The latest episode of the Airlines Confidential podcast has former American Airlines CEO Doug Parker as co-host, with former American boss Bob Crandall as guest.

Starting this off, Parker tells the story about asking Crandall’s permission to name their new corporate campus after him.

Crandall appeared on Airlines Confidential in 2021, and there’s no one who better understood that airlines are low margin business and costs creep so he dug into the specifics with managers in budget meetings, pressing them even on small line items, to make them pay attention to minutiae that add up.

He certainly spent a lot of money at American Airlines, but it was important not to waste money. Investment all had to go to the most productive places. That’s the underlying message of the famous story about saving $40,000 by cutting a single olive out of salads in first class. Too many of those and you can make a mistake – each olive decision individually may not look like a big deal, but collectively degrades the product. Still, each olive decision needs to contribute to value add of the product. There can be no lazy decision-making.

American’s corporate Skyview campus is also known as the ‘Doug Mahal’, and the cost overruns on its construction alone would have been enough to pay for seat back entertainment screens on its domestic narrowbody fleet. American started ripping those out with its new domestic interior that launched in 2017 – ‘everybody can just bring their phone for entertainment’ – while Delta, United and JetBlue have gone all-in on screens that passengers love.

Parker spoke with his wife about how to have the discussion. They were going to be at an event together, and would sit down beforehand. This was before the cost overruns, but it was still an extravagant design.

I said, I’m going to tell them, I’m going to tell them, hey, Bob, we want to name the headquarters after you and here’s what it’s going to look like.

She’s like, that’s not the right way to do it. You need to show him how nice it is. And at the end of that, say, and we want to name it after you. And I’m like, well, of course, that’s the right answer.

But you don’t understand. If he doesn’t know what I’m telling this more, he’s going to start grilling me about this project. And I can’t take it…Okay, all right, you’re right. So I do that.

…I open this thing and it’s, I honestly, it’s just, they’re just renderings. And I get to the, I just open the first page and it’s a picture of what is now the headquarters. And he looks at it. That’s a lot of glass. …I just say, okay, Bob, thanks.

And the rest of the time, there just, like, just show people kind of walking around in an open space just because I can show that it’s an open office environment. …I don’t think he even likes the open environment…And then I’m getting to where I can just get to the punch line and he stumps me. How many square feet is it?

And I have no idea. I don’t have a, I don’t even have a guess of it…the worst thing you possibly do is tell Bob, you don’t know. And it’s as simple as that, you should know about a project and the square feet is. …I’m looking in the eyes and I just, I don’t know. And he looks at me like, it’s a combination of disappointment and anger. And I think, you know, he wanted to like, just grab me by the collar…

Anyway, I flipped in the next page and I’m like, okay, Bob, look, here’s the thing. We want to name this after you. And he was very honored. It ended up all great.

We get ready to leave. And it turns out this, again, this document, well, nothing spectacular. What hasn’t, it was only produced for me to show Bob. …So Steve Johnson, who had given it to me said, make sure you destroy this because, you know, no one, ..showing this level of these kind of pictures, even to our board. So I say, I say to Bob, worrying that I won’t remember to destroy it.

I say to Bob, hey, you know, you keep this, but please get rid of it because the board hasn’t even seen …And he looks at me, well, when you do tell your board, you might learn how many square feet.

This is great. There are just so many rich stories in aviation that you never hear (like when Doug Parker traveled to New York after US Airways 1549 he left his briefcase in the parking garage – and they had to evacuate US Airways headquarters in Tempe thinking it was a bomb).

Opening the interview, Crandall shared how he got into the airline business (at TWA in 1966). His wife thought that if someone was going to pay him more money, and it was going to mean she could jet off to Rome, that was a good thing. Crandall eventually became President of American in 1980 and CEO from 1985 – 1998.

Here are the 3 things I found most interesting from the interview,

• Bob Crandall thinks privatizing air traffic control is the most important way to improve aviation. Crandall is a very outspoken Democrat. So is Parker, and Parker agrees with him.

  We’re back in the 80s and the 90s. We made a lot of efforts to get bill, I bill through Congress that would transform the air traffic control system into a system that pays for itself and operates on the same standards that a normal business uses. And our friends up in Canada have done an excellent job of creating a system of that type, which according to everything that I can read and learn from people who have experienced both systems, the Canadian system is much more …I think we know what we need to do. The problem is that we seem unable to overcome the inherent difficulties in the political system that we’ve chosen.

  The Congress is a simply disgraceful organization. We elect people to go and represent not the people that they directly benefit. We go, we ask them to go to Washington and use their best judgment and common sense to do the things that benefit the country. And for more than 30 years, they have resisted creating an air traffic control system that they know perfectly well needs to be redone. But they refuse to do it because there are control towers out there in virtually every district and they’ve just horrified at the notion that one of their constituents might have to move or lose their job.

  And the second thing that they simply cannot resist the private pilots in this country who enjoy enormous political pressure because there are so many of them. And I’m ashamed of those private pilots.
  They know perfectly well that they don’t pay their fair share of the cost. And I’m ashamed of the companies that run private airplanes because they too have joined individual private pilots in resisting the creation of the system that they know perfectly well needs to pay for itself by allocating the resources that we have available among the users that demand service.

  So our political system, I’m sorry to say, has failed in these negotiations and these discussions. So what needs to be done is we need to create a private enterprise or something approach of organized and operated like a private enterprise, but run with shared governance, including the government and commercial airlines and private aviation. But we need a better system and we need it very quickly. And of course, if we want safety, we need to do a hell of a lot better job of running whatever system we’ve got.

  

  Parker adds that when the Trump administration got behind air traffic control reform along the lines of NavCanada, “we got as close as I guess anybody has, we actually, we put it to where the AOPA, the private pilots, you know, wouldn’t have to pay anything more.”

  There’s so much value creation. It’s like, okay, we give. You don’t need to, you know, we will structure this in a way that your costs do not go up. Just let us get it done.

  …The organization itself of AOPA lives off those dues and they live off of scaring their members into thinking that if you, you know, that we’re here to fight for you, and if not, you know, these bad airlines are going to take away your ability to fly around the country, which is not the case.

  

  Crandall offers that the biggest threat to the aviation industry is that if you don’t fix air traffic control, the public loses confidence in the safety of the system.

  

• Airline executives need to get into the weeds and get the details right. He frames this carefully, saying it’s a complicated business and that a lot of complaints may be unfair when made by people that don’t understand everything that goes into it.

  But the industry needs to pay attention to managing its airplanes and its crews. …I don’t believe, for example, that any carefully managed industry ought to have an airport, which is dependent on a single generator.”

  You know, you just, you don’t do that kind of thing. And I think any given company, if it was the safe guard its place in the industry, ought to manage itself very carefully, to listen carefully both to its customers and to its frontline employees about, you know, what’s good and what’s bad.

  I think one of the things that I tried to practice, I think, and I was, a lot of people may find me for getting away down in the details, but I think it’s very important for the people that run airlines to always know what their frontline people are thinking, to listen carefully to them and consider their suggestions very carefully. Well, big, big network business, those small details add up to it.

  Parker opened telling the story where he didn’t know the details of his new corporate campus. Crandall was known for diving into station budgets at the level of detail of the cost of security staff versus guard dogs.

  When American Airlines introduced its new domestic cabin – the product that would be experienced by most of its customers – Doug Parker as CEO had not tried it. In fact, it was in the marketplace for more than six months before he flew the product himself.

  

  Years ago Singapore Airlines had a model Airbus A380 made, with seats built out of manila envelopes and it was so detailed that the seats inside actually reclined. The tagline was “It’s the small details that make giants in the sky.”

• Southwest’s Herb Kelleher was the toughest competitor he ever faced.

  Well, because you see, herb ran a very different kind of company, but he ran it very well. And relative to us, you know, particularly for the traffic we competed for with Southwest, they were closer to the homes and the offices of a lot of people at Dallas. And Southwest did its thing, which was lots of frequent flights. They did that and they had low prices and they ran on time and they were on the airplanes they were good natured and pleasant.

  So in terms of trying to deal with something offered by another airline, to find a way to compete effectively against that other airlines advantages, Southwest was the toughest nut we had to crack.

  …in most of the other markets where we competed with other people, we had managed to create advantage for ourselves. But in those local markets where we competed with Southwest, Southwest had created advantages for itself, which were tough for us to deal with.

  Here is Bob Crandall offering a tribute to Herb Kelleher in song, after the Southwest Airlines co-founder retired and was being honored by the Wings Club for distinguished achievement.

  The lyrics to Frank Sinatra’s My Way seemed appropriate to the occasion – even more so sung by Crandall, stylized to honor Herb (“Regrets you’ve had a few, how ’bout Shamu that crazy airplane? You paint a whale from head to tail, how could they fail to call you insane?”).

In some ways Crandall’s legend outstrips the reality. He’s likely more popular now than he was when he ran American. But he does offer a lot of wisdom and perspective, and it’s always worth listening when he wants to share stories from his experience.