Doug Parker: American Board’s Lack Of Airline Experience ‘Has Impact On Deliberations, Ability To Understand’

Earlier this month American Airlines brought the former Northwest Airlines CEO, who led that airline through bankruptcy, onto its board. He had a poisonous relationship with labor, so naturally some work groups at American are concerned what the move signals for them.

The subject of Steenland’s addition to the American Airlines board came up at the end of the carrier’s ‘State of the Airline’ question and answer session with employees following their third quarter earnings call, and Parker explained that Steenland was added for his airline experience – something the board previously lacked – and not for a 15-month mechanics strike where he called management and replacement workers “the dream team” of maintenance groups.

Parker offered,

Doug was CEO of Northwest when they went through some difficult bankruptcy times….maybe people because of that say ‘he had to go through tough times at Northwest with labor’ I know. That’s not why he’s joining the board. That was a long time ago.

Doug, what he brings, is great expertise frankly for our board. It helps me and the team as well. But our board – which is a fantastic board – doesn’t have anyone on the board with airline expertise, that has worked for an airline before. That has an impact on their deliberations and their ability to understand. Like I say they’re a fantastic board. But so we’ve been looking for a little while for someone that could address that need.

And Doug Steenland, in addition to doing that since he’s left Northwest, is a world class board member. And has been asked in many cases to become board members of situations like the Chrysler situation, of AIG, he’s on the board now of Hilton. He’s a lawyer by trade which tend to be good board members as well cause it’s largely a legal process, with really good airline expertise it helps our board.

…If we were gonna have issues with our labor it would be the management team, it’s not a board issue.

Parker noted as well that airline President Robert Isom “worked with Doug for a long time at Northwest.”

Now, two important questions to always ask to understand a situation or a decision,

  • What’s different?
  • Why now?

Parker identifies ‘what’s different’ in adding Steenland is that he has airline experience. It’s striking for Parker to suggest that the Board’s “ability to understand” has been “impact[ed]” by lack of relevant experience. But it seems to be an important question then, why now? Why does the board need experience running an airline now that it didn’t have before?

There seem to me to be three plausible scenarios.

  1. Opportunistic it just so happens that the discussions came up with Steenland, and he decided he’s available, so everyone jumped at the opportunity. If anyone had thought of it before, made the connections before (but Isom already had a relationship!), they’d have done it. It’s just fortuitous.

  2. It’s not really ‘now’. This was something in the works for awhile, perhaps before the pandemic, and it was simply delayed by the current Covid crisis. There seemed to be a critical mass of discontent with American’s management last fall after they lost their planned joint venture with LATAM to Delta.

  3. The board wants someone now who could step in and run the airline on an interim basis. When Jeff Smisek was removed by United it happened in a hurry because of a federal corruption investigation, and Oscar Munoz had no airline experience. Many have wondered in the past why the board would have put up with a management that had alienated shareholders, employees, and customers. My sense is that the pandemic gave Parker a pass, but perhaps not everyone is happy.

Sometimes a cigar is just a cigar, Parker answers ‘why Steenland’ but he doesn’t answer ‘why now’. Nonetheless it’s striking to hear the CEO of American Airlines say that American’s board has been impaired in its ability to understand issues facing the business prior to adding Steenland to its ranks.

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 InsideFlyer.com, 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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Comments

  1. Parker’s continuing presence at American is a strong indication that the board’s lack of experience and general ineptitude are alive and well. I’m just not sure that bringing in someone who – while likely more competent – is incredibly divisive is a prudent way to go.

  2. Parkers explanation of why Steenland was brought on to the board is absolute nonsense. He is there to bring concessions to all the employees and take the company into bankruptcy. The board has spent billions on a new hq building that wasn’t needed and on stock buybacks that sucked cash out of the bank. I guess Carl Ichan wasn’t available.

  3. I don’t have a lot of sympathy for a majority of AA employees, who were toxic to myself and other travelers on my flights and ground experiences. I have just as little love for the allegedly incompetent, penny-pinching, sadistic AA Executive Management cancer (Scott Kirby is included too).

    If this new Board Member is hostile to labor and Executive groups alike, then perhaps this is what AA needs to fix its problems.

    My concern would be this incompetent Board of Directors, who allowed Parker’s team to destroy a decent flight experience over the past number of years. They should replace all of the Board members while they’re at it. Where are the estranged AA shareholders to force a change? (I know… majority are corporate entities or funds-based)

  4. Doug Parker has airline experience, but fails to understand he’ll run it into the ground. Drunk captain at the helm!

  5. Wait a minute! Mr. Doug Parker was my boss at America West Airlines when I started in 1997. AWA bought USAirways. We combined and merged with AA. Mr. Parker runs AA.
    He was liked at AWA and was very personal on my aircraft
    flying in the back with his family.
    Mr. Parker was CEO of AWA.

  6. Christopher Robert Axtman sums it up succinctly. Dougie S. led NW into BK court with his brilliant (not imo) management skills and alienated the NW employees along with the customers (myself included). He was clearly brought onto the AA board for his BK expertise and experiences using BK to cut labor costs. I can’t find anything where Steenland has “grown a business”. He is (or has been) on the boards of Chrysler, AIG, and Hilton. How are those companies doing (or did) during Steenland’s terms on those boards?

  7. HE WAS ONLY PUTTING HIM ON THE BOARD FOR FUTURE BANKRUPTCY. THEY WANT TO STRIP CONTRACTS, WHILE THEY TAKE THEIR BILLIONS!

  8. I’m a former investigative journalist and American refused to let me board the because I wouldn’t delete photos of some of their employees without masks covering their faces and working with the public. My flight took off with my bags — and I stood there with a gate manager who threatened me with a lawsuit —I’m pretty sure she’s got that backwards and that a there’s a good case for “false imprisonment”. I’m happy to find out and waiting for word on how they are going to train their people so it never happens again. In the meantime.. I have the photos and my boarding pass along with lots of free miles I doubt I’ll be using. Very grateful for all of the training I’ve had in remaining calm and protecting video and photos.

  9. I’m a former investigative journalist and American refused to let me board the because I wouldn’t delete photos of some of their employees without masks covering their faces and working with the public. My flight took off with my bags — and I stood there with a gate manager who threatened me with a lawsuit —I’m pretty sure she’s got that backwards and that a there’s a good case for “false imprisonment”. I’m happy to find out and waiting for word on how they are going to train their people so it never happens again. In the meantime.. I have the photos and my boarding pass along with lots of free miles I doubt I’ll be using. Very grateful for all of the training I’ve had in remaining calm and protecting video and photos.

  10. Flying people is a tough business. RIP old AA. Hello new AA. Terrible board despite how highly the think of themselves. The bonds from the dead AA will magically convert into $1 shares of the shiny new AA 2023 and all these incompetents on the AA board and their bankers will get richer and the government will probably fund that too! Passengers are just filler, the real money is in bailouts and cargo.

  11. @John Luffred – you make total sense. Why not yell some more?

    And what is your opinion on AA’s Board?

  12. A weak and ineffective Board dates way back to when those in that spineless group wilted to labor and brought the stewardship of Bob Crandall to an end. It seems each succeeding Board falls over itself matching the ineptness of the previous one. Parker insults them and they sit on their hands and do nothing with him.

  13. Parker is a sociopath. A lot of Ceo’s are. His answering of questions of anything in the future is literally jibberish. He might have others fooled…not me.
    He needs to resize his commitment to employees. We trusted him for a while. I did. Progress was made, now its all gone. Back where we started.

  14. So, how many have been furloughed? And Delta just announced they’ve protected pilots from furlough until
    2022? Hmm. Mr. Parker, you have some splainin’ to do. BOTH my son and DIL are furloughed from AA because of crappy piss-poor management. They starve while Delta pilots thrive. Pathetic.

  15. You refer to a Greenland in the lead of this story. Does he have a first name? Or we all supposed to know?

  16. “3. The board wants someone now who could step in and run the airline on an interim basis.”

    I believe this is the “bingo” (I know I’ve posted such elsewhere). As to why new leadership (read CEO) is not in the offing prior to a bankruptcy? Those individuals with the bonafides to helm an airline all remember well Howard Putnam and Braniff, and (to a lesser degree) Tom Plaskett and Pan Am.

    Fail a turnaround and be good as gone from the airline industry.

  17. If my family’s experience with employee’s total lack of customer service at Norfolk Saturday is any indication of the status of their feeling, the company is in big trouble.

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