In the excellent Airline Observer ($), Brian Sumers reports on speculation at the IATA General Meeting over who will be the next American Airlines CEO after Robert Isom. It’s not clear when this happens.
- Sumers asks, could Isom be asked to take responsibility for the airline’s underperformance? Or would the board try to hold on, since Isom’s strategies are their strategies?
- I’ve argued that this board has never held management responsible for its failures. New members have been brought on to protect Isom – even before he became CEO – like his old boss from Northwest Doug Steenland.
Nonetheless, there’s plenty of speculation both about the who and the when. And he flags the worst idea imaginable as also the leading guess over what happens next.
Brian Sumers leads with bringing back Doug Parker, listing him first among the ‘top four candidates’ to succeed Robert Isom at American Airlines. Parker is not yet 65, and remains active in the airline industry including as a Qantas board member.
He calls Parker a “steadying presence” and credits Parker with creating the airline welfare state and driving competition-reducing mergers none of which helps American today. Sumers doesn’t think Parker would help push out Isom, but he might return if the board made that move.
Isom may not have been the right person to turn American Airlines around, but the problems at the airline were created by Parker. Everything wrong with American is downstream of Parker’s vision that the way to succeed in the industry was as the low-cost provider of seats, and Isom followed that vision chasing Frontier and Spirit – just as passengers were increasingly looking to spend more for a better product.
- Doug Parker pushed Scott Kirby out of American, staying on as CEO and selecting Isom as his replacement, giving United the leadership that ultimately turned that airline around.
- Parker destroyed more shareholder value ($30 billion) than any airline CEO in history. He alienated shareholders, employees and customers alike.
- He levered up the balance sheet, creating a legacy of debt, in order to fund over $12 billion in stock buybacks (that, it appears, he sold his own shares into the buybacks). That helped give American systemically higher costs. Meanwhile he did labor deals that continued to keep the airline from outsourcing in industry-standard ways.
- Parker walked away from New York and scaled back in Los Angeles, which meant drawing down from the most important credit card spending and cobrand revenue markets – which is what drives most U.S. airline profit. American’s cobrand card went from number one in spend down to number three.
As CEO of US Airways he traded away their New York position with Delta – giving Delta a once in a lifetime opportunity in the Big Apple – and in 2014 shifted to try to be the airline that brought passengers from other cities to New York instead of serving New Yorkers.
- He retired too many aircraft at the start of the pandemic – Airbus A330s, Boeing 757s, 767s, and Embraer E-190s. That meant the airline was unable to take advantage of the travel boom to Europe, and they lacked the planes to fully build back their route network doemstically too (and fell further behind in Chicago O’Hare as a result).
- American pulled premium seats out of planes from 2015 and onward. He missed the entire changing direction of the industry. He’s why American’s Boeing 787-8s have just 20 business class seats, and why American’s domestic narrowbody fleet lacks enough extra legroom seats. The ‘LOPA Problem’ at American falls on Parker.
- Devaluing the product was under Parker’s watch, from the decision not to install (and, indeed, to pull out) seat back entertainment screens to reducing investment in meals in both the front and back cabins. Parker famously told employees that he ‘never knew people cared so much’ about food as when they moved to US Airways meals in September 2014, and in 2018 that they ‘thought they could get away with’ not installing seat power in planes.
- In fact, he cared so little about the product that when American rolled out its new standard domestic aircraft experience in November 2017 he didn’t even bother trying it himelf until it was in the market for over six months.
- Parker built the board that was ultimately responsible for signing off on these strategies. And in his own telling, the board overall lacked airline experience and therefore lacked understanding of developments in the industry. That meant there was no check on his mistakes.
- And he contributed to the cultural decline at the airline, resisting profit sharing and explaining that front line employees don’t affect profit.
During Parker’s leadership, American declined while Kirby turned around United. Bringing back the Bill Franke protege from America West is the exact opposite of what American Airlines needs at this point.
The irony of course is that Robert Isom is finally signing off on the strategies American Airlines needs. He’s not selling it enough to employees to turn the culture around. But a return to the leadership that put American in its mess in the first place is the exact wrong move – which is why you can’t ever put it past this airline’s board.
Exceedingly well said, Gary !!! Both Isom and Parker have been a disaster for American, a good Executive Search Firm could come up with a vast number of better replacements.
You can bet your sweet bippy that Scotch Kirby is jumping up and down about this scenario.
This can’t be serious!!!!
While we are at it ,why not bring back Hitler to run Germany!!
Brian’s article is interesting but it is still speculation.
Just as at WN, there was a huge amount of time that the changing signs of the industry should have been seen – but haven’t been. BoJo still has a job and seems to be holding on even as WN figures out a plan out of its self-imposed woes. Isom could well be riding a strong wave of recovery; we’ll see in a couple weeks as 2nd quarter earnings come in but I will bet that there is alot more optimism among airlines as fuel prices come down.
Also, Parker as CEO certainly built the greater vision for AA but he hired lots of execs that developed the strategies including both Vasu and Kirby. You can’t villify Parker without holding other execs accountable.
Kirby just learned from his mistakes at AA but they are still his mistakes. UA just have him the opportunity to walk away from AA and apply the lessons he learned at AA but he still failed AA horribly. It’s no wonder he wants to see AA eliminated.
I suspect that AA will post very good revenue numbers for the 2nd quarter and their finances – as with all of the big 4 – will look very good in the 2nd half of 2026 because of the drop in fuel prices. the rest of the industry gains a few more breaths but have been weakened by the 90 day war.
@Tim Dunn – I don’t give Kirby a pass on his time as President at American Airlines (which ended 10 years ago). It’s tough to point the finger at executives below the C-suite.
As for “there was a huge amount of time that the changing signs of the industry should have been seen”… agreed! And so I give you some of your own comments on American:
https://viewfromthewing.com/american-airlines-pilot-chatter-new-heathrow-flights-giving-up-on-lax-and-growth/
“AA made the right decision to get rid of a bunch of aircraft during the pandemic and, given that they have pushed back deliveries of 789s, they aren’t expecting a whole lot of growth but rather reshuffling their network.
Isom is going to stop the financial bleeding that Parker could not do and that has significant implications for AA’s international network.”
https://viewfromthewing.com/american-airlines-ceo-robert-isom-named-worlds-best-huh/
“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.”
AA does lack a coheisive strategy- I am an EP and likely on the cusp of Concierge Key (should hit it this year I think).
All I get is spam emails from them telling me that they value me, but meanwhile I have lost my 1st class upgrades (and even then, it’s only available on bizarre flights/routes). And forget about 1st class seat upgrades.
So the real value was in status when the ship hits the fan… which has worked until just recently.
Last Friday I was flying from PHL to MSP, no weather issues in either city, and as I pull into the airport, my flight that morning was canceled, “Due to Weather”
No advance notification- just an alert to use the app to try and rebook.
And everything was overbooked the rest of the day. If I flew to Dallas, I had a chance.
So I tried standby on the next flight. As a backup, I was able to buy a last minute ticket on Delta.
I showed up for the next AA flight. While I was told I was #1 on the list when I talked to the agent at the service center, when I walked up I wasn’t listed. They then ‘found me’ and I was #1.
They started boarding the plan, and there were 3 seats left….. and then the #3 guy in the list got the green highlight!
WTF?
So 2 seats left, right? Nope. Two AA pilots showed up last minute, and took them,
Flight closed.
So while I have been defending AA for years as an EP, this really pissed me off.
And the agents simply didn’t care.
I took the Delta flight and it was light and day different, and actually had a pre-flight beverage without asking.
-Jon
Pretty apparent that Parker was of the opinion a successful airline looked more like Spirit or Frontier. Remember he even took USAir and turned it into America West.
AA has been making some positive moves. More transparency on delays. Significantly improved chances of a pre departure drink. Plans for bigger/improved lounges. They still have a way to go. For example, seemingly never having a marshal crew ready in place for an aircraft arriving late at a hub. Apparently having no clue that PHX is in fact a hub airport.
Whoever sits in the chair inherits a set of binding constraints that don’t care whose name is on the door. Two in particular.
On Tim’s Q2 point: a fuel-driven beat is arguably the worst outcome for anyone hoping the board finally acts. Cheaper jet fuel flatters absolute revenue and compresses the visible gap to DL/UA precisely because fuel is the one big cost line all four share. The structural tell was never headline revenue. It’s the managed/corporate revenue index against peers, the one number that still hasn’t recovered after AA torched its agency and TMC relationships chasing direct distribution. That was a revenue-quality wound, not a cost wound, and a fuel tailwind hides it better than anything. Print a clean number in two weeks and you’ve handed this board the exact excuse it’s been waiting for to do nothing.
Second, deleveraging and refleeting are competing for the same dollars. Every turn of net debt AA retires is capital it isn’t spending reconfiguring narrowbodies or backfilling the premium it stripped out. So the fixes Gary rightly credits Isom for are capital-rationed by construction. Not because Isom can’t see them, but because the balance sheet meters them out. A returning Parker, a clean outside hire, the search-firm dream candidate: none of them changes that math in the eighteen months that actually matter.
Which is why the “who” is nearly beside the point. Tim is correct that you can’t pin it all on one man. But the corollary is you can’t fix it with one either. You don’t swap a CEO to repair a capital structure and a corporate revenue mix; you swap a CEO when the board wants a narrative. And narrative is the only thing this board has ever reliably bought.
The Board at AA has already fired up the (Uber) jet for Parker’s imminent return. What a buch of hapless losers…making Scott Kirby look like Steve Jobs.
The headlines “Parker created the mess at American Airlines”. He has to one of the worst CEO in aviation history. The guy was a disaster.
When you hear a friend say, “my ex husband and I are getting back together”, your next words are usually, “there’s a reason you divorced in the first place”.
Ohhh…the IATA CONFERENCE!!! Enough of the armchair quarterbacks trying to get clicks with idle speculation from the water cooler.
Isom has adapted.
‘Board oversight’ is an oxymoron. They have enabled the slide to oblivion to continue.
Not a huge financial person more just a regular AA flyer but can someone comment how Isom has been bad for the airline.
In my view, he seems to be turning the airline around from the Parker days and he seems to be trying to focus on a more premium experience. This year I have seen a noticeable difference in many facets.
I’m not saying he’s a perfect but to put him in the same camp as Parker isn’t fair. If anything he is making these changes behind the scenes and is definitely not a face guy like Kirby.
@Shawn – You’re not completely wrong. The premium push is being evidenced by more extra-legroom seats, the new flagship suites, the various lounge investments, and dumping the direct-distribution mess that drove corporate flyers away. So as a passenger, 2026 AA is a noticeably better product than 2021 AA, and Isom signed off on most of that.
The knock on Isom isn’t really “he’s Parker.” It’s two narrower things.
One is timing and pace. A lot of these fixes are AA catching up to where DL and UA already were years ago, and AA is doing it from a worse balance sheet, so it’s playing the upgrade game with less money and a later start. Better than nothing, but “turning it around” and “closing the gap” aren’t the same thing, and on the second one the jury’s still very much out.
The other is culture and execution, which is where the Parker comparison actually has teeth. The strategy can be right while the airline still can’t reliably run a hub or make a frontline employee feel like the plan includes them. That’s the part stories like Jon’s upthread point at, and it’s the part a premium-seat map doesn’t fix.
So you’re getting the better-product half right, and the people calling him Parker 2.0 are overdoing it. The real argument isn’t whether he’s improved things; it’s whether improving slowly, from behind, with a thin wallet and a shaky culture, is enough when the other two aren’t standing still. My money’s on that it probably isn’t.
“It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.” — Theodore Roosevelt
Its easy to take potshots when one has the benefit of hindsight.
@DesertGhost – “Its easy to take potshots when one has the benefit of hindsight.” None of this is post-hoc. I wrote about each of these bad decisions contemporaneously. They were obviously wrong at the time, and folks like you would write that he’s a CEO so he knows what he’s doing. Virtually every decision he made after acquiring American Airlines was destructive – of shareholder value, of employee morale, and of customer loyalty.
Gary,
I don’t disagree w/ a thing I previously wrote and you cited.
AA”s fault wasn’t getting rid of widebodies during covid. They haven’t made money flying the Pacific in a decade and were just breakeven on TATL before covid and lose money on TATL since covid. They are giving the XLR a try and while it might not be hugely profitable, it might allow AA to maintain a presence in major markets like JFK w/o losing so much money.
Parker’s biggest blunder – and it is all his – were the stock buybacks when AA was barely making money and also taking delivery of large numbers of aircraft as fleet replacement, undoubtedly as Kirby pushed for newer aircraft to lower costs and to upgauge.
AA’s southern tier of hubs is still its best asset; NYC and LAX as well as CHI are still major credit card markets so AA has to stay there. I believe they can offset their big 3 US market strength w/ volume in the southern tier and good revenue at CLT and DFW.
I think Isom will survive and AA will slowly clawback to health.
and let’s keep in mind that the comparisons to UA need to be revisited after all of UA’s labor cost increases kick in and as competition heats up on the west coast and TPAC.
Isom may support a new vision but seems to lack the capacity to lead people to support it. Parker can lead whomever in whatever direction.
@Flyer1 Eliz Taylor Divorced one husband twice So the 2nd time around does not always work. The Airline industry is like a family sleeping together moving from one bedroom/boardroom to the next. It just does not work and turns out bad.
Parker’s return would mean fresh bankruptcy + merger. He’s THE expert on this.
Tim and Mike both make good points. One dig Tim, Parker did not hire Vasu, he was at AA. Might have promoted him, but didn’t hire him.
AA realized too late in the game that “premium”makes $$s. It’s needed anyway.
Nate Piper should be named CEO. He’s got fight in him. AA employees would revolt if Parker came back.
Maybe Crandall is available. Everything went to crap after he left.
Sure, parking paid for wide body aircraft ahead of the greatest surge in international travel demand didn’t exacerbate other problems. Whatever you say TD.
As for UA contracts we certainly will see. The IAM deals for over 30,000 employees will likely be ratified on 6/26/26 only a year past the amendable date and the UA mechanics just got a 6 -7% “Industry Reset Model” raise last November to keep their wages at industry-leading levels. So, as I have previously said the F/As were the only United employee group that was significantly underpaid for any period of time and for which much has been previously accounted. Since United is repeatedly predicted double digit margins in 2027 it is clear that your dog don’t hunt.
Best of luck to DL in talking over the TPAC.
“Parker famously told employees that he ‘never knew people cared so much’ about food as when they moved to US Airways meals in September 2014, and in 2018 that they ‘thought they could get away with’ not installing seat power in planes.”
This is very telling and damning. Only an incompetent leader overseen by a negligent board would actually make these changes *without* first learning what their customers cared about.
If the AA BOD brings Dougie back I seriously hope the unions will stage wildcat strikes. Otherwise they are going to be taken to the NW dumpster as per Doug Steenland
Word has it that Parker will earn his diploma from the Betty Ford Clinic in October. Tanned, rested and ready to get his hand back on the (bottle) throttle in 2027.
I worked for USAirways and did union work. I am a flight attendant. I am completely disgusted with Isom, who I call idiotsom. Right now he is adding row after row to the back of the airplane so he can add more rows in FC. Nobody, and I mean NOBODY pays for a FC ticket. Everyone is either on mileage or points on the credit card but not paying cash. He’s got so many rows crammed in the back the passengers can’t move at all in their seats. People are getting cranky because they can’t move an inch and in FC all they want to do is drink!! Gangwal and Wolf did a much better at managing the airline than isiotsom, who doesn’t even fly on our planes because he’s got his own. Scotch Kirby slugged a USAirways flight attendant because she cut him off when he was drunk. We need someone who wants to run an airline not what we have.
Kirby didn’t turn United around, Munoz did. In fact, Kirby weakened a lot of the premium improvements Munoz made. To Kirby’s credit, he eventually realized that he was screwing up again – as he had at American – and reversed himself. Matthew at LALF, then a huge United loyalist, coined a term for the worsening Kirby did on a regular basis for his first couple of years: Kirby Kuts.
Is there anyone here who disagrees with the following? All America West an USAir execs at AA should be fired.
Agree. American Airlines was a great airline before the arrival of Parker, Isom and the USAIR guys.
If there is a right choice or a wrong choice to be made American Airlines is always guaranteed to pick the wrong choice from my observation when talking the current day airline. Weighed down by tok many chiefs, not enough Indians, it is only by shear inertial institutional mass they continue to exist.
Christian,
well said,
Kirby has learned from a lot of his mistakes but he has left a large trail of damage in his wake.
and Munoz did a lot to improve UA’s employee and service culture but he wasn’t the expert on network. Continental had just done such a poor job of its own network outside of its hubs and so there was a lot that could be done right by anyone. AA and US both had better managed networks than CO even if the AA/US product was poorly managed.
@Tim Dunn – Extremely valid.
@Gene — LOL. *cracks knuckles* h’welp, ‘bout time for ‘nuther airline bankruptcy… huh’yuck!
Also an AA employee… Formerly US Airways. Isom is not popular amongst employees, but Parker seems more popular.
Everything that everyone is shitting on US Airways about us wrong, and should be just blamed on Isom.
The only thing US Airways didn’t have is seatback screens, but aside from that the operation was solid. We were on time and organized. We didn’t have routine delAAys…
So to me, as a former US Airways employee, is that US had a better operation but AA had more bells and whistles. The most obvious example are seatback screens, but they also had better hub cities and international destinations. I am proudly legacy US, but I am wholeheartedly pro-seatback screen.
I believe that all Isom has to do is restore seatback screens to make everyone, employees and passengers, adore the brand. I’m shocked there’s not more outrage at the delAAys.
@Adopt and Go – AA had long haul, better lounges, more food, seat power and wifi much earlier. LUS and HP never even completed their merger until the AA deal because of toxic labor relations with the pilots.
@Adopt and Go — Thank you for your service (and support of seatback screens!)