Robert Isom was picked as American’s next CEO, more or less, in 2016 when the airline let go of Scott Kirby (who is now CEO of United). It’s been expected that this would happen in 2021 based on leaks from the company and then in late October current CEO Doug Parker received the Wings Club’s lifetime achievement award – he was retiring in all but the announcement.
The announcement finally came last week, with Doug Parker remaining Chairman and CEO until March 31 when he’ll become non-executive Chairman and Isom will step into the CEO role. I offered him an agenda for his new role should he choose to take it.
At an internal employee meeting last week (a recording of which was reviewed by View From The Wing), he discussed how he sees himself stepping into the role and just what his vision is. Some have suggested it’s not merely ‘meet the new boss, same as the old boss.’ Before he was carrying out instructions from others, now he’s the boss. But he made clear he sees it differently, that he was a part of all of the airline’s major decisions the past several years and his becoming CEO is about continuity rather than change.
Robert Isom explained his CEO transition, “I’ve been President for the last 5 years. The Board has been interested, and Doug raised his hand and said ‘I’ve been doing this job for a long time.'” He said he knew that all employees would join him in a round of applause for Doug Parker. (No one did.)
He also offered we’ll learn soon who replaces him as President, as well as other leadership reshuffles. Betting seems to favor Vasu Raja (though he’s still quite green in senior leadership, smart but with some clear blind spots) over Chief Operating Officer David Seymour who’s been with Isom longer and has continually failed upward. It’ll be an interesting test, as well as learning who – besides Elise Eberwein – may also be leaving.
There’ll be more news probably in the next week on how we align further with the business with our leadership team. The good news is I’ve had commitments from the team to really go and run and make sure we aggressively pursue our goals.
A flight attendant asked Isom for his vision for the airline as its new leader. And he offered again that he’s a continuation of existing priorities.
I’ve been President for 5 years. So that’s a long time in and of itself. And I’ve been involved in every strategic decision of this company for good, and I know during some difficult times as well.
So my vision is consistent with our purpose, which is to take care of people on life’s journey. Right now, today, that is all about welcoming customers back to a reliable product. That’s absolutely positively what we have to do to deliver to folks and also it’s the way we take care of ourselves too. It’s the way you have some certainty to your schedule. It’s the way you have a better experience with people on the aircraft itself. And then ultimately we’ve got to make sure that American Airlines returns to profitability this year.
We have to. That’s another one where if we don’t do it, it’s an issue for all of us in terms of our job security and what we want to do for our customers. But that’s not enough to sustain. That’s immediate priorities. We have to be on a path to make American the best airline in the business. And I’m intent on that.
We worked so hard during these last few years to position American in the right spot. We have the best network in the business. I love how we’ve set ourselves up domestically and are really getting as much as we can out of our hubs. The relationships we’ve set up to augment is allowing us to fly to places we couldn’t before because we wouldn’t have had the ability to connect the demand and so JetBlue and Alaska and some of the relationships we’re trying to set up in South America, we’re in a really good spot from a network position.
…Also the fact that we’ve got the newest fleet in the business, and that we prepared ourselves to weather the rest of the pandemic with the kind of cash we need on hand. Look, we’re in a really good spot. And ultimately having an experience that we can deliver to customers.
A pilot asked Isom about the airline’s intention to make culture a competitive advantage, suggesting it’s something that most employees don’t even know and those that have even heard of it don’t know what it means. And Isom says more of the same, but perhaps more focused on the bottom line.
It is about the same as it was four years ago, and even before that. We’ve got to figure out a way to take care of our team. We’ve got to take care of our customers. And we’ve got to find a way to make American thrive for the long term in terms of financial performance.
…We as a company have a purpose of taking care of people on life’s journey…but our team can’t be taken care of unless American is financially sound. Right now I am incredibly focused on getting out of losses and to where American can thrive for the future.
American has underperformed the industry financially, alienating shareholders. They’ve alienated customers and employees. They’ve focused primarily on operational reliability but haven’t delivered that, as they’ve offered a ‘me too’ (but a little bit less) inflight product. They lack a strategy for earning a revenue premium over competitors, necessary because of their lagging financials and crushing debt. So far it doesn’t sound like Isom sees that the current path is unsustainable over the long term.