Congratulations to the American Airlines corporate communications team. They scored a big win for their boss, with airline CEO Robert Isom named CEO World‘s Best Airline CEO for 2023.
This win really does belong to the PR folks. While the publication doesn’t reveal its methodology, any reasonable ‘Best CEO’ evaluation has to look at the individual’s value add against the assets they’re working with.
In Isom’s case, having been in the role for about 15 months, it should be simple to evaluate value-add against what he inherited. In that way his contribution can be measured in some sense (even if specific wins are attributable to an executive in his employ, he’s responsible for the team). And I’m genuinely at a loss to come up with his specific value add.
The results of this survey, though, are genuinely odd.
- Ed Bastian at Delta is second, and while Delta generally outperforms peers it hasn’t outperformed by as much for instance in mainline cancellations as it did prior to the pandemic. Doesn’t that suggest his performance has fallen?
- Scott Kirby at United is behind both Delta and American, but Kirby arguably adds the most to his airline relative to his predecessor, who was generally liked but inexperienced in the airline business, and relative to his predecessor who was ousted in the New Jersey Bridgegate scandal involving bribing a public official.
Kirby actually changed the strategy of the airline and positioned the airline for significant growth while making innovative investments for the environment.
- Southwest’s Bob Jordan rounds out the top 5 in the world. While the carrier is historically strong, and with a positive culture, he’s relatively new and presided over an epic meltdown – driven in some measure by IT that he had previously held responsibility for.
- Putting the CEO of British Airways in the top 10 is bizarre, bottom 10 might be closer? Evaluating the CEO of Emirates is weird, since his major contribution is getting airline President Tim Clark not to leave during the pandemic. And how is China Southern’s CEO among the best, and ahead of Qatar Airways CEO Akbar Al Baker?
- They evaluate both the CEOs of Air France and of KLM, but not Air France KLM. And both are ranked higher than the CEO of Singapore Airlines, which just made its biggest profits in airline history. Etihad’s CEO is included in the top 20 despite only being appointed in the fall?
- Aeroflot’s CEO is ranked higher than Spirit’s, though the latter managed to sell his carrier for a massive premium, netting payouts to his shareholders even if the deal doesn’t go through. Is there any win greater for a CEO? While Aeroflot CEO’s has allowed his carrier to conceal malfunctions and utilize expired parts jeopardizing safety.
- Meanwhile towards the bottom of the list at #47 is the CEO of Thai Airways, despite that carrier emerging from bankruptcy and returning to an operating profit
Despite the leadership being recognized by CEO World, American Airlines remains perhaps the carrier in the world with the greatest potential to be better than it is today. Isom’s American follows Delta with its pilot negotiations; an operation that performs better than when he was COO but that doesn’t lead the industry; and a frequent flyer program that’s been innovation with elite qualifications while sliding substantially in delivering consumer value for redemptions.
American is seemingly at a crossroads. Its cost structure requires a revenue premium, and new labor contracts will cost it even more. Without convincing customers to spend more for its products they won’t be profitable. While the message of CEO Isom, as he assumed the position, was for employees not to spend a dollar they don’t need to.
Yes Isom gets on board and says don’t spend a dollar you don’t NEED too, but then a few weeks later DOUBLES his and his immediate underling manager’s salaries. All the while happy to kick the contract can down the street for many more additional months……
Any ranking can be manipulated based on how success is defined and how each metric is weighted relative to the others. I would imagine by some metrics Isom has done a great job. By other metrics his tenure has been an absolute dumpster fire. While I’m sure this PR boost may have short-term impact on how AA is perceived by some, I doubt it will move the needle with respect to consumer purchasing patterns.
After Parker (Former CEO) destroyed a once great airline things could only improve at American Airlines. Congratulations to Robert Isom.
This list makes no sense to me. I would rank the airline CEO’s on their execution for their customers. After all, happy customers are the ones that pay the bills. Is this list pay for ranking?
AA has been turning in some impressive operations recently. Perhaps it. is that.
The CEO of British Airways should be in the dock in The Hague, standing trial for crimes against humanity. Not on this list.
Scott Kirby is nothing but a bag of hot air.
Anyone that can’t see how unrealistic his plan of world domination is need only look at flight cancellation statistics on flightaware and other flight tracking sites.
This has been an absolutely horrific week for air travel but United is distinctly and decisively much worse than every other airline and that has been the case for a week.
Neither United nor the national aviation system can handle the growth that Scott Kirby is throwing at it and United will look this summer like Southwest did during the winter with enormous implications for its ability to grow in the future
Isom and his groupie executives are horrible! Treat employees poorly, disrespectful. Give nothing but bad service to customers. American went from #1 in service and international service to the worst under USAirs personnel guidance. We would be better off with a college grad outside of the airlines with better vision than him
This ranking must have been done by someone from Dallas. I too believe that this is simply not correct.
Here is the profitability of the US3 airlines, using Return On Capital Employed — how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. This is the best measure, it’s the equivalent to how much interest you get for $100 in a bank.
* DAL: 10.4%
* UAL: 8.2%
* AAL: 5.1%
It closely tracks customer satisfaction and the quality of the product (as usual). Turns out that the airline industry is no different than any other customer.
Anyone is better than Scott Kirby. He is the worst CEO in the UA history.
Jake,
while your points are valid, there are multiple metrics that should be considered – but, you are right, that Delta outperforms American and United on nearly all of them.
Problem is that they all took different strategies during covid and the implications of each are playing out.
The quarter ends in a couple days; Delta just had its investor day today and released a large powerpoint presentation that anyone that is remotely interested in the business of the industry should read; it can be found on DAL’s investor website.
The biggest thing that can be said about Robert Isom is that he is finally running AAL like a business. He has told people like Vasu to stop flying routes for “strategic purposes” when they lose money. He is growing AA’s domestic system where it makes sense and taking advantage of AA’s very formidable southern US route network. He has slashed spending which will allow AAL to quickly improve its balance sheet but AAL has very limited growth capacity – unlike DL, UA or WN.
Delta got rid of a lot of older aircraft and retired alot of people during the pandemic but has now dramatically improved its cost efficiency. It has as much near term growth capacity as UAL but is spending far, far less to get that – in part because it has balanced new aircraft w/ used aircraft acquisitions plus reactivation of older aircraft. Delta is expanding its revenue advantage including its Amex relationship which delivers far more revenue than any other airline in the world from their loyalty program. It is that revenue surplus that is helping to fund DL employees’ pay raises which no other airline has been unable to afford – or been willing to do so far.
Finally, DL talked alot about its maintenance repair services as part of its profit expansion strategies. Other airlines simply cannot match that because of multiple factors including labor reasons.
Delta acknowledged that they are still working on a widebody order and, while they did not say it publicly, they have received a proposal from Boeing and GE for the 787 and now have to weigh the possibility of bringing the 787 in for much higher MRO revenues but at the expense of operational efficiencies. Rolls Royce is apparently not willing to give DL overhaul rights on the Trent XWB 97 engine that powers the A350-1000. However it turns out, Delta will end up with a significant and growing cost and revenue generating efficiency compared to its peers.
And United is simply being driven now by Scott Kirby’s need to prove to everyone in Dallas that they fired the wrong person. There is no way that his growth strategy can deliver the margins that AA and DL will deliver given the enormous price he is willing to pay for an advantage that he thinks will occur but will almost certainly not materialize.
Bob Jordan is stuck w/ fixing some deep structural problems at LUV but Southwest has very deep winning DNA that includes the ability to adapt. They will do fine.
All awards are paid for. You think companies get JD Power awards for free. They are purchased.
Mets Fan is right here, though there are exceptions (try buying a Nobel Prize). By specialty there are “best physicians” rankings in our city’s magazine. A newspaper reporter investigated and found that all it takes is a little cash to be ranked right up there. (But nothing changed after that expose came out.) I would guess that is the situation here.
financial rankings are not bought.
All of the large jet US airlines are publicly traded companies.
If you think they are reporting false information, report them to the SEC.
Otherwise, accept that there is a difference in how well companies run their business.
and specific to operations, United has cxld 20% of its flights today and delayed 43%.
American and Delta are both at 3-4% cancellations and 22-23% delayed.
United simply overestimated its ability to operate in the current environment and its operation is incapable of handling the very well predicted challenging summer.
I can’t believe that anyone would read this post, much less comment on it. It’s so nice to be constantly tortured by the airlines and know that at least American is the best at obfuscating reality. I’d say what a bunch of morons … but I’m the moron for continuing to travel despite the airlines and hotels gouging me at every turn. That bunch of morons is laughing all the way to the bank.
Why the hate?
Isom has done an excellent job as CEO. AA now has about the most reliable operation of any major airline in the world. Less than a year ago, you wrote “American Airlines Could Face Chapter 11 Bankruptcy.” Instead, they’re making BILLIONS. And you want to begrudge him an achievement award? Really?
Oh, I forgot to note that Isom has even made frequent flyers happy. Just yesterday, the Frequent Miler wrote “Why AAdvantage is my new favorite mileage program.” So a CEO who makes his customers AND shareholders happy isn’t doing an impressive job? Really?
@drrichard
Agree on Nobel Prize but if you remember a certain president won Nobel Peace Prize after being in office less than 8 months and have few if any accomplishments
United Airlines has already cancelled 332 flights for today (12% of its entire schedule) before a single ATC delay has been issued for the Northeast or any other United hub.
United is simply running its operation beyond its own ability to recover from the very expected weather issues which are the norm at some point in the summer as well as the ATC shortages which the government warned airlines to prepare for earlier this year.
United’s growth strategy is built on pushing the system even further over the coming years – and yet it is clear that neither United or ATC can handle the expected growth.
Instead of accepting that reality, Scott Kirby, UAL’s CEO argues against the FAA for not preparing – which is true – but airlines and consumers were warned and UAL simply did not prepare.
@tim dunn — Right, the FAA is making life miserable for UA, and UA did not do enough to plan for this misery. I guess they will have to learn.
There is definitely something to be said about structuring your operation to deal with irregular ops — whatever their cause. AA is now the best airline in the world in doing that, and that’s why selecting Isom (an operations guy) to be CEO was a smart move by AA — and why Gary’s backhanded criticism of his award is silly. Just look at today, and look who’s already completely recovered from the Northeast fiasco.
sticks
AA ran a crappy operation for years and they did indeed recognize that DL gets alot of extra revenue from customers that are willing to pay for a more reliable operation. Isom has indeed tried hard to fix alot of the problems that were endemic to AA.
Problem is that AA is not exempt from the same weather that hits every other part of the country and esp. S. Florida and Texas. While AA might do a better job in minimizing cancellations when everything is going smoothly, they, just like DL, UA and WN have so many hubs that something is inevitably going wrong.
Actual DOT statistics show that DL is running the best operation of the big 4 and have been for years – even including the “mini meltdowns” that DL experienced during some holidays a year or so ago.
And completely unlike DL, AA has absolutely horrific IROP recovery including informing customers and other members of the AA team of recovery plans. There is an extensive thread on Ben’s site of a specific occurrence where AA uniquely failed in its customer service handling and multiple acknowledge that is the norm at AA but not at the other big 4 other than WN during its massive Christmas meltdown.
And let’s also not forget that AA is a fraction of the size of DL and UA and B6 by percentage of operations in the NE – specifically because AA turned over so much of its operations to B6 in an arrangement that has been determined to be illegal.
The NE Is an absolutely pain in the backside to operate in and AA hasn’t demonstrated that it could do so for many reasons financially or operationally any better than other airlines.
Don’t crow too loudly about AA’s operations because data does NOT support that they do better than everyone.
Tim totally agree. AA has improved during and since the pandemic, DL has flatlined and UA is seeing some promise. I love how people quote metrics and think they know everything about a business. AA is 100% union verse DL which isn’t and make it a totally different business model. AA is almost more domestically focused, with SA/Caribbean their second largest market, and builds off their OneWorld partners for global reach, DL and UA do less domestically and more internationally focused, very different models. The next few years will show AA pulling out some big financial wins, while UA will increase their debt following the same failed direction that AA did when Kirby was there. DL is DL and will cut cost and keep it’s old planes flying.
viking
you were doing good for a while there.
first, AA and DL have both improved their operations this summer vs. last – and so has WN and NK. UA is much worse. UA was cancelling more flights before the start of the day than any other airline for most of the summer – long before the weather problems in the NE.
second, UA, not DL has the oldest fleet. And if fleet age had anything to do operational reliability, then AA should be as much ahead of DL as DL is ahead of UA in operational performance but none of that is true. Fleet or aircraft age not only has little to do with reliability but it also has nothing to do with financial results – because AA, despite having a younger fleet than DL, UA or WN, AA’s finances have been the worst of the big 4. Fleet age is nothing but a bragging point. AA is addressing the issues that drive operational reliability that DL addressed years ago.
And AA’s customer service metrics still are far below DL’s – because people are part of the operation and AA employees apparently have inferior tools to DL and UA – as witnessed by crews and gate agents having no idea where all of the pieces necessary for a flight come from – and AA does a much worse job of taking care of customers than any other airline, esp. in IROPS
These “awards” are determined by PR departments of the various major carriers. Each year they are rotated around. They never have any relation to actual performance and/or achievement. As noted, no mention is made of the criterion. When this guy was in charge of airline operations, it was a trainwreck and nothing improved. He has only run with the baggage he and Parker presided over as they tore apart a once great airline!
“Scott Kirby is nothing but a bag of hot air.” Wow…you do stand up too Dunn? If ever there was a case for the pot calling the kettle black.
David,
I don’t run an airline or anything else that affects millions of passengers per day.
And let me simply say out loud what is being said in whispers.
Scott Kirby has screwed w/ his pilots and getting a new labor contract for over a year – after saying they would get the first post-covid labor contract. Of course, the union bears some of the blame but the union has put forth multiple proposals which, according to UA pilot leadership, the company has been dragging its feet on implementing.
Is is possible – of course it is – that United pilots are simply not going to pick up the extra trips that it takes to put the airline back together after massive irregular operations? And neither are UA FAs who also do not have a new contract.
The reason why other airlines recovered is that they have tools and very likely better cooperation with their companies to fix operational issues.
UA employees are not about to say that they are not working as hard as they can because they can get slapped with a labor charge – but you kinda wonder how quickly this would all get fixed if UA announced that it was spending the $8 billion plus over the next 4 years that DL spent to get a pilot contract.
Notably, AA signed an AIP with its pilots, dragged its feet in converting it contract language, pilots started getting frustrated which is not a good thing in the middle of the summer, and AA managed to finish the process and the union is now doing its thing to get it out for a vote.
Scott Kirby’s plan all along has been to tout metrics like numbers of new aircraft instead of getting its employees taken care of to ensure the operation would stand up.
The reason for UA’s significant problems in handling weather of the past week is undoubtedly due to labor dissatisfaction whether they say it or not. UA wasn’t dealt any worse hand than anyone else.
If the report card was done at the end of this week, Scott Kirby would get an F-. Trashing the FAA when it is apparent there are issues at UA that distinguish negatively their operation from everyone else’s seems foolish at best.
but, yeah, I’m just a pot calling a kettle black
more and more United crewmembers are saying that they are waiting multiple hours to get through to crew scheduling to get rerouted, are going to hotels on their own, and trying to communicate w/ crew scheduling where they are – with very long times to rebuild the schedule.
in other words, this is EXACTLY the same type of situation that brought down Southwest in December – and while it, so far, is not as bad as WN in December, it does explain why UA’s operation is so much worse off than every other airline in the same region.
UA has apparently lost control of its operation and is trying to rebuild its schedule manually. Already today, 20% of UA”s operation is cancelled and 39% delayed, making it very likely this will take several days more to fix
No other airline has cancelled anywhere near the number or percentage of flights as United.
this isn’t caused by the FAA at all despite Scott Kirby’s blame and deflect letter to employees.
@gene The same Isom who did not notify pilot applicants that their private info incl ss, passport, dl, and pilot number was hacked 7 weeks ago. Yeah sure. The same Isom who will not set pilot contract deadlines so it can be voted on…sure.
@gene The delays are due to ATC. They are short staffed and a pool of new hires that could not pass the test were put in to “holding status” instead of being let go.
@Tim Dunn — I don’t have the historical stats. But, this year, how many days has AA has more cancelled flights than DL? That was DL’s claim to fame: they, sometimes foolishly, almost never cancelled flights (I personally know this, having been on DL flights that were 8 hours late!). If we pulled up the stats, I suspect there are more days when DL has more cancelled flights than AA. I know you’ll do anything to deny it, but I don’t think a reasonable person could say that DL’s operation now runs better than AA’s. It’s just not true.
United cancelled 23% of its flights today and delayed 42%.
No other airline comes anywhere close.
There were virtually no ATC delays in UAL hubs today.
United is in an operational meltdown while their CEO blames the FAA
The DOT publishes airline delay and cancellation rates. Delta is nowhere near below AA or any other big 4 airline.
My cat is smarter than American Airlines senior management!! They have done an absolutely PATHETIC job taking care of their customers as well as its own employees!! Shame on you AA!!!
Before 6 am eastern time, United has already cancelled 10% of its mainline departures.
United lost operational control and is trying desperately to regain it.
United trashed WN for doing the exact same in December that United is now doing.
American has run a much stronger operation under Robert Isom. That is indisputable. but they still are not industry leading for cancellations and delays. Despite its repeated mini-holiday meltdowns in 2022, Delta managed to have the best on-time among US airlines in 2022 and were still in the upper tier among least cancellations.
AA has not improved their customer service metrics anywhere near as well as their operational metrics. That ALSO is indisputable.
It’s laughable that any U.S. airline CEOs are at the top of the list.
Isom and Raja have driven AA into the toilet. Been a CK for 13 years straight (2 of them granted by AA due to COVID). I’ve never seen AA be so bad. 50% to 75% of all my flights have an issue…..be it on time, customer service, onboard service….the list goes on and on. Either I have the worlds worst luck (statistically that’s impossible) or this is PR horsesh!t. Isom should be fired not given accolades. Anyone who sucks up to Bill Franke is not qualified to run a full service global carrier full stop
WHAT A JOKE! I have been sending to virtually each and every one of AA Corporate Directors for a response to honor the commitment that was made to me regarding 75000 points each for my husband and myself by Customer Service. This due to a mess from the last trip we were on to Italy in Sept. This week I sent the eighth email and no response.
” American Airlines CEO Robert Isom Named World’s Best. Huh?
by Gary Leff on June 27, 2023
Congratulations to the American Airlines corporate communications team. They scored a big win for their boss, with airline CEO Robert Isom named CEO World‘s Best Airline CEO for 2023″.