American Airlines CEO Robert Isom lamented this morning how difficult it is to run an airline like AA. But to blame AA’s problems on the FAA, supply chains, and Boeing fails to fully account for why American continues to underperform its peers.
American Airlines CEO Blames Supply Chain, Air Traffic Control For AA’s Woes
Speaking at a Skift Forum in Dallas, Isom complained, “‘It has never been harder to operate an airline.” He cited air traffic control issues and supply challenges as the main culprit for making it difficult.
“And so, whether it’s air traffic control … that’s very different. That to fly from Chicago to New York, it’s 30 minutes longer than it was 20 years ago.”
And he’s right that not only has progress in modernizing US air traffic control systems stalled, but that the mismanagement of the current system has led to operational inefficiencies like being forced to add buffer time to flights, known as schedule padding, due to the uncertainty of air traffic congestion, particularly on the East Coast.
Isom also blames the supply chain, saying both aircraft and engine manufacturers are failing to deliver.
“The supply chain…the airframers or the engine manufacturers, but the whole supply chain really hasn’t come back to where it was in 2019.”
And he’s right about this too. Work came to a standstill at Boeing for seven weeks as 33,000 workers went on strike. Engine manufacturers have had great challenges in delivering. And that has frustrated AA’s growth plans.
A Lack Of Clear Vision At American Airlines
But here’s the thing. Notice how Delta and United have performed so well while American has struggled. All three carriers operate weather-prone hubs and deal with the same Air Traffic Control system. United has also run into delivery issues with Boeing and while Delta is buying Airbus jets right now, you cannot reduce AA’s problems to factors beyond its control (same issue with Delta’s CrowdStrike meltdown).
While it has become almost cliche among airline analysts, Isom’s problem is that AA still does not have a vision. The Vasu Raja approach failed and even as AA continues to bulk up its domestic routes and add international flights to “safe” destinations in Italy and Spain, there is no discernible strategy that is driving operations: it seems AA just throws things out to see what sticks and tries far too hard to be many things to many people.
Tomorrow, I’ll discuss how AA forfeits loyalty by missing out on low-hanging fruit like its phone systems, website, and onboard wi-fi. That’s part of the problem too, but more indicative of the lack of clarity in pushing toward excellence.
CONCLUSION
More introspection is needed at American Airlines. Yes, there are factors beyond its control that have impacted operations and made it “hard” to run the airline. But those issues are not unique to AA and it is time that AA determines once and for all what it wants. Does it want to be a premium competition to Delta and United or does it want to provide something else, like an alternative for budget travelers who want just a little more than Spirit Airlines? Because trying to please all people ends up pleasing no one.
image: AA
As a CEO, Mr Isom is very well compensated for his time and effort. Therefore, as a member of the Senior Leadership, he has the responsibility to lead, to resolve issued, and to provide guidance to others!!
If he feels overwhelmed, time to move on the Chairman job and let someone else carry the torch!!
The whining is unbearable!!
Good leaders, lead. Parker’s worst decision, in hindsight, was picking Isom over Scott Kirby to lead AA. Isom is a numbers geek (and apparently not that good at it) Kirby isn’t perfect, but he gets it–and understands the industry and passengers far better.
@ Matthew — I’ve never even seen this jerks picture before! Why? Becasue he is a crappy leader who hides and milks every dime he can from the airline. This guy should be fired.
Blame it on things you can’t control. That way you are not responsible for the poor performance of the company. It must be hard work lugging that $31 million all the way to the bank. Poor guy.
And yeah, what’s with the picture. Very creepy.
One wonders what direction Isom will give AA once the US economy collapses as most bankers predict for next year.
Link your credible bankers. Doubt there are any.
We will never lose money again!
He owns it as CEO. If he (or his senior leadership team) can’t figure out how to either solve these problems or come up with alternative solutions…then shame on him/them. To blame others for your failures and failure to perform is the lamest excuse. It is a true demonstration of a lack of leadership at the C level.
I’ve said this over and over about American….it tries to be everything to everyone, and when you try to please everyone, you fall short and end up pleasing no one. American, on one-hand CAN do things well–(ie. Flagship Dining, Bang & Oluffson Noise Canceling headsets, Rockwell Collins Super Diamond Business Class seats) but it fails miserably in other very obvious ways, as witnessed by Project Oasis where it jammed in WAY TOO MANY seats on domestic flights, installed tiny bathrooms. The 737’s in coach are UNBEARABLE for even an average sized person. It has dismal domestic main cabin offerings/service. Their customer facing employees can be some of the best, and the worst I’ve ever seen….
The “not having a vision” is completely valid…but that is not just an ethereal thing. It is clearly reflected in a very mish-mash hard and soft product. On a good day, with the right crews on a decent aircraft/and a good seat, AA is very competitive with UA and DL and can be a pleasure to fly…the problem is, it is sooo inconsistent and those trips are too few and far between. (Even many reviewers are occasionally shocked when AA gets it right) There is no thought to a quality consistent product or message or level of service…and it often shows in the front line employees. And that is a direct result of having a management team that cannot instill pride in a product, when your employees and customers aren’t sure what the product is. Investing in some REAL customer service training for employees to raise the bar would be a great start–but that costs $$$ and might cut into exec’s bonuses. An airline cannot try to be SPIRIT and Qatar at the same time–and that is exactly what AA does daily.
Thank you! As an AA PlatPro who jumped ship to Delta about a year ago, I agree completely with this assessment.
I love the blaming everyone else for his failures. Then again that’s been the American way for a while now.
Can’t stand the heat? Stay out of the kitchen.
I’m shocked that he didn’t mention his visionary decision in 2023 to defer some 787-9 delivers for five years.
Nope none of those reasons….AA does not empower their people to make decisions and get things done in a customer focused manner and it shows….he is to blame with his mgt…..taking the power away from gate agents and customer service and hiding behind an app is the worst. They are good people he has made a cultural disaster.
As a 200 leg traveler I will avoid this airline because of the way they handle all of the unforeseen things that happen when flying out of their control or a flying passenger….and their people are helpless to assist…..sorry go to your app we can’t help with those changes (that is HIM not them).
He destroyed the culture not the FAA
See
March 1 changes for facts
“Going for great!”
(Along with MEGA, the dumbest motto spewed to society.)