Doug Parker is the retired Chairman and Chief Executive Officer of American Airlines, and the man most responsible for consolidation in the U.S. airline industry. He succeeded in his single-minded quest to lead the world’s largest airline, and he has government cronyism and taxpayers to thank.
Now he’s a board member at Qantas, and has a charitable foundation that supports minorities in aviation careers – especially pilots – though he shouts American Airlines interests from the rooftops even when they’re contrary to developing minority talent in aviation (by blocking non-traditional paths to becoming a pilot when it favors American Airlines competitive interests).
He owned over 2 million shares of American Airlines stock when he stepped down. At Investor Day in 2017 his company stock was worth about $100 million. Today those same shares are worth around $20 million. Lucky for him, he sold millions of shares before the crash – with today’s share price hovering around the lowest level since bottoming during the pandemic, when credit default swaps suggested high likelihood of bankruptcy for the airline.
Parker is taking victory laps with flight attendant union head Sara Nelson over their ability to work together to secure three rounds of massive subsidies during the pandemic. Here he is on Instagram:
Last week, @flyingwithsara and I were asked to speak at the #jffhorizons summit in Washington D.C. It’s always a pleasure to share a stage with Sara and the topic they asked us to discuss — how we worked together to pull the US airline industry through the COVID crisis — is one we’ve covered many times. So it was easy duty.
Interestingly, we found the story tells better with age. That’s because today’s audience is less interested in the blow-by-blow inside stories about the players of the time. Which allows for the broader message of the story — the lesson — to get more attention and discussion.
The story is that Sara Nelson, a labor leader, had the courage to reach out to industry executives with a plan that was good for the corporations but also good for her constituents. And we executives were willing to listen and to work together with labor. And all of us were willing to trust each other. The result was an incredible piece of bipartisan legislation that saved hundreds of thousands of jobs and kept the US commercial airline industry operating through a national crisis.
The lesson is we actually can get important, creative, bipartisan legislation passed in today’s polarized America. It won’t happen by continuously asking our legislators to reach across the aisle — that is extraordinarily difficult for them to do on their own. But it can happen if concerned citizens on each side of an issue are willing to work together to develop constructive compromises.
It just takes leadership. Not by congressional leaders, but by all of us — people like Sara Nelson that are willing to work with the other side for the sake of a better future for all. I know it sounds crazy, but it works. I’ve seen it. And I’ve got the story to prove it:).
For Parker and American, this was the heist of a lifetime. He spent all his time in D.C. lobbying and Nelson played a key role. Without Nelson’s cover with the narrative about workers, and bringing along Democratic leadership, it would never have worked. Together, they robbed the American people of $54 billion in direct cash, $25 billion in subsidized loans, plus money for airline contractors and tax subsidies as well.
- To see this, just look at the second and third round of subsidies (“PSP 2” and “PSP 3”) which happened when we knew the worst of what was happening in the industry, and they were already bringing back workers. The total number of furloughs happened and was known. And the combined $29 billion at most involved 15% going to cover the costs of those employees, and 85% going straight to the airlines. At American that meant taxpayers taking a haircut instead of shareholders.
- The money was supposed to go to keep workers attached to airlines so airlines were ready to fly when customers returned. That did not happen.
- American shed 30% of non-union staff, threatening them with the end of the first round of subsidies (that they’d get a better deal on health care and travel if they left ‘voluntarily’ rather than sticking around). Parker furloughed more workers than any airline CEO in history.
When future funds were authorized American told non-union workers that if they had found new work elsewhere they could not come back and get paid. The airline kept employees separated rather than connected, and kept more of the cash.
- And Parker’s American didn’t keep pilots current, so lacked the pilots to fly when rebuilding schedules to sell to passengers. That led to operational meltdowns.
American took about $10 billion in direct subsidies plus subsidized loans. It was the scam of the century, and now he’s taking victory laps. That’s shameful. But very on-brand.
What turned Parker from an obscure and likely short-lived leader at America West, whom we might never have heard from again, into the man probably most responsible for the race to the bottom in U.S. commercial aviation was his persistence in obtaining government subsidies after 9/11.
Doug Parker Testifying For Airline Subsidies, 2001
In his telling, he was relentless in securing government cash even in the face of formal rejection. That positioned him to ultimately take over twice-bankrupt US Airways which had sloughed off pension obligations on the federal government, and ultimately with the help of labor unions (whom he somehow convinced would be better off under his leadership, which turned out wrong) and the Pension Benefit Guaranty Corporation he took over American Airlines. And that’s how the big heist was set up.
Considering those $10 billion in direct cash from taxpayers during the pandemic, it’s striking that the company’s entire market cap is now about $7 billion. Parker avoided bankruptcy by pretending this was all about workers – the same story he told himself about why sought to merge with airline after airline (he says that was never about his own ego, even though a deal with United fell apart when it became clear he wouldn’t lead the combined entity).
It’s a key part of his legacy so he’s desperate to spin the story – as much as self-deprecating Halloween skits that are now getting United’s Scott Kirby in trouble.
Never forget that the acolyte of Bill Franke (who turned Spirit Airlines into an ultra low-cost carrier, controls Frontier today, and gave us Wizz Air and Volaris) made U.S. aviation the consolidated lowest common denominator business that we now experience.
He’s the godfather of consolidation – fewer airlines, fewer choices – while cramming more people onto planes with less room. He led the race to the bottom – and when you stopped buying his tickets after 9/11 and the global pandemic, he made you pay for it anyway. Yet his strategic blunders, such as falling behind Delta and United in passenger experience and relinquishing slots and gates in New York to Delta, leave American Airlines struggling the way it is today.
Chug-A-Lug Doug always spoke from his liver’s and personal bank account’s perspective. Especially in the face of adversity.
Considering he’s out parading around with the Queen Trolly Dolly, Sara Nelson, one shouldn’t be surprised to see the AFA somehow find a way to takeover the APFA at some point.
Kamala Harris must become President because she wants to punish them rich people. She wants to tax UNREALIZED capital gains. That would mean that Parker would have been taxed for his $100M holdings. So what if he had kept it and it dropped to $20M because the government would not give you a tax credit for unrealized capital losses.
Harris will punish those rich people, including those snobbish frequent flyer super elites, so that we, the lower level frequent flyer elites and non-elites will have a fair chance.
Never Forget–
The party that enabled Parker, that rubber-stamped the mergers that make US air travel so miserable today, that let the banksters walk free? They are completely under the ownership of Big Banks, Big Health Insurance and Big Air Travel. We handed United, American and Delta billions, only to see the goat rodeo we had last week.
And, these political hired guns are hard at work today– harrassing JSX, preventing the survival of a Hawaii-route alternatives to The Big Four, even as they undercut reliable entrants like Breeze and Avelo.
The mergers that were Green Lighted under No Drama Obama will haunt air travel for decades to come, even as we continue to subsidize these Eh-Holes.
@derek
That’s’ so utterly absurd. You know EXACTLY how her party aligns with Big Business given they never closed the Carried Interest Tax Loophole. Her party rubber-stamped the Big Airline mergers, even as they let the Banksters walk free. Much like our Prez? The Senior Senator of The Great State of MBNA? She’s completely owned by Wells Fargo, Wall Street and Big Business.
The Wealth Tax sounds good to the uninitiated. Until you realize we ALREADY have property taxes, excise taxes and local asset taxes.
Unless we switch parties this time? We’re about to see the largest tax increase, and wealth destruction, ever inflicted on the country. That IS her policy.
This is why anytime someone says US airlines suck only because the ME3 are subsidized I laugh.
They call him Discount Dougie for a reason…and not a good one.
@derek
Please, spare us the MAGA talking points and hysterics. Don’t you have other places to spread your nonsense?
Paker was a disaster for American Airlines. He should have been fired (and in jail) after receiving his third DWI.
Then they moan about Emirates’ alleged subsidies. ‘Privatized profits, socialized losses’ seems to be the way for these titanic corporate suckers on the public teat.
Under his failed legacy we have a severely damaged Advantage program
Massive devaluations lavatories for midgets shrinking seats wildy higher pricing
Ruined catering damaged employee morale and horrific customer service
And no interlining of baggage
I’m sure I left out some other good ones out
Great job not!
US airline execs and their employees in cahoots to get bailed out by average Americans with little to no savings? Sounds like they have company with the big players in the financial services, energy and real estate sectors in the country.
$54 billion?
Imagine the ragers I can now throw…and still bail myself out after my 500th DUI!
There were many more furloughs after 9/11 than COVID. People were on the street for YEARS after 9/11 unlike the days & weeks after COVID. FLY NAVY!!!
Economics Noble Laureate Vernon Smith wrote a paper published in The Independent Review, v. 29, n. 1, Summer 2024, ISSN 1086–1653 where he concludes:
“Whatever the government spends is financed with the creation of new money, with its real resource cost subsequently extracted from the private product sector asset values through inflation. Government grows because it is restrained by no budgetary discipline.
“For those who want a wealth tax, you already have long had it.”
Title: The Economic Function of Inflation Is to Lower
the Real Value of Wealth Assets Sufficiently to Pay for the Government’s Excess Spending Monetized by the Federal Reserve
Oh no fatty has a sad over capitalism . If you really knew what you were talking about you would work for an airline.
It sounds like he did his share in ruining airlines. Too bad he got his hands on the industry.
fantastic article gary
it takes courage to speak truth
i would argue the race to the bottom began in ’78 or ’91 or both
but regardless, the CAPTURED SYSTEM is the root cause of the race, not either party by itself
courageous and appreciated and shows you are above writing clickbait barf stories
Hmmm @derek, nice AI way to get people to do the opposite of what you say.
Meanwhile, has anyone here met Doug? I have, back when I was flying USAirways. If he didn’t do what he did, I wouldn’t be typing this now because travel was necessary for business.
Now, not so much for business, but for America, it’s more important that ever! We need to build community across America instead of Red vs. Blue. Flying makes that happen.
@Jim LeJeune – i don’t think you know what the word capitalism means when we’re talking about $54 billion in government subsidies?
@Dave W. – funny story, I was with Vernon on the day he won his Nobel Prize 23 years ago. I personally delivered a bottle of Château Lafite Rothschild gifted to him for the occasion, along with a bottle of Peter Michael chardonnay for his wife Candace who prefers white.
also to add, carty was already hard at work taking the company down before 9/11
parker is just an evil opportunist – the table was set for him by 2 generations of swindlers that preceded him
long live C.E. Woolman
@timdunn holla
Those George Mason guys, including Fukuyama.
Thank you for today’s “Two Minute Hate.”
Gary talk about Fake News. You are such a blow hard. You have definitely worn out your welcome among Airline Employees.
Hit the road.
Democrats. The party of the elite rich. We f’ over the little guy, the blacks and the white trash cause they’re too stupid to know better.
Signed,
George Clooney, Alec Baldwin, Jay-Z, Ellen DeGeneres, Robert DeNiro, Meryl Streep, Barbara Streisand, Lena Dunham….etc. etc. etc.
@Gary – wasn’t DOJ going to sue to block the proposed United – USAirways merger? Wasn’t that why it was called off?
@OCTinPHL – that was a different time the two were going to merge! the 2000 merger (United walked away in mid-2001).
Parker tried to merge with United after first taking over US Airways. In 2008 then-United CEO Glenn Tilton merely offered Parker “a senior operating role and to put him on the potential chief executive candidates list if he meets certain performance goals.” (https://www.reuters.com/article/usairways-parker/uniteds-tilton-to-give-parker-a-shot-at-top-job-ft-idUSN1556482520080515/)
Tilton effectively stuck a knife in any potential deal with Parker that way – because Parker wouldn’t be running the combined airline – though United preferred to merge with Continental in any case.
This was after Parker sought to merge with bankrupt American Trans Air in 2004 during ATA’s first bankruptcy. Then in 2006 with Delta in bankruptcy US Airways sought to take over that larger carrier.
@Gary – sorry, that makes sense. Forgot Parker wasn’t at USairways for the 2000/2001 attempt.
@ Gary — It’s only a matter of time before Delta declares bankruptcy.
Derek,
Clearly you know nothing about politics…everything you said is the exact opposite of kamala stances. Do better…we get it, you’re a shill
The entire “safety first” nonsense of a repeat offender of DWI speaks volumes of the insincerity of their blah blah blah. AA mgmt got wealthy off tax dollars, paying substandard wages and hiring the likes of Visu Raja. Now that the name, American Airlines, has been fleeced for all it was worth, subpar and substandard performances will be propped up by the hiring of cheap, ill prepared and poorly trained staff. Just because you call a lizard a bird doesn’t mean it’s ever going to fly. God help the ones waiting for that day to ever come. With the adoption of AI replacing customer service personnel, you have to know compassion is going to be series of 0 and 1’s, and most will land on, you guessed it, 0.
derek seems to be trolling with his talking points about Kamala Harris. Keep in mind that the Republican candidate for President and his favorite daughter — just goes to show how bad a parent he is by playing favorites among his children — donated money to Harris’ campaign when she was running for office in California. He probably did it for his own business reasons. When it comes to big business, we more or less have a uniparty that has already stacked the game in favor of big business. In that regard Harris is not very different. Harris won’t even commit to keeping Lina Khan in her current role at the FTC if she wins the election in November.
It’s about time someone wrote about all the money the airlines pocketed as a result of the pandemic! Many of my coworkers were unceremoniously discarded after a lifetime of loyalty. I recall Director of Transportation Pete Buttigieg called airline CEO’s to appear before Congress to ask why there were so many service disruptions due to staffing shortages when they were given pandemic money. As usual the questions were answered in standard political jargon that pacified the self serving politicians and brought any accountability to a hault. Thanks for writing this Gary
I only have one comment and it’s more of a correction, it’s America West, please, not American West as printed in the article.
I am a proud retiree of 21 + years at America West, good ole HP, and it really clips my wings when the name is misrepresented!
very well said, Gary.
Doug Parker tied his soul to labor early in his career to advance himself with the future of the companies he led to be damned.
Like a populist dictator, Parker has failed over and over because labor never understands what it takes to run a good business – the failure of UA”s ESOP is the best example in US aviation history.
Let him screw up Qantas which will benefit DL and UA at AA’s expense, once again.
What about the stock bubacks? I recall $13 billion in buybacks at roughly $43 a share. That to me was/is the biggest blunder.
Where’s the article about Deltas subsidies, or UA or all of the other airlines? The pandemic would have broken every airline in the US, without those subsidies. The EU subsidized their carriers too.
Parker stood up and asked for AA’s share of that government cheese. AA has paid back all of it.
Gary, you are just a big old drama queen.
I returned Doug to PHX one morning years ago after a trip to China. He had a window seat on the right and I’m sure was tired and not pleased while we sat waiting for ground crew at our assigned gate to clear equipment to get us parked. Doug made a point of visiting the cockpit on deplaning and this was during some serious tension between US Airways (my history) and the America West pilots. I made my points to Doug and we disagreed, but the point is, he respectfully listened. I also watched every single “Crew News” that Doug did monthly. I didn’t miss a single one. I also found his team responsive to follow up comments afterwards. If I could make any point among all this trash talk, is that a merger of US Airways with someone was inevitable. The airline economy was such that having three strong national carriers was much better for the industry than having two strong ones with forever hobbled lesser ones. A point I made as such in a published USA Today response to the Florida AG. The decisions and public grift since covid are not part of my argument. I only know what I lived and who I spoke with during that period. I did make a donation to “Breaking Down Barriers” as diversity and excellence are actually something that is not only possible, but go hand in hand and is something our United States is a perfect example of.
Wow, another problem caused by government. Who would have thunk it?
Derek,
It’s high time to pull your head out of your a$&! You said Harris wants to tax the rich. What you obviously don’t understand is that that starts by overtaxing the already heavily burdened middle class! Harris is a Marxist from the get go talking about not equality but equity. So your paycheck (if you actually get one) is going to help make sure the folks who just want to stay home and suck on the government tit get just what the guy who gets up every morning to drag his weary a$& to work will get. Sounds just like China and Russia to me. As far as Parker goes, what comes around goes around. He’ll get his. The only sad thing is we won’t all be around to see it.
Pilot
the part that you miss is that DL and UA are doing well. Other airlines including AA much less so.
And AA performed poorly for the vast majority of the time that Parker was in charge well before covid.
Gary, like me shoots from the hip.
Interesting to read elsewhere all the negative comments against $10k in student loan forgiveness but these sort of governments bailouts to the rich doesn’t come in for the same degree of scrutiny. Thanks for publicizing this Gary.
Not sure I agree with student loan forgiveness but it’s always amazing the degree of socialism for the top few percent in the U.S. Another great example was during 2008 comparing the individual homeowners vs wall street.
Only military pilots with lots of experience and very few flight incidents should be allowed to be commercial pilots. DEI is a very flawed idea. Just look at boeing and the secret service. hiring people based on the color of their skin is extreme racism. Airlines have been screwed by the american government policies. Just look at the flight attendants, pilots and service. It ranks right down there with iranian airlines. I always avoid american carriers and I am ashamed to say I am american. Ameruca sinks deeper and deeper each day as a country. Equality of opportunity is not equality of outcome. That is considered racist and why american ideals are not accepted throughout the world.
As someone who worked for America West during Frankie’s leadership, he sucked and layilaid off all the Mechanics in one day.
I really believe Doug was great, no pay increases, lead America West through US Airways merger, then the American merger..
Please be aware everything that is causing AA’s stock to tank is after Doug left.
How dare people calling me a Trump MAGA person.
Harris mist win. She will make the rich people pay their fair share. She will punish them.
Abit of perspective is needed. States imposed quarantines (NY and HI) on passangers destroying demand and airlines business. If the federal govt wants to shut the economy down and block all international travel, it bears responsibility for assisting businesses who are damaged by its policies.
Doug Parker said he would have shut AA down and furloughed employees until Covid ended without the Cares Act. The money airlines received from the Cares Act payed employees who would have been paid with unemployment insurance instead. Airlines were forced to turn over options and pay interest on the loan portion. The Cares Act was successful in helping US airlines bounce back much quicker than European counterparts.
Crony capitalism at its best.
Thanks, Congress! !
When the entire economy was being “bailed out,” why of all industries were the airlines uniquely disqualified from accepting government subsidies to keep employees on the books, especially considering the airlines felt the brunt of your decision to stop flying? Gary, this is your typical tripe, reflecting a deep and irrational prejudice of the industry. Like most people, you want your cake and you want to eat it too. Not a convincing argument.
Doug looks old.
I’m sorry but have to be captain of the obvious. Southwest has almost crashed into the ocean 3 times now this year? So has United that lost two tries during takeoff? Don’t think we have to talk about the Alaska issue. Oh yeah what about Delta the last 2 weeks, there is a reason why it stands for Don’t Expect to Leave The Airport. American is the only airline without significant safety issues as of late. I can give 2 sh@@s about the executives or the stock as long as the travel is safe and the service is good. Those that invest in airlines are stupid and always have been any smart investor would tell you that over the last 40 years. So if you are talking about the stock price you are part of the problem as to why service has degraded in the industry.