American Airlines held its earnings call on Thursday. After each quarter’s earnings call, the airline’s senior executives have an employee “state of the airline.” They’ve stopped taking employee questions at this, so it’s all one-way.
The event was held in the midst of American’s operational meltdown during winter storm Fern. The airline cancelled over 9,000 flights. As other airlines recovered, American did not. The storm hit their hubs hard – New York, Charlotte, Washington National, Dallas – Fort Worth. But things went from bad to worse as the airline lost track of crews, and even when they were eligible to fly.
- Flight attendants were sleeping in airports, unable to get through to their limo and hotel desk and unable to get rooms.
- When crew did get hotels, it was often after long waits. But that information didn’t get relayed to operations, so planes and pilots were ready to go with passengers – but there weren’t flight attendants who had yet received the legally required rest to work.
- Often, crewmembers couldn’t get hold of scheduling – waiting on hold up to 12 hours (and learning that the phone system automatically disconnects them after a 12-hour hold).
So it was striking to me when reviewing a recording of the event that in his introduction acknowleding the operational challenges the airline had been through, CEO Robert Isom suggest that flight attendants sleeping in airports is what happens in storms.
- “I know throughout the rest of our system, some of our crewmembers didn’t have a place to stay last night.”
- Isom called it “unacceptable” but then he proceeded to accept it:
I also know it comes with the kind of business we run. This isn’t the only storm that we’ve ever had. It’s not going to be the last storm we’ve had.
Isom blamed his airline’s failure to earn a profit (0.002% margin) on the government shutdown costing them $325 million revenue, on the flight 5342 disaster at the start of the year, and on other airlines flying too much capacity.
Acknowledging that a lack of profits means mediocre profit sharing, he argues that American’s employees are still better off than those at United which has several open contracts and flight attendants who haven’t seen a raise in 5 years (and who have a meager profit sharing formula as a result).
He noted that 73% of unionized employees at American make more than counterparts at United: flight attendants 35%, mechanics 12%, and fleet service 6%. It’s a talking point Isom regularly offers to Wall Street analysts. In the earnings call he said,
Quite frankly, I wouldn’t be out there bragging about profitability in a hub when 80 percent of your team members make a lot less than the market rate.
But it’s a strange point to make. United benefits from lower wages when flight attendants reject a contract its union negotiated that would’ve meant higher wages. And United will be paying more in the short- to medium-term. It also doesn’t make employees happier that an unprofitable American means employees don’t get much profit sharing, while Delta employees are getting the equivalent of 8 weeks of pay. If American was more profitable, employees would be earning more. That’s why the flight attendants union called for Isom’s ouster this past week.
As I approach my 40th year in this industry and have worked under more CEOs than I have fingers and toes, (I am not missing any BTW). I can state without doubt those are the things CEOs say when they don’t have much time left at the airline. Mark my words it might be 6 months or a couple years but he will be gone soon. Don’t ever feel sorry for one they all have been narcissist to some extent over my career. I heard great stories of the early CEOs from the 50s and 60s maybe they were different back then. Now all are products of trained MBA programs. Herb Keller was the last good one we will never see those types again.
How very ivory tower of Isom.. Yes we expect out flight attendants to do everything possible to come to work when everyone else is hunkered down. Yes we expect them to work long grueling hours doing what they can with meager resources to make up for failures in other parts of the business. We value them so much we think” giving them profit sharing is not a good way to compensate them” and letting them sleep on floors is just part of the job.
his points are valid and, no, UA won’t be paying more in the short to medium term. UA has a labor cost advantage and, if AA miscalculated that signing a new FA contract would put pressure on UA to do the same, he was wrong. UA employees are simply too enamored w/ the drivel coming out of their HDQ to realize how badly they are being taken advantage of.
Yes, there will be storms but it is never acceptable for employees to have to sleep on the floor because mgmt didn’t figure out how to prepare for and execute on recovery plans.
CLT got walloped by the NC snow and it is notable that DL cancelled more flights at ATL earlier and ATL got hit far less even though ATL is far better equipped to handle IROPS than CLT. There will be endless stories of crews and passengers that are out of place in the SE for days.
the guy is tone deaf and strategically incapable of delivering a plan that works. There are people at AA that can deliver but they have been buried by a quarter century of incompetents.
Ignore the ‘business-not-charity’ tropes from the shills on here…
I’m convinced re-gressives just want to bring back slavery, or some form of indentured servitude, whereby the under-class must serve these modern-day feudal lords, all enforced with modern police-state technology.
I say, F that noise; workers and consumers deserve far better. We do not have to put up with this BS. Elect new leaders; as for AA, time for new management.
When cancelled flights happen where do you put 3000 people in a city with 1000 rooms. Tell me
Do not fly during a snow storm
I don’t see his stupid ass sleeping on the floor!!! He needs to compensate those flight attendants.
TD, “UA employees are simply too enamored w/ the drivel coming out of their HDQ to realize how badly they are being taken advantage of.”
It’s called leadership and performance. United employees understand that this is, by far, the best management team they have had in 40+ years and that their airline is thriving.
leadership is not telling your employees that they deserve industry leading compensation and then taking 5 years plus to settle an FA contract and years for the mechanics.
Just because UA was mismanaged for 40 plus years doesn’t change that UA employees are subsidizing UA’s market share and competitive market wars by being compensated less than their peers.
Isom is wrong on alot of things but he is absolutely correct in highlighting UA’s labor cost advantage which comes off the backs of 80% of UA’s employees.
“Isom blamed his airline’s failure to earn a profit (0.002% margin) on… other airlines flying too much capacity.” His other points may be valid, but doesn’t this one somewhat reflect AA’s poor planning and inability to add more capacity?
You criticized UA flight attendants for be unwilling to allow preferential (computer) bidding systems (PBS)? As Gary said it takes two to tango.
The UA flight attendants tremendous performance (see NPS) says all you need to know about how they feel about UA leadership and the performance of the airline.
This reminds me of a person who gets something stolen from their car – the thief (Isom) is absolutely to blame, but the victims (AA F/As) still bear some responsiblity because they left the car unlocked.
Isom is right that disruptive storms will occur again – but the union is negligent by relying 100% on their company management to have the resources to respond. They should have prioritized protections in their contract to take care of their members when the company drops the ball.
Many other unionized employees (at other airlines) have provisions in their contract that essentially say – “When you are supposed to have a hotel room after your duty day, but the company hasn’t given you one within (xxx) minutes, you can get your own and the company will reimburse you.” Believe me, it only takes a few times of crews expensing what are effectively more costly rooms anywhere for the company to respond by increasing staffing at the crew desk to take calls and book rooms at contracted hotels instead. Same with the transportation to get to the hotel – other contracts also have, “If it doesnt leave within (xxx) minutes after your last flight blocks in, you can get a taxi/Uber and expense it.”
No more 12-hr waits on hold, no more sleeping in airports, and in the end you actually do the “book it yourself / pay it yourself / submit expense” option on only rare occasions.
The union knows just as well as anyone that these things (major disruptions) can happen. Their negotiators left their members vulnerable to these types of problems, and I’ll bet my next rent check it will happen again.
Resign simple , You do not have what it takes to run a once proud global carrier. Get out.!
Numbers do kit lie DL $5 billion , UA $ 4 billion in earnings AA $ 111 million ?? When revenues were $14 billion ?? Duh ??!
Cry me a river!!
I was ground personnel at JFK.
Historic blizzard in February 1978. Nearly 18 inches of snow. The entire city was paralyzed.
I slept in my office for 3 nights!!
Agents along with passengers slept anywhere in the terminal that they could find a open space
That was 47 years ago.
These things happen, ladies an s gents.
Get over it
Workers should be paid more. Minimum wage should be $1M. Then we’ll all be rich. That’s just economics.
Capitalism is bad. I don’t know why but it just is. So is enforcing laws. Unless it’s against political opponents. But only against republicans, because they’re Nazis. National Socialist workers party was there name, that sounds super right wing to me. Because I’m a retard.
Isom and his management totally failed! If you want your employees to work hard for you, you take care of them. I don’t understand how with everything computerized that you lost crews, had FA’s sleeping in airports etc. this should never happen! You needed middle management to help and step up to the plate. Take care of those that you are busting their balls for you during this weather catastrophe. Plus, you don’t come out and say the things you said, without thinking and apologizing to the cruise that were stuck, sleeping in the airport and sleeping on floors and getting kicked out of a hotel rooms.! you make it up to them you tell him how valuable they are and you’re sorry for your screw ups. I’m sorry you need to go a good CEO wouldn’t blame the flight attendants!
1. AA experienced a weather event that took out five of hubs including its #1 and #2 hubs.
2. Over 60% of the US population was impacted by this storm.
I’d question if this was a system failure or an event the system was never designed to support, a “black swan” event. Every airline has them, every airline gets skewered in the media and by the unions, and every airline recovers and moves on.
It was a very bad situation, but Isom was not wrong. This does happen and you gotta just roll with it. What matters is how we respond in the moment and after the fact. 20 years ago you could say “this is part of the job” and people would consider that. Now…forget it.
While he is right in principle that’s not what folks are saying expect to hear from a leader these days.
CEO Robert Isom $13.2 million salary in 2025 . American Airlines flight attendants earn an average annual salary of approximately $47,079 to $63,000. How often has Mr Isom slept on an airport floor last year?
He is correct, there is a limit to what can be done during events like this and the FAs should realize at least they are getting paid to sleep at the airport unlike the passengers that actually paid money for the same indignity.
After spending yesterday enduring Dumpster Fire Air it just amazes me how inefficient this airline is. Employees when traveling should be expect accommodations.
American management knows it has super hubs that can be impacted by storms, weather winter or summer. There should be contingency planning to account for those events, not just winging it from minute to minute. But coming from an airline that doesn’t want to spend any money unless compelled by the competition to do so.
And yes after nearly 45 years in the business world I’ve come to learn that most CEOs did not get there based upon talent.
@1990bot, I am interested to see if the humor will continue or if it is a one off type of thing.
So despite the title headlining that employees were sleeping on the floor, not a single sentence in the article indicates any such action. That’s because it didn’t happen. There might have been employees sleeping at the airport but we don’t who or what their capacity is. Furthermore it’s the usual big bad corporation who is at fault for a major winter storm in the southern states of the US that is an anomaly. How dare they let this happen despite the fact they cancelled flights three days out. These employees that stayed at the airport did so because they close to stick it out there than try to drive home and back again. Those employees should absolutely be rewarded for their dedication.
“I’ve actually been stuck in airports for continuous delays all night long with no sleep during regular operations… not fun but it’s not unusual… for any airline… we all deal with the same issues… All airlines
I don’t know what his [JonNYC’s] post is but I’m just saying the whole system is messed up and there are a lot of consequences… for airlines and everything else… but the crew stuck in the Caribbean has a different perspective than the crew that can’t get a hotel… but some people are stuck at home with no power”
A sobering perspective shared with me from a flight attendant I know & trust.
rebel,
nobody has denied that UA FAs are doing a good job. But if compensation increases are more important, then UA FAs will either escalate their dissatisfaction or begin to take it out on customers – which frequently happens with labor -mgmt standoffs.
None of which changes that UA is living with a labor cost disadvantage that explains a lot of why AA doesn’t make as much and doesn’t have the resources to fix what has been broken for years.
Parker,
Yes, it could easily be true that this was an event that could not have been prevented or restored under any normalcy.
There are still many homes in MS and TN that don’t have electricity and the expectations by the electric companies is that it might still be another week.
but even if all of that is true, leaders don’t tell employees or that the public that it is impossible to prevent every meltdown (even though you can’t) and that you have to accept failed systems.
Leaders fix what doesn’t work even in lesser IROPS and then say that you will continue to try to improve once it has been proven that you can deal w/ more “normal” meltdowns.
It’s not about reality – it’s about messaging and perspective.
That’s the whole point. That’s not happening. The UA FAs are doing a great job much to your obvious chagrin. Bravo to the UA FAs and best of luck getting the industry-leading contract you all deserve.
United CEO has earned way more than he deserves. We have been waiting for a new contract for over 5 years. So yes, we have not had a raise in 10 years, which is when our current contract was ratified. The “industry leading” contract was a farce and was voted down. Not because we are greedy, it was not financially viable as it did not give enough of a raise to even keep up with inflation of today, or to keep up with ongoing inflation. The work rules were terribly flawed with many of them taking a step back instead of a step forward. So, when posting about why we voted down a raise, get your facts straight.
This is why the AA soft product sucks! This idiot needs to go. He is unaware he is in a service industry.
As the leader of his very large company, Isom continues to demonstrate how clueless he is. The flight attendants are the face of his company. He should want them happy. He’s right, bad things can happen. But you don’t blow them off so cavalierly and essentially tell the FAs to suck it up. A little compassion would have gone a long way. But like the rest of his America West leadership team, he’s just not very good at his job.
I sat at PHL for 14 hours while my flight kept getting delayed due to being one flight attendant short. A 10:30AM flight was finally canceled at 12:30AM the following day. AA told the manager on duty that the 30 or so remaining of us weren’t eligible for hotel room reimbursement because the weather caused them to not be able to find personnel.
I rebooked for the following morning on United and got to my destination. This is third time in the past year AA has royally screwed up my travel. Not flying them anymore unless I absolutely have to. I don’t get points for my flights anymore either so zero incentive to use them.
@Tim Dunn you are absolutely right…the expectation is to manage perspective and messaging, not reality. And THAT is the problem.
Our last generation of leadership has been one where we have done nothing but manage messaging and perspectives, telling employees, consumers, voters what they want to hear, not what they need to hear.
The result…
Consumer speciations have become unreasonable. Employees cannot handle any negative feedback with claiming bullying or psychological unsafety. Everyone seems to think there should be no struggle, everything should always be perfect.
And we wonder why professional civility is gone. We’ve lowered our expectations for ourselves while increasing our expectations of everyone around us.
Look, you can blow smoke up peoples’ asses to calm them down. Or, you can tell them the truth, place it into context, and focus on what we do next as a team to prevent this from happening again…to rally the troops around a better tomorrow.
The first leader is a good, maybe even great leader focused on things like consensus and harmony. The second leader, with the right level of emotional intelligence, is destined to be an elite leader who focuses on outcomes and accountability. It not an either-or, but the last 20 years have taught me which is more prevalent in elite companies.
The funny part about this is AA management have been pushing the w0ke trash inside the company quite a lot. Most of the leadership is very left. They are very rot just like their allies outside.
Today I officially retire. I started working in 1977 under uncle Samsung tax paying system… the poster on the wall read 65, the retirement age. My, now ex husband AA pilots was 64. Also retired. I pray for airline safety as I love flying. My first trip was to my mothers homeland on Eastern. I loved flying then. A bit of advise… if you divorce after 22 years and 4 children, try not to be a abusive spouse. He got everything I loved. I raised my family with much love. Stay true.
@1990bot Well played, sir. No one deserves the sting of your razor sharp prose more than the insufferable 1990. His tired, windbag buffoonery would make him right at home in North Korea with his fellow comrades.
Parker
Are you an AA employee?
“Our last generation of leadership…”
AA’s sad attempts at leadership are unacceptable but somehow the Board continues to accept failure.
Four decades into my ‘career’ in commerical aviation and I wonder, when will airlines get ahead of the game and have onsite capsule hotels that are dedicated to staff.
Did American pilots sleep at the airport too? Or they were assigned rooms before flight attendants?
We fly AA bc of our points system. The gate attendants and flight attendants are not professional in their duties. Stand around at gate, gossip amongst themselves about coworkers or passengers, complain about their work/ passengers, eye rolling and generally unhelpful attitude. Expect passengers to hurry up when they expect you to wait on their time. If I’m stuck sleeping on floor of airport, good enough for them, too.
What happened with American over this last storm was nothing short of a catastrophe, and will be studied for years as a case study in mismanagement. This has exposed massive system shortcomings and Isom should be held accountable. Customers are unhappy, employees are unhappy and shareholders are also most likely unhappy. Not a formula for success.
Isom’s legacy will be running AA into the ground as he lined his pockets. The only time he has come across as a leader was his response to the crash and loss of lives a year ago, but I’d be willing to bet he was reading a provided statement from a teleprompter. One can only hope he’ll be out soon. There will be a special place full of fire and brimstone reserved for Isom for the way he’s treated employees.
I flew during this mess. I was lucky and somehow made it to my destination. I gave out Starbucks gift cards and the outstanding service vouchers AA sends you when you hit PP/EP.
Incompetent POS you need to resign for that great comment of yours Robert Incompetent Isom you are the. Worst CEO we ever had worst than Thomas go F yourself
@1990bot — *beep boop*
CEOs being disgusting pieces of shit like usually, how surprising….
As soon as those words came out of his mouth, the board should have started the removal process. It’s time for all labor groups to consider organized labor shortages. As long as Isom is in power AA will be nothing more that a regional airline with a international recognized name that treats their employees like doo-doo.
Stop using fake storm names in your articles. There are no official names from the National Weather Service for winter storms. These stupid, made up names are from The Weather Channel and using those names continues to enable TWC to unethically profit, excessively, from natural, normal, NOT unprecedented winter storms.
If Im an investor, I’m not happy. I’m an investor. Poor results time and time again.
Sure, you can blame them on higher costs verses the competition. But you forgot to mention the lower revenue because of an inferior service product. And that was intentional with the Oasis conversion. When people have a choice, and the better choice is the same or slightly higher cost, they will go with the competition every time. And most of the time it is a higher cost, so the other guy is getting more v revenue per seat, more revenue per flight. That results in higher overall revenues and higher profits.
Isom is part of the management that made this choice and bet. More seats, more revenue, they lost. Now they are playing catch up.. That’s going to take a while. Everyday they get further behind even as they try to play catch up.
And when profits are low, you are only one recession away from bankruptcy if you don’t have cash and lines of credit to use.
The board would be wise to ask some hard questions.
As for FA’s sleeping on the airport floor or wherever? That is a lack of strategic planning. Relying on a central operations center works in routine situations, but in a massive disruption like this, you have to push for local management to assist. Call the hotels and book lots of rooms, then convey that to local management who will assign the rooms on an as needed basis.
As a passenger though? I’m rebooking and not going.
Does AA not have an IT department? Why the hell are people making phone calls and waiting on hold? Just get an app!
As to sleeping in the floors, employees should be able to get a hotel room on their own and get reimbursed. Or keep cots on hand and open up the airport lounges overnight for them. How dumb is this CEO?
In 26 yrs flying we of course have had all kinds of storms not once not once have I. Ever seen an operation melt down like this one did! Not once have I seen crews treated like this phone calls ignored like this management as bad as this!!! It’s like, I was in the middle of this by the way, it’s as the entire operation went home for the day and management said go home we’ll start fresh tomorrow and ignored everything and everyone!!! I’m not sorry to say this management team from top down absolutely sucks!! Enough with this usair shit AA fire all that belonged there and rehire original AA staff or yet again usair will see another bankruptcy!!!
For those comments about contracts, most states have laws around performance during Acts of God.
There law recognizes, there is only so much that can be done.
Yes it sucks. However it isn’t an unrealistic thing to happen. I’ve been stuck at work before during bad weather. I could’ve decided not to go in and not risk the chance. I did, and it didn’t work out.
Now if contract guaranteed a room even during act of God, then employee should be reimbursed. However I highly doubt any lawyer would allow a contract like that. Article doesn’t say, but are they reimbursed?
Your headline and what he actually said were two competely different statements. The first was obnoxious. The second was reasonable.
Sure, okay. Lesson learned. Next storm just call in sick to avoid the mess and have no FAs to work. Solved. “It comes with the business”
While while you’re looking at things why not look at the rooms that the crews are supposed to be able to relax and go in in between flights most of them are a real wreck and needed to be redone a long time ago. Crew rest areas are exactly that they’re crew rest areas but if the crew can’t rest in them what good are they?