This week I read two different pieces with very similar titles that talked about the restructuring happening within the management of American Airlines:
- American Rearranges the Deck Chairs – Cranky Flier
- Re-arranging the Deck Chairs of American Airlines Management – View from the Wing
Now, I don’t claim to know a whole lot about airline management, corporate management, or the details of what happens within the C-suite or SVP level of any company. But I found both of these analyses interesting, and both concluded that the changes were more window dressing than any fundamental shift. Given American’s terrible operations this summer, a more substantial change seems in order.
There was also one interesting observation that bears reiterating.
American Airlines Has No Anything of Loyalty
This stood out to me. The current SVP of Marketing, Loyalty, and Sales is being moved to the SVP of Customer Experience. “Loyalty” disappears entirely, and so does the word “Marketing”. According to the Cranky Flier, both the marketing and loyalty teams will still be reporting to Kurt Stache, the new SVP of Customer Experience. Even the folks with “Customer Experience” in their title are awkwardly split in the new organizational chart tree.
I find it funny that American, an airline that has had a loyal following for years, apparently no longer considers loyalty important enough to have the attention of any senior vice president. I’m sure it wasn’t a truly intentional change to purge the title from the SVP lineup. But it is rather telling of where loyalty management falls on American’s list of priorities.
American’s Changes May Not Be Enough
The tide might be turning at American, but not because of any of these changes. They posted their best month of on-time performance in two years in September after an absolutely abysmal summer. Plagued by the 737MAX grounding and a spat with their mechanics union, things may finally be looking up for the world’s largest airline. We’ll see how long I consider them the country’s worst airline.
But this does not mean that they aren’t in need of a change in leadership and/or direction. It’s crazy to me that American has a market cap of just $12.2 billion, compared to the $34.2 billion valuation of Delta Air Lines. American has slid significantly from their max of $38 billion in early 2015.
I’ve read all about the upset customers. If I was a shareholder, I’d also be more than a little upset. I’d also hate to be the VP of Alliances and Partnerships right now, given the situation with LATAM.
Nobody cares about your loyalty, least of all airlines and hotels. It’s all about the money – period.
United is proving this to be 100% true with their recent overhaul of how you earn Premier status. I would not be surprised if AA follows in their footsteps for calendar year 2021.
I have to disagree with your opinion that American Airlines is the worst major airline. British Airways tops my list for International flights. We are frequent fliers and prefer American, but unfortunately BA is one of their partner airlines. Three times we booked American and got stuck on BA. All three times they have lost one or two pieces of our check in luggage. Taking from three to seven days to locate our luggage. Additionally, all three flights were on 747’s that I’m guessing were at least 20 years old. Their Premium Coach’s leg room was worse then basic on American.The food was terrible, the fold down trays were broken, bowing in the middle (had to use our knee’s to make the tray flat), the seat back entertainment screens were maybe 5×6 and my headphones jack wouldn’t stay in. Broken bathrooms, ran out of toilet paper, ice and diet drinks. Need I go on? Also, filled out customer survey’s, emailed and called in an attempt to contact management and never heard back.
I guess I should caveat that and say worst major *U.S.* airline. I’ve heard horror stories about a handful of international airlines, including BA. But many are also far better than our domestic carriers.
Funny. BA also failed to place my luggage on a connecting flight this past week. Fortunately, I was heading home. My luggage arrived the next day. Terrible airline. Will never fly them again.
This can all be laid at the feet of the board of directors. They have consistently chosen to keep a CEO who did just fine at America West, but is completely out of his depth at AA. A new board is desperately needed. Then they can anoint a new, hopefully capable, CEO. With even average brains, this new CEO will realize that destroying AAdvantage, the best feature of the company, which is also the only profitable part, might just be a bad idea. Instead, by making AAdvantage more valuable rather than less, the company gains loyal customers and money. Happy customers equals more business equals more money. Unless you’re in top management at AA, it’s not complicated.
The need for “new blood” in the two linked articles is so true. Given the track record of the past few years, they really should give someone else the reins.
When Doug Parker said he wanted fortress hubs, what did y’all think he meant? The people who fly AA are people forced to fly AA. Doug Parker has no need to pay for loyalty at a fortress hub.
Thank your know-it-all government overlords for allowing all these mergers.
It should be no surprise that Charlotte and Dallas are the most profitable!