After Thursday’s American Airlines third quarter earnings call, the carrier’s senior executives held a “State Of The Airline” event for employees, a recording of which was reviewed by View From The Wing. It was a highly contentious affair come the question and answer period.
- CEO Robert Isom stuck to the same plans that aren’t working while acknowledging they aren’t driving profit – that merely operating an on-time airline is enough:
It’s not just about operations performance for operations performance sake. You perform well in terms of reliability, you keep revenue, you enhance revenue, and you reduce expense. There’s no better way to run the airline.
Yet he also acknowledged that “record revenue isn’t record profitability. That’s the real key in this business.” American has performed better operationally, but not financially!
- CEO versus an employee on Israel-Hamas. Robert Isom condemned the attacks on Israel and he added, “We have people, we have planes, we have crews that have been impacted.” Head of government affairs Nate Gatten added that his October 7th day began on Twitter. American had a plane enroute to Tel Aviv, and they decided to get crew out on that plane thanks to the local station manager. I’d asked American, United, and Delta whether – with service suspended – they were continuing to pay local staff and contractors. Not one of them was willing to answer.
A headquarters employee in commercial planning challenged Isom:
I hope you can acknowledge that there are also innocent lives being lost on the other side, Palestinians as well…there are two sides to every issue.
In response, Isom offered: “We fly to Israel, we have team members in Israel… and I know that there is all sorts of conflict in history that goes back forever. But terrorism must be condemned… it is unconscionable where innocent lives are at risk…my prayers go out to everyone.”
- Customer relations employees see no hope. Their department, which tries to retain unhappy customers, has been outsourcing. American argues this is good for employees – less mandatory overtime! Meanwhile they believe the “automated system responding to customers is faulty” and they have the “lowest wages in the industry.”
A customer relations employee shared that their director told that that the work they perform is “generic” and that “no cost of living [increases] would be considered” – though employees leave for other airlines making “$15,000 more.” That same director, we were told, also said that if employees in customer relations “want to get paid what reservations gets paid… need to go work for reservations.”
- They think they’ll get the New York JFK – Tokyo Haneda route authority. Senior Vice President of Network Planning Brian Znotins said they’re “really excited about the JFK Haneda opportunity” comparing Haneda to Washington National versus Dulles but that Narita is even more undesirable than Dulles.
Japan Airlines, he points out, has more Haneda flights than Narita opportunities for connections. And Robert Isom added that “I know our JAL friends would be very happy” if American gets the slot. Their proposed filing was made in conjunction with Japan Airlines conversations (naturally, since it’s an anti-trust immunized joint venture).
This is the slot that Delta gives up, not wanting to operate Portland – Tokyo Haneda that they’d previously been awarded, and that United wants to use to replace its Houston – Narita flight. (United JV partner ANA already flies Houston – Haneda, while American JV partner JAL already flies JFK – Haneda).
Overall the session was probably the most contentious since the head of the mechanics union confronted Robert Isom promising “vicious strike action..the likes of which you’ve never seen” before the 2019 summer meltdown they caused by an illegal job action – but that got them the contract they wanted.