer. It grew into a big regional player, servicing routes across regional NSW and south-east Queensland in a commercial agreement with Ansett.

McGowan became a major force in Newcastle with his high-profile sponsorship of the Knights.

Initially happy to stay regional and not ready to take on Qantas and Ansett on their biggest domestic routes, he changed tack when Ansett in 1999 revealed plans to partner with only a limited number of regional airlines in the future. Impulse wasn't one of them.

"We had no alternative but to compete - which I didn't find daunting because I knew their cost base was very high," McGowan recalls. On May Day 2000, Impulse started its attack, launching a $139 one-way fare between Sydney and Melbourne over the internet. It sparked a price war between the airlines, never before seen in Australia, which accelerated with the entrance of Richard Branson's Virgin Blue weeks later.

For a while, it seemed the low-cost Impulse, with its efficient Boeing 717s, could prevail, backed by big money from the Singapore government, AMP and others. Yet behind the scenes, McGowan's financiers were losing faith that the upstart carrier could battle it out against its established rivals. They baulked - just months before Ansett's collapse.

Less than a year after entering the big league, McGowan had to retreat. He brokered a deal with the former Qantas boss, Geoff Dixon, to contract out Impulse's planes, pilots and crew to fly under the Qantas brand. Qantas bought the business six months later and some 200 workers lost their jobs.

It was a big blow to McGowan, giving up his dream of running the country's third airline.

"Gerry had a pretty strong vision and was a bit of a groundbreaker, getting the internet as a real driver of low fares," says Simon Westaway, who was Impulse's spokesman. "He really did shake the tree."

Looking at the market today, which is shared between Qantas, Jetstar, Virgin and Singapore's Tiger Airways, McGowan feels vindicated that Impulse could have been viable. Impulse "was the catalyst for the destruction of Ansett, in reality", he says.

The Impulse merger with Qantas sparked damaging headlines again in 2003, when the late stockbroker Rene Rivkin was found guilty of insider trading. McGowan gave evidence, revealing how he had told the broker in a phone conversation that funds coming from the yet-to-be-announced deal would let him buy Rivkin's eastern suburbs house.

McGowan distances himself from the scandal. "It was unfortunate and it cost Rivkin everything," he says. "It was nothing to do with me. I only had a two-minute telephone conversation with the man." .

Following his exit from Impulse, he reinvented himself as a renewable energy player, providing seed funding in Lloyd Energy Systems to develop power storage technology. He bought into CBD Energy in 2004 and became its managing director two years later, repositioning it from owning airconditioning companies to branching out into solar and wind power.

Today, about 90 per cent of its business is made installing rooftop solar panels. The energy storage system will be implemented into a joint venture with Hydro Tasmania on King Island.

Using his airline connections, he recruited the former transport, then trade minister and Nationals leader, Mark Vaile, to chair the business - a shrewd move which has let him bank on the politician's relationships in China, leading to a key alliance with two of its biggest renewable energy businesses this year.

Vaile describes McGowan as a "very, very hands-on operator" who is so driven to pursue his goals that his family spent Christmas in China to let him forge a deal. In April, CBD and its Chinese partners - Datang Renewable and Tianwei Baobian - formed a joint venture called AusChina Energy Group with plans to develop $3 billion of wind power plants over three years. The venture will make wind the dominant part of CBD's business.

McGowan - clearly frustrated with what he sees as a lack of government and investor support for emerging businesses such as CBD in Australia - praises doing business in China. "The Chinese have a lot of traits that Australians think they have. I find them very upfront to do business with."

He also hopes to expand further in Europe, trying to grow CBD's foothold by bringing Chinese prices to its established markets.

It's that business ambition that may have attracted McGowan to CBD in the first place.

Asked about his turn-about from carbon polluter to green energy, he admits seeing business opportunities. Coupled with that, though, he says his interest in renewable energy came from a love for rural exploits and the bush. He sees himself as a "farmer at heart".

McGowan owns a 1375-hectare cattle farm in the Hunter Valley. "Farmers are inherently environmentalists, it is in their interest to look after their land," he says. "I think I always had that in me. That's where I feel most comfortable."

McGOWAN, Gerry

Born Sydney, 1955

Education Christian Brothers, Lewisham.

Occupation Managing director of CBD Energy, of which he owns 7 per cent.

CAREER

1974 Starts as courier driver at TNT, moving into management.

1982 Forms Impulse Transport Group after winning distribution contract with Fairfax.

1992 Forms regional passenger carrier Impulse Airlines.

2000 Enters trunk routes. Impulse is sold to Qantas in 2001.

2004 Becomes investor in

and non-executive chairman

of CBD Energy.

Family Married with one daughter, awaiting first grandchild in October.