Union leaders from acros American Airlines work groups have come together in an intervention to try to influence the direction of a flailing airline whose financial performance continues to lag the industry. They’re worried that an airline that underperforms will have less money to pay them – meaning long-term lower wages and less job security.
Pilots; flight attendants; aircraft dispatchers; passenger service agents; rampers and mechanics unions convened last week and issued a statement, and will come back together at the pilot union headquarters in October.
They’re right that there’s more surplus to extract from a profitable enterprise. That’s an important realization. And they’re right that this management has performed poorly over the past decade. However, letting the inmates run the asylum isn’t a recipe for financial success. Their incentives aren’t the same as shareholders or passengers (and management hasn’t done much to align them).
And calling for “service improvements that include greater employee empowerment and enhanced employee protections” underscores this reality.
Indeed, in some cases it’s these enhanced employee protections that are the problem, since American has a service problem relative to competitors like Delta and JetBlue and even United. Of course there are great crews, and it’s managemnet that’s to blame for not rewarding great service, not working to weed out unhappy employees, and not selecting for talent that’s going to overdeliver. But more employee protections just aren’t a way to fix that.
This comes as American is finally promising major changes to reverse a dozen years of neglect under former US Airways management.
Frequent flyers were leaving the airline even before the pandemic. American has a huge net promoter score deficit versus Delta and United. It’s progress that they’re now actually using NPS as a metric.
But their attempt to win back managed corporate travel seems to just be driving up cost, not increasing revenue since it’s the decline of the airline’s position in key business markets like New York, Chicago and Los Angeles that’s causing them to lose share.
I’ve said for many years that no airline has greater potential than American Airlines to be better than it is today. They’ve checked off a number of ‘quick wins’ over the past several months, like improving standby policies, letting premium passengers keep headphones until landing, and adding buy on board food for sale on more flights.
The real question is whether they’re willing to make long-term capital investments in passenger experience. Towards that end it’s great to see the commitment to a business class Flagship lounge for Charlotte and what I understand are plans to do the first renovation of an Admirals Club into the new style (Washington National D concourse).
American is quietly improving more than anyone realizes – but even their own employees don’t know it.
CEO Robert Isom needs to be out on the road, visiting stations, articulating a clear vision – one that customers can understand and also for employees can internalize so that they know service they’re meant to deliver. When Oscar Munoz did this, it’s what began to turn United around.
(HT: Paddle Your Own Kanoo)
Good. Organize. Workers (and consumers) don’t have to accept worse and worse. Demand better.
Well said, Gary, as I scan those 4 bullet points out the top, only a single term (“greater employee empowerment”) has the potential to improve customer outcomes. Every remaining term either has the potential to worsen AA’s financial performance or worsen customer outcomes.
the last paragraph is key.
Leaders can and should convey strategy and vision and AA hasn’t done it. Perhaps they are afraid of failing again but they need to be bold in figuring out where they are planning to go and get everyone onboard.
and some of the execs simply do not have a vision for what AA can be.
How about focus on yourself first. It’s rich when the surly FAs, who have no education, no clue how to do anything in life except serve drinks and browse on their phones, who hate their job and it shows, are lecturing others on how to do their job better. You’re the main reason AA lags financially. Same goes for the bag throwers, the power tripping gate agents, and basically all the miserable customer facing workers.
Mantis – Well said. The front facing gate agents and flight attendants are my two biggest complaints about AA.
First of all Isom needs to go. We was never the right pick when Parker stepped down. Unlike Parker who was doing monthly meetings with employees and visiting hubs, Isom is nowhere to be found. Counting his money I guess.
I agree that AA has made a number of positive yet small improvements this year. They seem to be going in the right direction but at a very slow pace. I think they need to identify the single most impactful improvement they can make and launch it in a big way. They should also relook their route structure. They ceded away so much business to the competition on coast to coast flights and northeast to Florida routes.
Heads up AA, and take a lesson from the competition WN. The GK years were filled with lies to the employees and to the Customers ending in unfulfilled promises as he toured the Stations throughout the system. When the promises come from Isom, hold his feet to the fire and hopefully keep the Predator at bay.
It would be a good start by having decent aircraft on transcon flights. On MIA LAX used to have a widebody with lie flat seats. Now these narrow body flights with no IFE leave a lot to be desired. I, along with many others are willing to pay thousands for decent seating. I travel often MIA LAX and pay F fare. If a better aircraft (I.e. 777, 787, etc)
more flyers would purchase, meaning more revenue for AA. That, coupled with other needed improvements would make AA the great airline
Isom seems to be at the root of the problem. These episodes with American Airlines kinda reminds me of the merger of Boeing and McDonnell-Douglas. Putting Harry Stonecypher in charge of the new combined companies was the downfall of Boeing!
@Helen
What do you mean no IFE. I much prefer the ability to use my personal IPAD to connect to the IFE rather than using the scratched up and faded screen on in seat displays. Just flew back from Europe yesterday and the screen was scratched hand on the 787 you can’t access the IFE through your personal device and can’t use your blue tooth headphones as well.
@Mantis — Keep ‘carrying water’ for those billionaires and their mercenaries (CEOs like Isom who made $31 million in compensation for 2024…) Real ‘the beatings will continue until morale improves’ vibes…
The only way that they will accomplish their goal will be to convince shareholders to completely shake up the Board of Directors from the ground up. All new board members and an entirely new C-suite with a totally different strategic vision. Until that happens, or until bankruptcy occurs, nothing meaningful will change.
Elliott Investment Management will be looking for a new company to invest in soon.
@Mike Hunt.
You are absolutely correct.
@jns — Let see… already charges for checked bags… already charges for assigned seats… welp, I guess our job is nearly done here… only thing left to do is to sell it and grab our golden parachutes — Elliott (mis)Management
I was on cancelled flight on Thursday back to Dallas. Plane came to in around 7pm. Ferried back empty to DFW around 4:30am. (Regulations allow more liberal pilot flying times for empty aircraft) and I was left to fend for myself – weather. Lowly Platinum couldn’t get a person on the AA phone. Cost me a hotel night and dinner and more importantly a whole day. Had to connect through hub, as no direct flights or at least that’s what online said. Look up “AA cancellation policy vs Delta” on AI – AA uses strategy to get planes back for no interruptions for next day start. Delta uses strategy that requires bit more investment in crews/planes but they fly late (even a lot later) but get you (and plane) home. Look it up – it’s fascinating. My issue is not with frontline – I’d be miserable too if mgt treated me like AA does theirs – I’m really tired with “don’t spend a dollar more than necessary” mentality of AA Execs. Where’s Mr Crandall when you need him. (Not PE – they will be even worse)
I went from flying AA 1-2 times a week to moving all that business to UA and DL. Over $30K a year in fares and tens of thousands in credit card spend…poof…gone. Not to return any time soon.
The culture at AA is, quite simply, busted. Corporate leadership has built an unsustainable cost structure. Customer-facing employee performance is inconsistent. Hard and soft products are failing to keep pace with traditional competitors. Route strategies are haphazard. Operational reliability is in the toilet. Messages put in the ether signaled that AA could care less about its customers.
If AA wants to fix this quick, it’s time to clean house in the C-suite and time to drop the hammer on customer-facing employee performance. It’s also time to get serious about offering a CONSISTENT, premium experience to their customers.
@ Gary — Correction: “CEO Robert Isom needs to be out” of a job. He needs to go. NOW.
@ Parker — +2 from my household. Haven’t missed AA at all. UA has been a breath of fresh air. DL still needs some work to improve phone service that they destroyed during COVID and F seating that has unacceptably low pitch on almost all aircraft. At least DL HAS phone service, unlike AA, where they’ll call you back when it is convenient for them. I very rarely book a cash ticket on AA, and when I do, I credit it to AS.
@Gene — Taking DeltaOne today on their upgraded 764 and the 359. Gonna be a long journey but so far the hard and soft products are treating us well. @Tim Dunn would be proud!
@Gene – Getting rid of Isom would be totally meaningless without a complete sweep of the Board. They are all incurably infected the ULCC strategic thinking a la US/HP, so whomever might replace Isom under their leadership would only be a carbon copy in terms of business mindset.
@ 1990 — Nice! It’s amazing what DL did with the same space on the 764s vs my favorite, the 763! And the 359s are super nice (all 3 of them 🙂 )!
@Gene — Not to wax poetic on hard product, but… I got the ‘crew rest seat’ (4D) on the 764, which has the extra curtains (even though there’s no door, like on the 359); yeah, the 763 is ancient, though, as I’ve said before, I’ve ‘learned to stop worrying and love’ the old girl, because it’s lie-flat has good length (for the taller folks), and the GUCs can be from Main to D1; those older 332s with the herringbone are maybe my least favorite (I know, Tim, they’re working on it!) This is where United has done better for consistency in upgrading all its 767 and most 777 to new Polaris, except those truly awful 772s with the reverse 2-4-2, which may be the absolute worst, but thankfully it’s usually just on a few domestic short-haul and transcons. AA just needs to upgrade its 777, 789, and a321T to the new Flagship Suites, then all will be right with the world.
1. The reference to “former USAir” management running AA into the ground creates a false impression that they no longer run the airline. Make no mistake about it, the entire Managment organization (line; staff and C-suite are the same inbred incompetents that were forced in with the merger.
2. It’s always interesting to note the unions referencing “weeding out poor performers. “Get real, THEY are the reason thousands of slackers and deadbeats continue to infest the airline.
Only one solution…….a complete housecleaning similar to their crosstown rivals….Southwest.
As a current employer of AA I love how the unions are handed everything under the sun while the rest of us, meaning lower level management employees are lucky to see a 2% raise on a yearly basis! These unions could care less about the company as all they care for are more overpriced labor contracts! This company is so flawed it’s not even funny and I could run it much better so these so called leaders of the company!
Upper management does not listen to the ideas of their workers and they don’t care as at the end of the day they only care about one thing and that’s themselves!
Looking back into time now I wish I would’ve gone to work at Delta or United as these companies are at least better st treating their customers and most employees!
Parker (Former CEO) left a mess. Parker and the rest of the US Air clowns ruined a once great airline. Isom made his millions for poor performance and I now is the time to fire Isom and bring in a new team..
At these point the moral is só low ,and a lot of pressure from manegement towards the employeds ,but in the end of the day nothing change for better ,very sad !!
Calling the employees “inmates” and “running the asylum” is rather crass and disrespectful, and not terms to describe workers in 2025. Folks can do better with conveying labor and leadership.
This is what I have to say to American Airlines: Shame, shame, shame…that you have allowed a once great airline to come to this! As a former employee of 23 years, since 1985, when this airline was at the pinnacle of U.S. based airlines; when employees had great PRIDE in working for this company; when it was a “badge of honor” to work there; when it was a life-long dream to work there (like it was for me); that you should allow this once great company to wallow in mediocrity, is a very shameful thing. You should be ashamed. I am now ashamed of you.
@ 1990 — Here’s an easier way to make all well with your world — stay home, where I suspect that your beds are all flat and longer than DLs and where all your toilets are much larger! Use the extra cash for new bedding and a Japanese-style toilet!
@coffee please
Obviously all the traveling around Parker did had no effect on the quality of AA.
Also, maybe you’re talking about AA IFE that’s in poor state. Delta IFE is pretty good.
@John
The grass isn’t any greener at UAL for their non-unionized, basic management employees.
They get treated like dirt, too and have no job protections outside of local, state and federal laws.
@Gene — I like where your head is at. Those toilets are like spaceships! (And they practically cost as much, too.)
What is AA’s position on DEI?
I have read other airline journalists and analysts say that Isom probably has until next year’s shareholders meeting to improve margins and increase corporate flying. If there is no significant improvement, Isom is gone.
So, who replaces Isom? I would suggest an executive from a cruise line. Cruise lines make significant capital expenditures, constantly tweak the product, and train crews to be helpful and friendly.
The only downside to my idea is that cruise lines are mostly non-union. So, dealing with AA’s six unions would be a challenge.
My opinion is like an ***h***. Everybody’s got one. American’s board of directors are the ones at fault.They need to pull their collective heads out of their..er…the sand and demand change. Cut off the heads of the vipers currently at the helm. Then hire a CEO and upper management who cares about turning American around and stop the tightening vortex into bankruptcy. One chairman of the board of a large company fired the CEO due to incompetence. He took over the company and sent an email to all of the employees. It basically said that “I hired XXX and I fired XXX.”, everyone is going to have to sacrifice to get the company back on its financial feet. Yeah, there were firings for incompetence. If you choose to leave the company, then thank you for your service. You will receive a respectable severance, good references and we wish you godspeed. If you choose to stay with us and work out this mess we’re in, then EVERYONE would have to take a pay cut with the promise that these cuts would be temporary and restitution would be made.That company pulled itself out of the quagmire and lived up to the promises made to the employees. Good management will inspire the employees to not only feel better about themselves but know that management is working with them…not at them. There would be no need for union representation if management put the employees as #2…right behind #1 safety. But, the airline has unions. That’s fine provided the new management and the unions are willing to negotiate in GOOD FAITH and reach a consensus. There MUST be give and take on both sides with a carrot at the end of the stick when they succeed. NO ALL OR NOTHING. There are air carriers and other companies serving the public that practice #1 and #2 and the rest falls into place… safety, happy employees, happy customers and happy stock holders.
I think I rained on your parade.
The elephant in the room is not going anywhere.
Think … meritocracy.
Robert has to go !!!
WOW!! So many mixed feelings about my return to this new modern model of AA. I spent many years before working the “Legacy AA” and the poor Management system was still .
The New AA is just a sad ssa joke. Dysfunctional, upper Management who thinks that working in a Utter misuse of funds Wannabe “Google office looking complex” will encourage and make employees happy is just a temporary hi, because once you’re thrown into new role, it takes no time at all to get a really good reality check of Micromanagement 101. You’re Responsibilities are to try and get a ” Not one but Two different unionized Mechanics labour groups” who BTW were just given a 17% raise to work as a team..and still not happy. The genius upper Management gave their direct supervision a paltry 4% increase if that much. So Already not enough bananas for the hungry monkees…a recipe for disaster..too add more.
The Bid system they have at one of the major stations is always FUBARed! Why??
1) Because of all the swaps between employees to make their lives more comfortable, the more likely your NOT going to have enough qualified techs on shift to complete workloads for the morning departures.
3. Parts ordered for aircraft to become serviceable is a gaggle#@&% to say the least, and when the aircraft is not ready, the underpaid, overworked 4 percenter Sups gets the pipe.
4.With all that fancy Google factory training at the new Battrillion dollar headquarters, they still can’t figure out how to “Empower and Trust their Frontline Supervisor’s and more importantly the Crew Chiefs in running their crews correctly.
5. They’re into Micromanagement 101 and Direct disciplinary measures to try and steer the ship, which I know for a fact will not correct issues, but only make things worse.
6. Due to the upper leadership deficiencies in Empowerment and supporting your Frontline Supervisor’s and of course paying them lower than the Mechanics their tasked to complete their responsibilities… well than there is the always revolving door of MORE Supervisor’s exiting than new qualified Supervisor’s coming in ..
This is just one of many issues at out of touch AA.
Mike Hunt is the only one who has a clue where to start. Right now AA has an incompetent, corrupt board of directors who has continued to allow a fundamentally bad and greedy CEO who for years has not just not only continued to make one bad decision after another, but truly believes these bad decisions are good — and therefor drives company strategy — down the worst possible path. United’s stock is worth’TEN TIMES American’s stock.. This alone should long ago have moved the board to replace Robert Isom but the board is half the problem, and he’s the other half. What should be a system of checks and balances instead is a scandal of patting each other on the back and keeping each other in their positions getting rich while destroying the company. That’s the reason this has gone on so long. The shareholders have to wake up, possibly partner with the unions, and do some serious recruiting of real, actual talent like poaching from Delta and United, and replacing the entire board of directors and C-Suite with the opposite mentality and strategy from the ones in there now. This is the only hope.
James,
many of your statements are correct but your statement about stock price is categorically incorrect.
Market cap, which is the total size of the pie is what matters, and not the price of each share. Share price is simply a reflection of the size of EACH PIECE of the pie but any company can “cut the pie” into whatever size it wants.
AAL’s market cap is 27% of UAL’s – which indeed indicates how investors via AAL relative to UAL.
However, UAL’s market cap is only 80% of Delta’s indicating how much more valuable DAL is and how much more consistently well-run it has been – and investors expect it to be – in the future.
DAL’s market cap is almost 5% that of AAL.
Market cap is heavily influenced by profitability but also by debt and financial commitments.
AAL is much less profitable than DAL or UAL but DAL has a better balance sheet than both – LUV even better than all of the big 3. UAL’s massive order book does weigh down its view among investors. AAL like DAL has a much smaller order book but all of the big 4 can get as many airplanes from Airbus and Boeing – and Embraer – as they want. DAL carries very little cash on hand because it has large lines of credit (which helps reduce the possibility of activist investors swooping in to buy stock and strip the cash) while UAL carries alot of cash but has more long-term debt than DAL.
AAL has been mismanaged and its franchise looks like UAL’s 10 years ago but AAL is not in as bad of shape – at least from a financial standpoint – as you suggest.
With AA, all about hitting the DOT metrics to “compete” with the big OAs, so they can tout how much better their performance is. It hurts the customers when you delay flights overnight to the next day, all in the name of completion factor. Just waiting for when they add time to airplanes on the ground in order to improve on-time performance.
As far as replacing the CEO, the old saying is that sports teams replace the coach after a losing year because they can’t replace the players. I’ve been in corporations where the CEO has been replaced because of poor performance, only to have that CEO appear to be failing. The CEO faces corporate inertia, as there have, at best, direct influence over their second level down.
Employee empowerment leads to inconsistent customer experiences, as different employees treat passengers differently. Many times, consistent service beats a combination of excellent service and mediocre service. Removing instances of the worst service can be more helpful than raising the average service, as awful service makes a bigger impression than awesome service.
Lastly, I’ll give an example of how United handled their weight and balance recovery. I was standing in live for a redeye. My flight looked to be one of the few which was largely unaffected, as the incoming flight left on time. Alas, the crew to operate the flight was not all present. The SFO gate agents were keeping us informed on one remaining flight attendant who was on an inbound flight up into that flight landed and was headed to our gate. They also were very helpful with passengers from other flights suffering from delays or cancellations. I also heard United proactively use unusual routing to help fix passengers on cancelled flights get to their destination. For example, the SFO to Toronto flight was cancelled, and some of the passengers were redirected to a flight to an airport in Tennessee, where there was a presumably Air Canada flight to Toronto. This was done automatically, without phone calls to customer service or standing in line. They would be flying out of my gate after my flight left. While I’m sure not everyone was so lucky, United does seem to add unusual routing in both normal and irregular operations when direct operations don’t have availability, such as Houston->New Orleans->Newark when the direct flights were full.
American needs to work on making irregular operations better for passengers, crew, and aircraft. This almost surely the worst experience passengers face, and one where the airline is most likely not to take their frustrations out on airline staff if they understand what is going to happen next.
@ Tim — Bye Felicia.
Sorry Gary, but more micro managing will NOT improve service. Time for you to learn the realities of managing people.
I like American Airlines, but I live with the airline too.
AA could easily rebrand themselves as Air Temu.
They need another Crandall. I was an AA Flight Attendant/Purser in the 80s-90s. Most of us had a college degree or some level of flight experience with strict performance and appearance standards. Our supervisors did check rides and we had recurrent training to ensure those standards were met. We used to say “Crandall was a SOB but luckily he was our SOB.” It was a time of great expansion and even the little people got profit sharing. I have flown AA a few times recently. Ticketing and flight attendant staff were nice enough, but FAs disappeared on a 2 hour flight. Seats in coach were much more comfortable on their newer aircraft, some had charging stations at each seat. AA has always had challenges with contract negotiations, even leading to strikes. Competition in the airline business has always been fierce. AA seems to have been on a downhill slide since they acquired USAIR. Many once-great airlines have disappeared…they should serve as a cautionary tale.
This company only cares about upper management and the higher stock holders. When AA employee reaches 1, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50 or more the only thing everyone get is a letter and a certificate of years render. I read the Emirates Airlines employee got a Omega watch after 20 years of service it was a excellent gesture comparing to us. Also, when a family member dies non of management goes to the funeral. I hope you (Gary Leff) can fallow up with a report on this matters.
Has anyone figured out what UAL did to this Dunn guy yet? It’s like a personal beef with Kirby and UAL. He doesn’t care even if means pulling numbers from the thin air to make himself and DL look good at UAL’s expense. I really need to know.