Before the pandemic American Airlines underperformed the industry. They had more debt and lower profit margins. They had managed to alienate customers, employees, and investors alike. Their own data shows they had chased away frequent flyers.
The airline had one excuse after another, from the grounding of the Boeing 737 MAX to disgruntled mechanics, for why they failed to meet their potential. Their response was to double down on their existing strategy rather than change course.
When American Airlines lost their LATAM partnership last fall the floodgates of criticism finally opened. People were openly asking how the Board of Directors could abide a plummeting share price and broken operation at an airline which seemed strategically adrift?
Alison Sider of the Wall Street Journal reports on how far this really went (emphasis mine),
The airline promised 2020 would be better, but investors were restive after years of lagging profits and share performance—some began discussing among themselves shaking up the airline’s management and reached out to potential replacements for Mr. Parker, including current and former executives at rival airlines, said people familiar with the discussions, though some of the talks didn’t advance far.
“It was a hard year,” Mr. Parker said. But “I didn’t feel particularly pressured.” John Cahill, American’s lead independent director, said the board wasn’t approached about any such plan and never considered a management change.
Doug Parker testifying on the need for subsidies to the US airline industry in 2001
American Airlines rolled out a new standard domestic product to their customers, and the CEO didn’t test it out himself before it launched and didn’t even bother experiencing the core product until it was in the market for 9 months. When the airline pulled meals off their flights in the current crisis the CEO didn’t even know in advance. And the airline has lacked a mission statement though they finally did come up with an anodyne slogan and he’s great in Halloween videos.
However now they have the excuse to end all excuses, the global pandemic. Although CEO Parker will have to revise how he sees his legacy.