American Airlines hasn’t been perfect, but it’s charted a path different from United and even Delta through the pandemic. They’ve generally honored refunds for cancelled flights, rather than choosing to illegally conserve cash the way United and others have attempted to do, and they’re plotting a course to avoid employee furloughs.
United Airlines already has 30% force reduction targets and plans to notify employees in July that their services are no longer required come October. American has told employees they’re trying to manage through this with voluntary early retirements and leaves and hiring freezes. United’s sole objective is to conserve cash.
I’m not sure that Doug Parker is going to get credit for being better, and he needs to for the gambit to pay off. He’s managed to avoid his board ousting him numerous times despite alienating employees, shareholders, customers, and partner airlines.
Now he’s charting a different path than United which appears to be privileging shareholders (though the two stocks are roughly down the same amount in percentage terms since the start of the pandemic, though American’s off a much lower base).
To be sure American has reduced employee hours and made a negative change to AAdvantage but not nearly to the extent that United has gone after both employees and customers. They do seem to be doing something differently, they just need to tell that story and do it in a way that constituencies can rally behind.
What American needs isn’t just to save employee jobs and not to alienate customers, they need to capture employee and customer loyalty for the moves. If they succeed they need employees to appreciate that folks at other airlines are losing their jobs but they are not, and they need customers to appreciate that they aren’t seeing the loyalty program being gutted before their very eyes.
Employees need to be loyal and inspired and feel they’re on a shared mission, and turn that shared mission into a strong operation that is focused on the customer. Customers need to value the way they are being treated, by management now and by employees later.
Doug Parker needs to make the case that what he’s doing is different – and puts himself at personal risk for the long-term health of the company and its people.
Parker needs to make the case that:
- How the company treats employees and customers is the future of the airline
- That he’s putting his own job at risk charting this course while other airlines lay off staff and steal from customers – he is risking the wrath of investors, and the board, by maintaining higher cash burn than competitors.
- That if the airline makes it through they’re going to have a lot of debt and a deep hole to climb out from
- American Airlines will be the underdog and needs to pull together
- That means everyone takes great care of customers and puts customers at the center of everything they do, to win the business that will prove this was the right thing to do
American hasn’t had a mission or a purpose to offer employees bigger than themselves. Just saving jobs will quickly be forgotten, and doing right by customers will quickly be forgotten, without a narrative for the airline that brings everyone together.
There’s no better opportunity to do this than now, with the airline in bits and pieces charting its own course. They can bring the story together, lay it out as a mission, and make clear that the CEO is leading from in front with his own job on the line to do things differently. With this core purpose to rally around, and a CEO who leads, if the strategy ends up succeeding they’ll have a company culture that sets the airline apart and gives them an opportunity to really succeed and earn a revenue premium in the future.
Thanks Gary. Good commentary. As a business owner who has about $30K in “stolen” airline refunds still due to our small company, I relate to what you have said. We also had to jump through hoops to get refunds from UA and DL, while having a smoother experience getting AA refunds. As a result of all of this, I’ve been thinking our business will try to spend our future travel monies on AA as much as possible. I hope AA can tell its story and convince other customers to think like me.
I’m ex-IATA and actually know very well, and personally like, most of its team leading the industry response on refunds. I think they are off their rockers on this one.
A great feel-good story.
It will be moot if AA continues to offer a crappy product that doesn’t arrive on time.
I have had to fly during this time (family illness) and AA has been great. Last year was a mess but generally, I got to were I was going, just not always on time, but even before the crisis, AA was massively improved on the ground and in the air (except PHL gate agents who just should be fired). I see this crisis bringing out the AA that Kirby wouldn’t allow and personally, Parker has done a much better job reaching out to employees and passengers (he’s been flying the system) than DL or UA for sure.
I see AA coming out of this as a new leader (don’t start about Oasis. . .DL has 30 inch pitch too in economy and personally, their FA have become snotty ). I wish all the airlines to recover, but I see a few AA especially, coming out as a better carrier with a better network and global partners in the long run.
Frankly I am not so sure Parker is capable to doing what you suggest. Look at Anderson and his tenure at Delta much like Parkers controversial at best. Anderson’s replacement has been doing a great job of getting out there ahead of many of the issues, “calmed” down the rhetoric coming out of Atlanta, and got about running an airline. As a long time FF Alaska flyer there is some bitterness left from Anderson’s tenure I have flown Delta a bit was hey nice job.
Bottom line is Parker capable NO much like Anderson he needs to leave. And oh by the way Amtrak fired Anderson.
This will suffice: “Thank you for all of your hard work. Effective immediately I am no longer the CEO of American Airlines. Have a nice day.”
Last summer, My wife and I flew round trip to Hawaii on a competing airline, and last spring we did the same to the western US and back. Both choices because AA did not seem to value non-elite flyers. We experienced good service on the competition, even though the flights were not direct. Late last year we bought round trip seats DFW to LHR for a cruise which was originally scheduled for late May. Of course the cruise was canx. I applied to AA for a refund and expected since I no longer fly as much as I did before I retired, the refund (to a non-elite flyer) would be denied. Within a week I received the refund (for two premium economy seats). Based on what I’m seeing from other airlines AA has regained my business.
Did I read at one point that AA was offering an extra 20% credit if you left your flight funds on deposit with them as opposed to taking a refund? I fly to Hawaii quite often and did propose to HAL that they offer an extra credit for allow ing them to keep my payment on 4 flights already booked. They did not reply but I received a very quick refund.
American Airlines is the absolute worst company that I have ever dealt with.
EXCELLENT point, Gary. This reminds me of a few years ago when they gave the employees raises but didn’t do so in the course of contract negotiations. The messaging here is the key. Culture, which has been sorely lacking at AA for a few years now, could totally be created by the good recent moves made by management. Employees can be proud to work for AA, customers should feel like the airline is there for them, and even shareholders can appreciate a positive spin about the future of the viability of the airline and their investment.
PR for AA needs to jump on this, and jump on this NOW.
I’m sorry, but Oasis is still a show stopper for me. Just look at the picture below the article: “American’s new domestic product is so bad their CEO won’t fly it” and look at the ghetto seatbacks, combined with the pitch and lavatory.
They need to decide if they want to be a low cost carrier or a premium carrier (and this includes the service their employees provide).
Sorry, but I also have a problem that they are also burning through cash to retrofit planes to Oasis after taking taxpayer money (and about to ask for more).
When I return to travel I’m going to take a fresh look at all of the alternatives, and product and service will be at the top of my list.
Ditto, AA did right by me to refund over $1K with little trouble.
Most of that was for a flight that I originally booked for my family, then got changed 3+ hours (flying with a 3 and 1 year old is better for everyone at 10:30 rather than 7:00 AM). I apparently changed seats and that was an “affirmative” flight acceptance (but the only flight that day), so when I tried the online refund system, I didn’t automatically qualify. I still submitted a manual claim and it got approved within a day, back on my CC a few days later.
I had a UA flight for like $250 I had to wait on (thanks for the advice Gary!), and they did cancel/rebook on a connecting flight. I must have got a good UA agent because my refund was approved with little trouble and pretty quick. But the bad stories are terrible and numerous.
I feel for UA employees because most of the bad decisions are at the top), most of the employees are stuck adjudicating decisions from on high. I hope UA continues to lose a ton of business (did I read correctly that Kirby will soon be CEO?! He’s the worst/most self-deluded!), just enough to finally change. Glad my company’s policy is AA preferred.
I have to say I’ve been flying with AA many years and need to reply to a comment stated previously that a Agent in PHL should be FIRED I definitely AGREE .
I live on East Coast and have been flying to west coast during this pandemic and AA has been so good to us
Until I hit the PHL airport never had the rudest customer service. Very Disappointed
I am a American employee of over 25 years…i give mr Parker all the credit in the world rite now…hes doing a great job and doing all he can in these horrible times…once we get thru this virus….AND WE WILL….Americans employees will be the best most loyal of any airline ..
American airlines did a fab job when I applied for my refund 12000 USD worth of ticket refunded in 15 minutes without any hassle..and agent was brilliant..she initiated the refunds while I was on call . I am not even their Premium Pax .So much respect to AA .And I will give my future company business to them .
Good job Mr Parker
I would like to salute American Airlines for protecting their employees and taking care of their customers by putting them first. So many companies have let their employees go without any regard to how they would survive. I have a daughter and son n law that work for American and I am so grateful they are both still employed. These are very hard times for everyone and so many people are suffering great losses, but American truely makes a statement that they genuinely care about their people. They are definitely a great company.
I truly believe American violated the spirit of the CARES Act. I was notified on 6/30 and my last day to work was 7/10. I was not given a severance after 20 ;years of service but rather was paid by CARES Act funds which the act was supposed to preserve jobs not use this in lieu of severance. Just shows you how unethical Parker and Co really are to save a buck.