Will American Airlines CEO Robert Isom survive his carrier’s continued poor financial performance, amidst its worst operational performance in memory?
There are certainly rumors swirling that his job is on the line, although I attribute most of those to people least likely to be in a positon to actually know.
The flight attendants union actually just called for his ouster.
If you simply look at the macro-level facts, you’d expect him to be in a precarious position. But I don’t attribute actual knowledge to people saying we’re mere days away from his choosing to spend more time with his family.
Brian Sumers thinks financial analysts may have lost confidence in Isom after a disastrous earnings call where he couldn’t offer concretes on American’s Chicago strategy, ramping up flights as United does the same and whether they’re losing half a billion dollars at the airport. I think there’s a good answer, that United is wrong on the accounting and that American has to fight for Chicago as part of its cobrand credit card strategy which is the area where they actually make money. If they want to capture Chicago spend they need to be relevant to Chicago customers.
(Needless to say, I have ZERO intel on this alleged rumor)
— JonNYC (@xJonNYC) January 27, 2026
I hear from a lot of people at American Airlines – but not from current members of the Board of Directors, and presumably officers wouldn’t be kept abreast of these conversations either. But I think the reasons why he might – and might not – keep his job are fairly clear. See which predictive case you find more persuasive.
Why Robert Isom’s Job Could Be On The Line
American Airlines basically broke even in 2025. They’re debt-ridden and Wall Street doesn’t believe they have a path to meaningfully improve financial performance.
The argument for removing him at root is that American Airlines doesn’t make money, when the other global U.S. carriers earn 8 – 10% margins. And that’s because of systematic decisions made while Isom was either President or CEO of the airline.
- Strategic focus on competing directly with Spirit Airlines and Frontier. American was never going to beat Spirit and Frontier on costs. With American’s high costs they have to earn a revenue premium to generate profit, but the focus has been on cramming more seats onto planes by removing the very business class seats and extra legroom seats that Delta and United say are generating most of their money.
The very first message Robert Isom gave to employees upon becoming CEO was to “never spend a dollar” they do not have to. And as airline President he explained his vision as being as much like Spirit and Frontier as possible.
[T]oday there is a real drive within the industry and with the traveling public to want to have really at the end of the day low cost seats. And we’ve got to be cognizant of what’s out there in the marketplace and what people want to pay.
The fastest growing airlines in the United States Spirit and Frontier. Most profitable airlines in the United States Spirit. We have to be cognizant of the marketplace and that real estate that’s how we make our money.
We don’t want to make decisions that ultimately put us at a disadvantage, we’d never do that.
- Retired too many planes American Airlines needed during the pandemic. American retired their fleets of Airbus A330, Boeing 767, Boeing 757, and Embraer 195 aircraft in the name of ‘simplicity’ but it meant they no longer had the planes necessary to fully rebuild operations at all of their hubs (and so they lost ground in important markets like Los Angeles and Chicago) and they lacked the planes capable of taking advantage of the boom in long haul travel coming out of Covid. They also chose not to order more widebodies as United Airlines ate up delivery positions and now Delta has secured some as well in a tight market.
- Didn’t sell employees on a premium, service-oriented vision. American has much higher labor costs than competitors. Isom keeps reminding financial analysts that United has several open contracts, but he’s really just telling them that United has delivered better results with lower costs. He just keeps saying that the advantage will close. The thing is that American didn’t try to get anything for those higher costs, like greater accountability in service. And though he delivered the same profit sharing formula to flight attendants as non-union Delta, he isn’t delivering profits so they aren’t making what Delta flight attendants make.
Most importantly, he isn’t out on the front lines explaining to front line employees that the airline is in a battle for its soul and survival, that everyone is in this together now too because profit sharing means the airline’s success will automatically pay them more – explaining that American is no longer trying to be Spirit and Frontier, that they need to deliver on premium experiences and it’s front line employees who do that – give them a mission that’s bigger than themselves, and one that rewards them financially as well.
Just as consumers were looking for more premium products, Robert Isom was taking American in the opposite direction. A CEO’s job is ultimately strategy – to see the game board and what the company needs to deliver to customers to win, and how to execute on that – and Isom got it complete wrong.
And the other job of a CEO is to rally and motivate employees behind a vision – to get them executing on the plan he lays out. But Isom isn’t out selling a premium vision to employees.
American Airlines has an aircraft problem (not enough planes, especially widebodies). They have an aircraft layout problem (not enough premium seats). They have a service problem. They’ve been ticking off policy and product changes one by one, like better coffee and lounges and slightly better buy on board food in coach and eliminating hassles like refusing to add most customers to the standby list at gates.
But they haven’t committed to the capital expenditures necessary to fix their macro problems, they haven’t sold employees on a vision to deliver committed service, and they haven’t explained to customers a vision of where they’re going either.
Ultimately, if the board decides to remove the CEO it may wait until the next one, but the operations head has to feel like he’s rightfully next to go. American has never managed to improve its operational performance to compete with Delta, and hasn’t been willing to make investments Delta makes in order to do this – like comparable line maintenance or RFID embedded in checked bag tags. And American just suffered one of the worst airline meltdowns in recent memory, worse than Delta’s CrowdStrike experience and on par with Southwest Airlines Christmas debacle of 2022.
Why Robert Isom’s Job May Be Secure
The American Airlines board has no history of holding management accountable. CEO Doug Parker alienated employees, customers, and shareholders but kept his job. He destroyed more shareholder value than anyone else in airline history.
The closest Parker came to losing his job was after Delta snatched their LATAM partnership out from under them in fall 2019. LATAM was supposed to be an antitrust-immunized joint venture partner, but Delta bought a 20% stake and became their partner with plans to build up a Miami hub. I still expect that Delta will attack American in Miami. They added Miami – Austin, and American didn’t respond. With American embroiled in a fight for Chicago, they really don’t have the wherewithal to respond.
Even then, as investors reached out to potential replacements as CEO, the independent lead director says the board never actually considered replacing Parker. That should be a genuine embarassment for the board. Parker had built a board of cronies.
That was Parker’s board, and not Isom’s. But before turning the reins over to Isom, Parker added Isom’s former boss at Northwest Airlines to the board presumably to serve as his rabbi there.
So the argument for ‘Isom keeps his job’ is that the board of American Airlines has no history of taking its fiduciary obligations seriously, so why would they start now?
Does Robert Isom Even Want To Be CEO of American Airlines?
Frankly I don’t know why Robert Isom wants the job at this point. He hasn’t been able to turn the airline around after nearly four years at the helm. He doesn’t seem to really enjoy himself. He’s very practiced. He doesn’t get out into the operation spending time with employees and rallying them to his vision (whatever it is). He’s made plenty of money and doesn’t really need it.
It seems like he might actually be happier just joining some corporate boards and serving as an occasional guest co-host of Airlines Confidential?
Impossible. To resign, Isom would actually have to say something non-scripted…
He’s not gonna resign. Doing so would likely result in no severance package and I’m sure he has a golden parachute.
“Does Robert Isom Even Want To Be CEO”…do fish even want water?
Certainly, it would make sense for the board to want to replace Isom. The real question is who is available that would be capable of turning around this massive ship? If an upgrade is available, you gotta take it!
For a little snowstorm? Execs don’t eat their own.
Not realistic but Starlux or Alaska Airlines should run AA on a year to year contract basis.
@Joanie Adams — That’s a bingo!
If Ed didn’t lose his job after Crowdstrike, Bob’s gonna be fine. (Deal with it, Tim.)
“It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.” — Theodore Roosevelt
That last sentence is what I want to see. Parker on Airline Confidential was a really interesting and informative appearance.
Can’t wait for Isom. (And Bastian, and Kirby, in due time) when they’re able to speak freely.
Sadly, as pointed out, the spineless boards at American have a long history of not having the stomach to oust a CEO. They let Parker run amuck and have sat on their hands while Isom cluelessly flounders and blunders. I Compounding the issue is that major investors have shown this lack of stewardship.
@IsaacM — Bah! (Side note, hope you and yours are doing alright. Glad to see your posts!)
Its not just Isom, its the whole leadership (including the board). They are doing exactly what you would expect them to do. It is the scorpion and the frog story. The America West culture is deeply ingrained into AA and until they admit to that problem, nothing will change
Is this the same flight attendant union that pushed for a CEO change so American West could acquire American? Not a great track record of union positions that have benefitted members.
@Birny — If members aren’t pleased, they can vote-in new leaders, or run for leadership, themselves.
Likely he’s negotiating an exit package. AA is in a very bad position. Investing in operations and enhancing a premium experience (like enlarged and nicer lounges) takes money and these investments don’t always work out. While the airline still has cache with it’s International product (albeit missing out on routes and volume without the planes) it’s domestic product is seen as pretty pathetic. Moreover, the airline continues to be an operational dumpster fire. Does someone really give a crap about a better wine selection in business when they miss their connection to South America because planes in the evening at MIA often wait 30 minutes or more for a gate and in some situations clearing congested alley ways.
Reminds me of the speculation in 2024 over who the two Presidential candidates will pick as their running mates.
“The ones who know aren’t talking. The ones who are talking don’t know.”
@1990 — yes, I’m aware how unions are organized. While not uninteresting, it’s not relevant to the issue — whether anyone should pay attention to this flight attendants’ union proclamations about AA leadership. Their past positions were monumentally stupid for anyone to see before the acquisition. The incentives for union management don’t change with different union leadership.
The downfall of American Airlines started with the arrival of Parker and continues with Robert Isom. American was once a great airline before the arrival of the arrival of the USair guys.
AA certainly had problems before the America West takeover, but for flight attendants to believe Doug Parker was their salvation could not have looked at his track record. Given this history of flight attendants’ union misunderstanding of how to improve their company, one takes the latest missive with a grain of salt.
1990
you do realize that DL was still the most profitable airline in the quarter in which CrowdStrike hit, even w/ a $500 million charge?
and execs don’t get canned because a competitor does something right as you go “on the air” with Wall Street analysts.
Isom can’t get AA profitable at more than token levels regardless of the weather. THAT is why Isom’s job is on the line – if it is at all.
@Tim Dunn — ‘Profitability’ in a given moment isn’t the only metric that matters. AA’s had a rough year, a rough start to this year, like last year, lest we forget AA5342.
@Birny — You’re whining about past positions within the unions, and, my point is, if they want to change course, they can. You’re talking about hindsight being 20-20 above.
American Airlines doesn’t have the money they need to spend. Their debt load is by far the highest of the 3 majors although they have been paying it down. However, at $2 billion or $3 billion a year, this is not fast enough to fully implement a premiumization strategy fast enough at scale. And they need planes for now and over several years, but the waitlist is long. So, what’s the answer? I think they should consider exploring a trio: partial monetization of AAdvantage (although there are encumbrance issues there); an unusual but doable recapitalization bringing in new investors, perhaps a partial debt for equity swap, and all within a structure that would give existing equity holders a more valuable piece of a smaller pie but with potential for better future return with less risk if successful; minority investment by a well capitalized foreign carrier with underutilized metal.
of course profitability isn’t the ONLY metric but it is the one that matters the most.
but DL also ended up with the 2nd best on-time in the industry – behind Hawaiian – for 2024, had the 3rd best cancellation rate – behind WN and HA, the lowest baggage mishandling rate of the big 3 (obviously a number of LCCs and ULCCs which focus on connecting traffic consistently do better on baggage handling), best involuntary denied boarding rate….
In other words, you want to are unable to see that all airlines have operational events but it really didn’t make a difference in DL’s overall performance for the year.
In contrast, AA underperforms on multiple metrics ON A CONTINUOUS BASIS – and that is the reason why any CEO’s longevity should be questioned.
and, it is amazing how quickly you and others are quick to INCESSANTLY bring up Crowdstrike but you give AS and WN a pass on the poor vendor choices they made that led to the grounding of the MAX 9 and all MAX operators earlier – and DL experienced none of that.
and UA cancelled about half the number of total flights due to CRWD as DL and has seen 2 system meltdowns due to overscheduling EWR and yet no one has ever called for Scott Kirby’s head.
There are all kinds of reasons to call for Isom’s head but anecdotal incidents are rarely the reason. Consistent underperformance across all areas is and will be the reason that Isom’s head is on the block – if it is.
@1990 mostly good here. I’m laying low a bit due to inherent risk of being a bit more tan than many others. P2 has been out and about in the community doing things for the people.
Mostly I feel that the tide is turning a bit towards a bit more law and order side from the empire so I’ll take small victories.
Getting back on the premium airline shuttle on Monday after a couple of weeks so there’s that to look forward to.
@John C
Do you think the board will actually go for an outsider if they do decide to make a change at the top?
“American Airlines basically broke even in 2025. They’re debt-ridden and Wall Street doesn’t believe they have a path to meaningfully improve financial performance”
While AA has a bit more debt than UA, they do have an aggressive plan to pay it down, and have been doing so for years.
Didn’t sell employees on a premium, service-oriented vision. American has much higher labor costs than competitors.
No AA does not have higher labor costs than DL. Yet they do vs UA and LLCs
Yes, AA DID NOT tell or sell employees on the premium shift. However on every AA flight I’ve taken, the service has been great. So this idea has no legs.
The FAs have never gotten a change in leadership and they won’t now, not that they’re wrong, but because AA can hire replacement FAs and views them as the problem.
Isom should be replaced and and management with a AWA/USAir pedigree with him.
Will someone please explain to me why American just can’t “unretire“ some of the planes that it and other airlines retired during the pandemic? There must be tons sitting on the ground at Victorville. Have they all been cannibalized to such an extent that they can no longer be used?
The trigger for a CEO change at AA is less “they are unprofitable” and more “the equity story breaks with the credit story.” Right now management just bought itself a window by putting out 2026 guidance above consensus, and by emphasizing debt reduction and a free cash flow target that, if hit, de risks the balance sheet narrative that spooks boards most. In practice, boards will tolerate mediocre margins longer than they will tolerate a credibility gap with lenders and ratings, because that is what constrains fleet, IT, and operational investment, and it becomes a self fulfilling spiral.
My prediction: Isom stays through the 2026 peak, and the board uses him as the “adult in the room” to execute the paydown plan, unless AA is forced into a mid year guidance cut or suffers another high visibility operational failure that clearly reads as structural rather than weather. That combo is what flips the internal narrative from “we’re on a path” to “we’re losing the right to our own plan.” If AA hits the cash and debt milestones while showing even modest operational stabilization, he survives, if they miss either one, you will see a rapid pivot to a fresh operator, likely with a mandate to simplify the network and fund reliability before anything else. Guidance buys time, ops spend it.
Until American actually has a competent BOD, inept bunglers like Isom (and Parker before him) have nothing to worry about on the job security front. Unfortunately that means AA keeps drifting rather than headed in a steady direction. I’d say that American really needs Oscar Munoz. Munoz is exactly what is needed to shift the airline towards having a premium product and a motivated workforce. He did a magnificent job at United, setting up Kirby for success.
This is what the APA, AFA, etc. wanted when they felt it was better to get Parker on board rather than keeping Horton. In fact, the head of the APA was bragging about it at the time of the so-called “merger”.
While I’m a loyal AA/OneWorld flyer, no sympathy from me.
Does it really matter who the CEO is if there isn’t change to the board? They’re as much or more of an issue in the mess that’s AA than anyone.
US Airways ruined American Airlines. I know, I worked for AA for nearly five decades. When Parker arrived with Isom, he wanted to 1) do away with the A321 3 class from JFK to LAX. 2) refused, initially to give his employees profit sharing …we got it only after Delta and United gave it to their grateful employees, and 3) Isom chose to compete with Spirit and Frontier, while DL and UA chose to compete with the carriers with very high approval ratings. The result? AA continues to loses more bags, mishandle more wheelchairs, receive the largest number of complaints, than any other airline (Well I should caveat that. One month or two, another carrier will take those honors, but it is generally AA). Isom should have been fired years ago. In the meantime, employee morale remains very low. I love it when I read about all of these fabulous seating changed to the 787 and other aircraft (and they are, indeed beautiful). But it doesn’t mean anything if all of the customer service employees are so beat down that they can barely manage a smile. I loved the old AA. The new one is unrecognizable
The first step in admitting you have a problem is to ADMIT you have a problem. As near as I can tell, no one — not President nor CEO — at American has ever said, “Ooops, we got that wrong…better fix it!” Instead, it’s “Damn the torpedos! Full speed ahead…” and then it will be TWO [domestic] legacy carriers in the skies over the States, not three…
What a joke….airplane problem? Wtf are you talking about. AA has the youngest legacy fleet and it’s not even close. DAL has an ancient fleet and Boeing and Airbus are lagging way behind on orders. Keep chugging that UAL DAL gravy. Won’t be reading another article from here again. Completely false