American Airlines pilots declared “no confidence” in the airline’s management and requested a meeting with the board over financial and operational struggles—but the board declined, sending them right back to the executives they criticized.
American Airlines flight attendants have already called for the airline’s CEO to be removed. The poor financial performance of the airline means there’s very little profit sharing payouts.
- While Delta employees are getting 8 weeks of pay, at American Airlines it’s 0.3% of pay.
- American used an example where $50,000 employee would receive $150.
The airline’s pilots held their annual meeting in Dallas this past week. They considered whether to call for the CEO’s removal as well. They did not. Instead they expressed no confidence in ‘management’ and asked for a meeting with the board to share their concerns. They did not actually offer a single actionable recommendation for improving the business.
The American Airlines board discussed the pilot letter. But the pilots don’t get invited to a board meeting.
- They get to schedule a meeting with Robert Isom.
- And he wants to talk about pilot attendance, in addition to irregular operations during the recent winter storms and “our business plan to return American to its rightful place atop the industry.”
- That’s a subtle way of saying that pilot reliability is part of the business problem.
While there’s plenty of water cooler talk at American Airlines headquarters over who is set to replace Robert Isom as CEO, this board has no history of holding management accountable for performance.
Even if the board were considering replacing its CEO, they aren’t going to be seen as doing so because the pilots told them to do it. And the pilots didn’t even come out and tell them to do it!
Bringing the pilots union into the boardroom was likely seen as giving them too much stature and inviting an aggressive stance. So the board likely felt it was unwise even if they’re in agreement with concerns that would be expressed.
They’re also not in the business of circumventing management – their job is to hire and fire the CEO, and to approve major plans, not to short-circuit the organization to hear complaints from employees. If they meet with the pilots, every stakeholder wants a meeting with the board (and the pilots will want it again later, too).
How many pilots resigned to show their lack of confidence?
@ Gary while the logic behind the Board’s refusal to meet is sound, an alternative, or perhaps additional, interpretation is that the Board has no intention of doing anything as long as the comp and perks of Board membership exceed the effort of attending meetings,
And hiring a new CEO is both hard and may put their seats at risk
Isom has to be feeling the pressure when he’s wasting precious time, especially board time, having conversations about pilots whining about financial underperformance.
Even if the pilots don’t look great, it doesn’t take a genius to see that it’s also highlighting his failures as CEO and a board member.
Update: AA Shareholders have zero history of holding the board accountable for its own incompetence, including approving stock buybacks averaging $1B/yr during the 2010s despite billions in negative FCF.
I applaud the pilots, and hope they hold firm until they are heard.
@Captain Freedom — Often capital isn’t aligned with workers or consumers, but, even shareholders should know that mismanagement can cost them, too.
@L3 — Nice strawman.
The BOD has a conundrum. Surely Isom should be fired, but who in their right mind would want to take over the dumpster fire the is American Airlines?
Sounds like Marriott dealing with one of their cornucopia of hotel screwups: Got a major problem? Bring it to us and we’ll send you to the party that’s causing the problem. Good Luck With That!
From the beginning Isom was never the right pick by Parker. Hopefully the BOD will begin a search for someone new and outside the America West / USAir ranks.
@L3 – So the capable people should resign to protest the nitwits that need removing? Using your logic, the British Parliament members should all permanently resign when they hold a no-confidence vote.
@Coffee Please
Do you think the current BOD would go for an outsider?
“The airline’s pilots held their annual meeting in Dallas this past week.” That’s why no AA plane in or out of DFW had F upgrades clear.
I’m 100% in full support of the pilots, FAs and others publicly expressing their concerns. I am also 100% in full support of the Board declining to meet with the union. The Board has two jobs: hire/replace CEO and provide fiduciary oversight representing the interests of the shareholders. It is inappropriate for any Board member other than those with c-suite roles within the organization to provide the unions (or any employee organization) with an audience to air grievances regarding management or leadership.
The board needs to go too along with the CEO and rest of the C-suite. Not for refusing a meeting with the pilots but for all the ineptitude they have shown for the past 15 years. Every single one of them needs to be replaced one by one. Completely incompetent enablers of this shit show from the yanking of the seatback screens to the $35 million CEO compensation to the stock buybacks.
I’m fully convinced that none of this mismanagement has been an accident. American Airlines wants to file bankruptcy again. They’re just waiting for the right time to do it. The Biden administration wouldn’t have been advantageous to them and could you imagine Donald Trump after giving all that money to the airlines during the pandemic? No, they’re just biding their time. Mark my words.
The best future for American Airlines is for Robert Isom to resign. As it was said before
he is a nice guy but he (and the rest of the USAIR guys) should never have been able to run a airline.
I don’t understand why the pilots would send a letter to the Board with no specific, concrete complaints or suggestions. They are uniquely qualified to offer operationally-relevant critique; instead, they just used management-speak generalities. Wasted opportunity,
@Aalan — Better than nothing, and, yes, they can always do more.
Historic analogy for your consideration: The pilots are like the American colonists, who felt their interests were being ignored, so they sent a list of grievances to the King of England (the board), who insisted that they communicate through the Governors (management), whom the colonists (pilots) already distrust. Things… go ‘well’ from there.
I knew when I saw that letter to the BOD that it was a waste of time. Until the shareholders ouster the entire board — something they should have done years ago — nothing will meaningfully improve at American Airlines.
They need to rally the Shareholders and you will see what happens but rally the heavy hitters and you will see how they listen the BOD are as incompetent as the Executive Team that doesn’t know what the heck they are doing Incompetents they are all.
When Bob Crandall left, that’s when things started to deteriorate. After the bungled USAir/AA merger it was just full throttle to the bottom and it’ll take forever to recover, if it does. These CEO’s today are the Lorenzo of the past, different face, same outcome. Buckle up.