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?