American Airlines management is under a lot of pressure right now, with most parties not being terribly happy, from employees, to customers, to shareholders. The company’s profits are greatly lagging those of competitors, and management doesn’t have a clear vision for fixing those issues.
A little over a week ago, the Association of Professional Flight Attendants (APFA), which represents American’s 25,000+ flight attendants, called on the removal of CEO Robert Isom. Now the Allied Pilots Association (APA), which represents American’s 16,000+ pilots, is also speaking out, though perhaps isn’t going quite as far as the other union.
In this post:
American pilot union has lost confidence in management
American’s pilot union has just published a letter that it sent to the American Airlines Group Board of Directors, to demand decisive action (thanks to JonNYC for flagging this). Here’s the latter:
The Allied Pilots Association Board of Directors, representing the more than 16,000 pilots of American Airlines, is writing to address the current operational environment, leadership approach, and long-term strategic direction of American Airlines. Our airline is on an underperforming path and has failed to define an identity or a strategy to correct course.
This assessment is not the result of a single interaction with management, an isolated operational disruption, or an individual earnings report; it is the result of persistent patterns of operational, cultural, and strategic shortcomings. Copying competitors’ initiatives and reactive repairs to the mistakes of the past is not a strategy to a future that closes the gap between American and our premium competitors, Delta Air Lines and United Airlines.
For more than a year, APA has voiced concerns regarding management’s ability to turn the corner. Management has been given repeated opportunities to articulate a credible strategy and demonstrate measurable improvement. Those opportunities have passed without meaningful change. Despite repeated assurances, the operation continues to struggle under predictable stressors, exposing systemic weaknesses in preparation, execution, and decision making. These consequences are shouldered by our customers and employees every day.
These failures have negatively impacted the financial performance of our company and frustrated all stakeholders, to include shareholders, for far too long. While our premium competitors’ market capitalization has soared, American’s has soured. As their free cash flow is sustained and growing, ours is inconsistent and stumbles. As our competitors drive and arrive at investment-grade balance sheets, management’s miscalculations leave American trailing in that investment-grade effort as well. Management self-lauds their proclaimed industry leading “efficiency,” yet they fail to fully monetize the assets under their charge and leave us in a revenue trailing position compared to Delta and United.
As Directors, you are the fiduciaries of this organization and are charged with oversight, not optimism. American is no longer best in class financially, operationally, or in customer service. The pilots of American want our company to win and dominate the competition, not just survive and compete. Our careers are intrinsically tied to the fate and performance of this once-great airline.
Our members have been clear and consistent in their expectations regarding these issues and have lost confidence in management’s ability to correct course. We are not interested in symbolic gestures. We need decisive action. We require leaders who are willing, equipped, and empowered to get the house in order. Leadership must change the culture of this airline, define American’s business identity, develop a strategy to not just improve but to outperform our competitors, and restore pride across the organization. Anything less will result in the continued deterioration of the American Airlines brand.
We are prepared to explore these topics in greater detail. We respectfully request that APA President Nick Silva be afforded the opportunity to formally present our concerns to the AA Board of Directors. The pilots of American Airlines stand ready to support a future built on results, accountability, operational excellence, service to our customers, and respect for the frontline leaders who make this airline run.
The union has also published a video from the head of APA, discussing the letter and demands.
My take on the letter from American’s pilot union
I’ve gotta give the union credit here, as this letter is very well written. It’s not overly dramatic, and for that matter, it doesn’t even explicitly call on management change, or the ouster of the CEO (unlike the letter from the flight attendant union). At the same time, it sort of infers that this is the only possible outcome for change.
I am in complete agreement with the union here — I’ve shared my take, so I won’t repeat myself (you’re welcome!). I understand the board at American Airlines Group has just generally been asleep for the past decade, so I’m curious if they finally take action.
Change is inevitable, it’s just a question of whether it happens sooner or later… there has never been a better time for the board to pick up the phone and call Ben Smith (which isn’t to say he’s interested, but…)
Bottom line
American Airlines pilots are the latest labor group to demand change from management. The union isn’t going so far as to specifically demand the CEO be fired, but is instead saying that members have”lost confidence in management’s ability to correct course.”
I think most reasonable people will agree with the union’s take, so I hope this pressure continues…
What do you make of this letter to the board from American’s pilot union?
Feels like mid 2000s United over at AA. Good luck shareholders.
The best thing that AA could do for their customers would be to immediately lay off half their flight attendants.
"American is no longer best in class financially, operationally, or in customer service." I suspect that at least one of these were true, at one point in time. However, how many people presently working at AA would remember this time? While I can certainly appreciate and identify with the pilots' frustration, ain't no way I am flying AA on anything but a redemption and not longer than a 6-hour one-way rental car drive from home for the foreseeable future.
the question is why have they been quiet so long??? I guess they published it now because finally there is a huge tide against the CEO now, otherwise it seems like the pilots were not brave to voice it out. Anyway, here is the board members, I wonder what they have been thinking so long:
https://www.aa.com/i18n/customer-service/about-us/corporate-governance.jsp
Ken, thank you for including the link.
After reading the education qualifications of those responsible for corporate governance, their faults are so obvious to behold …. too many are handicapped by the MBA (Management Brainwashing Attendee) disqualification.
it doesn't infer anything - it implies. come on
Absolutely Tim, Ben, is guilty of the misuse of the correct English word ‘Implies’ in his article.
If fired by the Board, the CEO receives $23.5 million. Directors are compensated. The amount of compensation is in the range of $250,000 annually. One would expect they could, for that level of compensation, make difficult decisions. Some Directors are CEOs themselves, however, so firing a fellow CEO might be a difficult call.
Firing the CEO is not always the only answer, and frequently doesn't help. Corporate rot rarely stops at the CEO and direct reports, but goes significantly deeper into an organization, more than a CEO can replace. There is too much institutional knowledge to replace them all. Still, the board should take up the offer from the pilots. Hopefully it isn't just a suggestion to buy more wide-bodies so narrow body pilots can get promoted.
The...
Firing the CEO is not always the only answer, and frequently doesn't help. Corporate rot rarely stops at the CEO and direct reports, but goes significantly deeper into an organization, more than a CEO can replace. There is too much institutional knowledge to replace them all. Still, the board should take up the offer from the pilots. Hopefully it isn't just a suggestion to buy more wide-bodies so narrow body pilots can get promoted.
The front line employees are more likely to know what's wrong. Meeting with their unions to get tips on changes which would make operations better for customers could help, as long as the unions don't just bring self-serving requests on their pay or working conditions.
But, none of these actions need a new CEO, just a board who supports the CEO in meeting with these teams and implementing corrective plans. Seeing new directions implemented based on employee input makes the employees feel valued, and start to care more about their jobs.
Time to Call Ben Smith over at Air France
Surely Richard, a move from AF to AA for Ben Smith, would be like asking step back three decades of aviation business practices.
Surely Richard, a move from AF to AA for Ben Smith, would be like asking step back three decades of aviation business practices.
The crews really deserve better.
Their former loyal customers deserve better. too. Im not sure exactly what caused us to dump AA, but after a decade of AA EXP, we haven't intentionally credited a single flight to AA for 6 years, despite being a whisker from 3 MM. It is sad. It would be great to have the old AA back.
Come to think of it, maybe it was the steepening of qualification requirements for lower statuses that pushed...
Their former loyal customers deserve better. too. Im not sure exactly what caused us to dump AA, but after a decade of AA EXP, we haven't intentionally credited a single flight to AA for 6 years, despite being a whisker from 3 MM. It is sad. It would be great to have the old AA back.
Come to think of it, maybe it was the steepening of qualification requirements for lower statuses that pushed us away permanently. While we should have been on the precipice of LT PP if their LT program didnt suck so bad, we were instead told that we would have to pay more for the privilege of regaining EXP. That insult plus the complete inability to confirm SWUs on international flights in advance is likely what ended our relationship. Of course, let's not forge constant delays, crappy hubs, attitude from employees, absurd phone wait times, nasty food, ripping out seatback entertainment...There are so many things that AA sucks at, that it is hard to make a thorough list.
Some do. Some don’t. Flew MIA-GRU yesterday in F and had two rock stars flight attendants up front. I went to the 1R door restroom, and when I got out, the galley was blocked because one of the pilots was using the other restroom up front. The FA politely asked me if I’d mind circling back through the BC galley to return to my seat (2A). As soon as I set foot in the BC...
Some do. Some don’t. Flew MIA-GRU yesterday in F and had two rock stars flight attendants up front. I went to the 1R door restroom, and when I got out, the galley was blocked because one of the pilots was using the other restroom up front. The FA politely asked me if I’d mind circling back through the BC galley to return to my seat (2A). As soon as I set foot in the BC galley, another FA barked at me: “what are you doing ? This is a galley.” I told her that her colleague instructed me to go through there, to which she barked again: “I don’t care.” So yeah, some deserve better. Some deserve exactly what they got.
Gene, your observation is similar to my experiences. Good, Bad, and Ugly - often on the same flight. Two years ago, I flew BIS-DFW on Envoy/Eagle - E175. I was up in FC. The FC lavatory was inoperable, so all we had was the rear lavatory. On a 2 1/2-hour flight, it's entirely possible that some passengers in first, and particularly with an attentive FA on drinks, would need to come back to use the...
Gene, your observation is similar to my experiences. Good, Bad, and Ugly - often on the same flight. Two years ago, I flew BIS-DFW on Envoy/Eagle - E175. I was up in FC. The FC lavatory was inoperable, so all we had was the rear lavatory. On a 2 1/2-hour flight, it's entirely possible that some passengers in first, and particularly with an attentive FA on drinks, would need to come back to use the only working lavatory. As a result, a short, but well-behaved line (2 people) formed in the rear galley. What were we all to do, stay in our seats and walk back to check if the rear lavatory didn't have a line? Well, the rear FA would have none of this. "They don't pay me enough for this! Get OUT OF MY GALLEY!" It would be noted that she was not engaged in any service at that time, just goofing off in her jump seat. Yeah, that's AA.