The CEO of American Completely Misunderstands What’s Wrong With His Airline and How to Fix It

American Airlines Chairman and CEO Doug Parker thinks the only thing wrong with the airline is their operational performance, that’s the fault of the mechanics, but getting a new contract between the airline and its separate US Airways and American mechanics is the job of the federal government.

Here are some of the points he made in a recent Dallas Morning News interview:

  1. The only thing wrong with American Airlines is flight delays and cancellations and when mechanics behave themselves that’s not an issue. It’s the same message as airline President Robert Isom promising ‘no excuses’ while blaming the airline’s poor performance on their mechanics and the grounding of the Boeing 737 MAX.

  2. A contract with mechanics is no longer his responsibility. (“The facts are these: The National Mediation Board is in charge of the negotiations. Until last month, the NMB hadn’t called us into negotiations since April. …We are highly hopeful that the NMB will help us come to a proposal in the near future. “) He’s the Chairman and CEO of the airline.

  3. Losing LATAM wasn’t a surprise (“To say we were surprised that LATAM went somewhere else, it was not a surprise”) more downplaying here, though Parker also admits he didn’t know the deal was coming, and that he didn’t think it would happen. More muddled messaging.

  4. Their new billion dollar head office is cool cost overruns aside because it “makes people feel important.” And like Buckaroo Bonzai, “But most important, it’s where we are.” No question the old company headquarters was drab.

The problem with American Airlines is lack of a clear vision of who they are and what customers they serve. There’s no mission statement to unify and order their priorities. Front line employees don’t know what kind of product they’re supposed to try to deliver, whether they’re matching Spirit or offering a premium product.

When the airline cancels 4% of its flights, that overwhelms everything else to be sure but it is not the case that fixing on-time departures and avoiding cancellations solves the airline’s problems. It simply brings the underlying issues into starker relief.

Recall of course that the airline believed they had a premium revenue problem even before mechanics started slowing down the airline (and American’s operational problems have been about much more than just the mechanics).

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. This airline has arguably not known what it is for ages.

    Think about some of their slogans, “Doing what we do best.” Ummm… Who was that supposed to entice? “We’re great at beverage service, but the food stinks… So we’re canceling food!”

    “Something special in the air” was less horrible. It was arguably something that once existed. And so when it stopped?

    “We know why you fly”. “We don’t much care about you and are pretty convinced it’s solely about getting there cheaply, at something that remotely approximates the schedule. I mean some of you fly spirit.”

    I think about what message it sent to be “the big airline with the hometown touch” (Allegheny) or to say “we love to fly, and it shows” (Delta).

    It’s true that a slogan isn’t a mission, it’s more of a “brand promise”. “Fly the friendly skies” (United) once put the whole flight crew on notice that the airline was selling them — and to a less extent other civilized passengers — as the thing people pay for.

    American isn’t about anything. It runs most flights like an LCC, it has absolutely gutted the pioneering Aadvantage program (yes, yes, unless you want to fly Cathay or Qatar… which affects maybe 1% of flyers), it doesn’t offer any reasonable expectation of on-time arrival in aggregate. The average flight crew has about 1/2 the customer-facing people clearly wishing they weren’t on the plane.

    You have to fire the CEO of this dumpster fire. You have to completely realign the airline around either (1) providing a great customer experience or (2) being cheaper than other airlines. There isn’t much middle ground these days.

  2. Parker is only saying these things now to justify the current state of the airline. If he really were concerned then some of his revenue projections would also be coming true…

  3. Last week it was reported Parker was on his way out. Parker thinks his employees are the enemy.He should get involved with his labor negotiations after being without a union contract for 4 years. It has also been reported that Parker is running out of groups to offend (employees, retirees, investors, passengers, LATAM).Firer Parker so American can return to the great airline it once was.

  4. Parker seemed to be reasonably well regarded back when he was running America West / US Air. I don’t understand what has happened since then. Have other airlines become better and he hasn’t been able to make AA keep up? Did he Peter Principle somewhere between running an airline the size of America West and runninng an airline the size of American? Was America West too much of a different animal than American (smaller and, in theory, more down-market)? Does he not have as good of a team around him? Or is it some combination of these and other factors?

  5. Human(?) cloning completed.

    All left for doug now is to change his last name to trump.

    Will he also pretend to ignore the reality of being about to be fired (impeached)?

  6. AA should just admit who they are. It’s an airline with a terrible coach product/experience, a good business class hard product and an airline with terrible flight attendants on long haul flights. own it and embrace it.

  7. Oh c’mon, America West was always known as America’s Worst and generally hated by the people in Phoenix who were locked into flying it. USAir/ US Airways/ whatever was a leftover airline that went through 4-5 transformations and flew planes with seats held together with duct tape, literally.
    Folks in Phoenix then said that USAir was the gods’ way of punishing them for complaining about America West. It couldn’t get worse? Oh yes it could, reproached the powers that be.
    When each of these disappeared, no love was lost among any of the parties involved.
    Parker has been running marginal operations as long as he has been around.
    Face it, his one goal has been to pay big dividends. To do that he has stripped back everything American once stood for.

  8. The American Video onboard says it all
    Because @ American we are going for great folks! Applause Applause
    And the CEO who is clearly delusional believes it all to be true
    He also sees his bottom feeder customers as those mere Executive Platinums
    as just some noise around the edges.
    to quote another great corporate philosopher

  9. The job of the National Mediation Board is to keep negotiations going not to settle the contract dispute. Having the board settle the dispute is unpopular with everyone and rarely happens. So unless the board has declared an impasse or the parties have requested interest arbitration, the ball is still in their court.

  10. @Scotch I will stay out of your dumpster fires if you will stay out of mine. Now if we can just stop Bastian from flicking matches into our dumpsters, we’ll be flying high.

  11. Sadly, this is what happens when a company has a CEO and CFO finance wonks running a “B2C” business. They have no clue that customers pay for their comp. Add to this a “blame everyone but themselves” mentality with no accountability and no executive leadership skills.

    They are the ones who bought a dog of a plane called the Max based on financials (as opposed to customer wants or engineering input). Own up to the mistake.

    You pissed off a key group of employees, make it right. Dont blame the govt mediation board.

    These guys have more excuses than…

    – longtime EXP who no avoids them if at all possible

  12. How could a CEO change the company to produce a product/service that customers would want, desire and pay for?

    This seems to be a question that Parker, Isom and the rest of the US Air Management Cancer cannot or will not answer.

    And for this reason, the company cannot compete. Parker loves throwing out excuses to justify a squalid product.

    How about doing something for the customers?

  13. Parker’s replacement should agree to binding arbitration with the mechanics, since AA is so sure that their position is so obviously correct that any neutral party would recognize it in a minute.

  14. To put it succinctly:
    No leadership skills. Blame everyone else for your ineptitude. Small airline mentality for one of the worlds largest. Inferior systems that cant keep up. Handcuffing employees who want nothing more than to deliver a superior product. Shoving systems down the throat of senior employees whom have yelled at the top of their lungs that wouldn’t work. Lack of foresight. Deaf ear to what the flying public (whom pays the paychecks) as well as the employees need and want! It isn’t just Parker. Parker, Isom, and the rest of the “senior management” have got to go and only then can American return to its place among the pantheon of great airlines! #nocoinfidence

  15. Doug Parker is driving their loyal customers to jump ship. In my case AA expired 225,000 award miles without warning. Now they are holding the miles ransom and want me to pay $1,250 to reinstate them. My life to date miles are 900,000. What on earth does Parker want to drive away good paying customers for!? That ransom fee was a slap in the face and the last straw.

  16. How does one contest a claim with customer service at AA when an unsatisfactory result is achieved by the frequent flyer customer? To whom should a further inquiry be made?

  17. I was an AA man but have been wavering for the past two years. Last week I flew a full Delta flight down and returned on a full JetBlue flight. I’ll just say you don’t really know how bad your crap stinks until you crap in someone else’s bathroom.
    My decision made, AA is not getting any more revenue from me if I can book somewhere else.

  18. If Doug Parker thinks the only thing wrong with American is delayed flights and cancellations, then he’s clearly delusional. The entire “customer experience” sucks…I’m an AA Executive Platinum and I fly frequently enough. If you’re not flying first class, and you’re in main cabin, the ever shrinking seat sucks, the lack of good food choices sucks, the lack of IFE sucks, lack of an extensive video collection sucks..overall American just sucks…it’s just not the flight delays or cancellations. I’ve complained to AA customer service and asked them to look at Delta as a role model

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