American Airlines chooses leadership continuity despite underperformance
Tuesday’s news that American Airlines CEO Doug Parker will step down on March 31 and be succeeded by his deputy, Robert Isom, was hailed by American for the continuity it will bring.
But is leadership continuity what the airline needs right now?
Bob Mann, owner of the consulting firm R.W. Mann & Co., indicated that American’s customers, employees and investors would be better served by new leadership.
Mann said the Isom succession plan “evidences a board of directors that conducts little oversight, continuing to ignore the operational, financial and labor-relation realities that made American last among network airlines for years prior to the pandemic.”
Isom will face a tall task when he takes over the carrier in April. In the years leading up to the Covid-19 pandemic, American underperformed its primary rivals Delta and United financially. American’s $38.5 billion in debt is the highest among the Big 3.
Mann characterized the selection of Isom as evidence that American Airlines investors have no voice.
Brett Snyder, who writes the Cranky Flier blog, offered a more cautious appraisal of the move. American, he said, telegraphed the succession plan in 2016, when the company pushed out president Scott Kirby, who is now the United Airlines CEO, and replaced him with Isom.
“We need to see if there’s a stamp that Robert wants to put on the company that he hasn’t been able to do up to now. But he’s been president for some time,” Snyder said.
He noted that Isom will have to deal with a variety of difficulties, ranging from high costs to labor discontent.
“The idea that new blood could be beneficial for a company in a position like that is something that some people have suggested,” Snyder said.
With his retirement, Parker, 60, will end a 20-year run as CEO of a U.S. airline. He was named America West CEO in 2001 and took over leadership at US Airways in 2005 after that carrier’s merger with America West. Parker became American CEO in 2013 as part of the US Airways/American merger.
Parker will stay on at American as board chairman.
Isom, 58, has been American’s president since 2016, overseeing operations, planning, marketing, sales, alliances and pricing. He has worked alongside Parker for two decades at American, US Airways and America West.
“Were it not for the pandemic, this transition would likely have occurred even sooner,” Parker said in a Tuesday video message.
Board member John Cahill stressed leadership continuity in a Tuesday statement.
“Today’s announcement represents the culmination of a thoughtful and well-crafted succession planning process,” he said. “Robert is an excellent team builder who has worked to bring people together throughout his career. He is the right leader to carry American forward into its next period of growth.”
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