American Airlines announced last week that Robert Isom would replace Doug Parker as CEO of the carrier. Here’s to hoping for improvement – but what other choice do we have?
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Out With The Old, In With The New
Doug Parker lasted longer than I ever thought he would, and I can comfortably say that while I was wrong about his departure date, I wasn’t wrong that he needed to go. At long last, American Airlines chairman and chief executive officer, Doug Parker will step down in March 2022.
Parker ran America West when the company swallowed up financially challenged US Airways, which then repeated the action again with a “merger” of US Airways and American Airlines. CEO Doug Parker brought Scott Kirby (now CEO of United Airlines) along with him and Robert Isom (among others), the future CEO at American.
Kirby left for rival United a few years ago and has busied himself with large sea changes and bold proclamations. Robert Isom has worked within the airline industry for more than 20 years and as President of the airline currently, he oversees many aspects of the business. While Parker will retire as the airline CEO, President Robert Isom will assume only that role and not Chairman.
From his American Airlines bio:
“Robert Isom is president of American Airlines Group and American Airlines, its principal subsidiary company. In this role, he oversees American’s operations, planning, marketing, sales, alliances and pricing.
Robert previously served as executive vice president and chief operating officer at American after holding those same positions at US Airways. Prior to joining US Airways, he served as chief restructuring officer for GMAC, LLC. and as senior vice president – Ground Operations and Airport Customer Service, vice president – International and vice president – Finance for Northwest Airlines.
Between 1995 and 2000, Robert was with America West Airlines and held executive roles in Revenue Management, Operations and Finance. He started his career at The Procter & Gamble Company.
Robert earned a Bachelor of Science degree in mechanical engineering and a Bachelor of Arts degree in English from the University of Notre Dame, as well as a Master of Business Administration degree from the University of Michigan.”
Isom replaces an accomplished Parker -whether you like him or not, he pulled off some pretty big coups – but will it still be the carrier that Parker and Kirby had shaped or will it change?
Real Change Or More Of The Same?
Labor
Parker started out a little bit sloppy with an ill-advised meeting with union reps. Unions would haunt Parker as management and labor failed to reach agreements numerous times (several labor groups) during his tenure. Isom had his own incursion with labor and will have to navigate already tense relations with a substantially challenging business environment.
Product
Parker, along with Kirby, steered the company away from the brand that was being built and turned it into a global discount carrier model. The most impressive fleet in the US when Parker took over, the airline has installed such dense seating that 737-MAX lavatories are unusable (though Parker hasn’t tried them out) and removed the newly installed IFE on some aircraft. Will the product get better?
Planning and Routes
The airline announced this week that it would have to abandon several international routes next year that the carrier had only recently added, due to lack of equipment. But the carrier is still paying for leased A330s they aren’t flying and retired but recently renovated 767s (parked in the desert) capable of filling the demand until Boeing can deliver its product. Will Isom find ways to deliver a competitive product to customers?
The Only Way Is Up
American has increased its debt, decreased its share of the market (it was once the world’s largest airline), and now can’t even fly the few European routes it has added. Parker destroyed relationships with labor, Kirby killed the premium aspect of the product and the loyalty program, but the good news is, there’s little left for Isom to destroy. That last statement is somewhat tongue-in-cheek, but also somewhat genuine. The carrier has fallen behind United for premium ground services, Delta for hard product and elite management, and the company is reinventing loyalty in a way that will further reduce the number of status holders.
The good news is that there are some quick wins if Isom can carve a name for himself in Fort Worth. A partnership with JetBlue and new oneworld member, Alaska Airlines, can help the airline recover quicker than the competition. When the airline begins receiving its A321-LR equipment capable of replacing some 757 European routes, the airline may be able to leap past these current route cancellations.
However, Isom will still face a challenge to any serious shift from the way the airline has been run as long as Parker remains chairman, and CEO Isom will have to choose his battles.
Conclusion
Beginning in March of 2022, there will be a new American Airlines CEO at the helm. While the carrier is fertile ground for rejuvenation and ready for a good comeback story, delivery of such remains to be seen. Parker’s lingering presence won’t likely help Isom make the changes he needs to enact.
What do you think? Is American going to see more of the same or a new focus?
Meet the new boss. Same as the old boss.
Ten thumbs up.
Parker needs to let go take his free travel and fly American international and domestic ( here’s hoping he needs to use the bathroom on the 73’s) and he is hungry on a long haul flight.
He ruined the AA brand frankly I don’t see a disciple of his turning it around anytime soon especially with Parker as Chairman. I do know as a AS FF 1mm’er the worst decision the new management of AS made was ponying up to Parker we gained nothing, should have stayed with Delta. I believe AS is going to be a “story” in the near future.
The stock is a steal IF air travel comes back. AA has everything in place to go to $35 a share when the average American isn’t scared by Fauci and his type. The Delta and United fanboys think AA is below them but they are all in the same situation. When the media stops pushing Covid Covid Covid 24/7, AA will be a huge winner for those willing to invest in them. Easy money.
I went from being an ep, going out of my way to fly aa because no other domestic carrier would do, to flying them at most two or three times a year…and only when there was no other reasonable choice. Do I want isom to make me a fan again? Of course. Do I expect it? About as much as I expect my 5’1”, 96-year-old grandmother to play power forward for the lakers.
I should note that my grandmother has osteoporosis and copd. So, you know, not on the Lakers’ radar
Parker was the scourge of the industry in my opinion. He destroyed US Airways and then set his sights on destroying American. As Kyle has noted the brand has pretty much hit rock bottom. I am an AA loyalist, as I am lifetime Platinum, but I literally cringe when I get onto an AA flight. While Delta and United continue to make service improvements, Parker and his ilk have done everything they could to remove all passenger amenities. Remember, Parker started charging for soda at US Air until passenger feedback forced him to abandon that policy. Once he arrived at AA, he learned to completely ignore customer feedback. I have often said that Parker looked to recreate American as providing LCC airline service at full service airline prices. Whether Isom will actually improve things at AA is unlikely. He’s been under Parker’ influence fo too long.
The New American.
AA has ordered the A321 XLR, not the shorter ranged LR version.