American Airlines Preparing For Retirement Of Doug Parker, Elise Eberwein

According to an announcement by the firm that American Airlines tapped to find its new Chief Human Resources Officer, the role they’re hiring for will eventually report to Doug Parker’s replacement – who will be an internal hire – once Executive Vice President Elise Eberwein retires and the airline replaces Doug Parker as CEO with an internal candidate,

The CHRO, who will be based at the company’s headquarters in Fort Worth, TX, will report to Elise Eberwein, American Airlines Group’s executive vice president, people and engagement. The airline is in the midst of a multi-year strategic succession planning process that is designed to prepare an internal executive for the chief executive officer role. “As that transition occurs, there are other key leadership transitions that will soon happen, including Elise’s retirement,” said the search firm. “After these moves take place, the CHRO will eventually report to the new CEO, who will be a key part of this interviewing and selection process.””

To be clear succession planning at American Airlines is not new. As part of this process in 2016 Scott Kirby was let go as President of the airline and hired on by United (he’s now United’s CEO). Parker described what happened in a session with employees.

And as we sat at the board level and talked about succession planning, we had a real concern about our ability to keep that team together. Someone was going to leave. So rather than watching and guessing who that was and trying to react we were proactive.

We’d like to keep me, Scott and Robert and keep doing what we’re doing for the last 20 years together but it doesn’t look like it’s going to be the case. So let’s not let something happen that we didn’t manage so what do you want to do, what’s the best scenario of two of those three, and we decided the board decided it was me with Robert.

My guess at the time was that this was reactive, that United might even have offered the President job to Isom and so the board had a choice – Parker wasn’t ready to retire, so they weren’t going to be able to retain Kirby (no upward path), and so they decided to let Kirby go and promote Isom, since he’d have longer runway until expecting his next bump up to CEO.

Of course it’s possible that what American said at the time was really true, that this was part of their long-term succession planning, and they really did decide they wanted Isom for the future rather than Kirby (or didn’t think Kirby would wait around long enough). Either way Isom would have big shoes to fill dressing up as Billy Ray Cyrus and Boy George for Halloween.

Lucky at One Mile at a Time suggests “one wild card option would be Vasu Raja,” but it’s almost certain that current thinking is Robert Isom succeeds Doug Parker when Parker retires. Parker was already talking about his legacy before the pandemic.

American recently added Isom’s former boss, ex-Northwest Airlines CEO Doug Steenland to its board. That could bolster Isom’s chances as well, though Parker just suggested the move was because the board of the world’s largest airline lacks airline experience.

As for Elise Eberwein, when she steps down from her role perhaps she’ll have more time to write airline trip reports.

Of course the best plans are always subject to change by circumstance, and current planning for an internal candidate to succeed Parker – perfectly par for the course for any major public company – could be disrupted.

(HT: @CrankyFlier)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Isom to CEO is all but assured whenever DP hangs ’em up.

    Incidentally, pre-COVID I understood there to be momentum at the BOD level (and certainly the investment community) to make a less-than-voluntary change at CEO in favor of an external candidate.

    CARES and the strings attached to it – w/r/t executive comp, primarily – completely changes the calculus for attracting quality candidates to airline management. Under the circumstances it probably makes more sense to promote from within.

    Raja is an interesting one to watch but it’s not quite his time yet. I would, on the other hand, expect to see him promoted to Isom’s role (President) when the time comes, if he stays with the company.

  2. American badly needs fresh thinking from the outside, so they specifically choose another insider? They have unhappy stockholders, unhappy employees and unhappy customers, with the most engaged AAdvantage members (AAdvantage being what actually earns money for AAL) being the most unhappy. Who in their right mind would possibly think that more of the same is good?

  3. @Gary – that is true, but there wasn’t going to be a snap decision in any event, and I don’t know if that wa’s necessarily indicative of Doug getting out of the woods on the basis of a good Q4 2019. AA still underperformed UA and DL in the full-year 2019 but it’s tough to sell the upheaval of a leadership change when the company made more than a billion and a half dollars.

    Since this post, Elise makes it clear this is not an imminent change, although we might see something like United’s transition from Munoz to Kirby, i.e., a long farewell tour and clear disclosure of executive succession. I would not anticipate seeing that before a material upward trend in AA’s results, suggesting we are putting COVID-19 in the rear view. I don’t think Q1 or even Q2 of this year will get us to that point, sadly.

  4. Isom will be nothing more than the SAME. A fresh CEO from outside would be best. How about Robert Crandall coming out of retirement to take the helm again to make AA a first class airline again.

  5. The unions will be so distraught if Doug Parker retires. I mean, the unions dumped Tom Horton and got into bed with Parker….even smoked a cigarette afterward.

    Because in the end, Parker screwed them.

  6. Crocodile Tears are flowing for the man that for the most part ruined American Airlines its program its loyal customer base and its once decent customer service.Good riddance and don’t let the cabin door hit you on the way out.I’m not certain anyone can rescue it as this point.It would take a miracle but I would return in the morning if they came back to what made them a solid airline & program for decades .But seriously 500k one way business class awards to Australia?
    Good luck ripping off customers with those
    I’d fly Qantas,Emirates and others happily
    Did I mentioned married segments (roll eyes)

  7. So now we finally see acknowledged how the BOD “lacks airline experience.”

    What’s next? A begrudgingly admission how the marketing/customer relations has been faltering and failing; that the brain dead idea to add seats and cut inflight services has killed AA’s position.

    When does somebody pinch Parker and throw ice water on the BOD to impress upon them that but for federal bailouts to cover their bad bets, where would they be?

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