American Airlines Announces Leadership Changes

Filed Under: American

American Airlines has today announced some significant leadership changes. At first I was excited about this because I (and many others) think American needs a new direction and a new CEO, and there have been rumors of these changes being imminent. Well, unfortunately there aren’t any changes at the very top.

So, what’s changing?

American’s SVP Of Customer Experience Is Retiring

To start, American’s SVP of Customer Experience, Kerry Philipovitch, will be leaving the airline at the end of 2019. This is part of a long-planned desire on her part to move to a new phase of life, so this doesn’t come out of left field or as a surprise.

I have to be honest, I haven’t heard a whole lot about Philipovitch, either positive or negative. She has been at the airline a long time. I don’t think she’s to blame for American’s lackluster customer experience (I think the direction is decided on at a higher level), though I also feel like American could use some new blood in that department.

American Airlines President Robert Isom said the following about Philipovitch:

“Kerry is one of the very best leaders I have had the privilege of working with. She is a great advisor, consummate team player and champion of those we serve inside and outside the company. She led the industry’s largest reservations system cutover and has been at the helm of numerous efficiency projects critical to our integration. American is far better because of Kerry’s contributions, including her work to promote passengers’ rights, support our diversity and inclusion initiatives, and launch innovative customer service training for team members. We will miss her, but Kerry has more than earned the right to do what is best for her and her family. Thankfully she has trained a stellar group of leaders who will carry on her legacy to drive operational excellence with the utmost care for our team.”

American Realigning Operations & Commercial Teams

With this change, American is also taking the opportunity to realign their operations and commercial teams around four key pillars of business — operations, network, revenue, and customer. Currently they don’t have such a “clean” structure.

As Isom describes these changes:

“This is an opportunity to sharpen our focus on the key parts of our airline: running a reliable operation, expanding the world’s best network, maximizing all aspects of revenue to ensure American thrives forever, and delivering a superior customer journey as we create a world-class customer experience. This restructure puts innovative and extremely capable leaders at the forefront of these initiatives.”

Best network in the world? Making sure American thrives forever? Delivering a superior customer journey? Creating a world-class customer experience? That’s a tall order if I’ve ever seen one…

With that, the following four leaders will assume responsibilities for these teams:

David Seymour, Senior Vice President of Operations

Seymour is currently SVP of Operations, and will maintain that role. As it’s described, the goal is to move past integrating operations, and focus on “operational excellence.”

Vasu Raja, Senior Vice President Of Network Strategy

Raja is currently VP of Network Planning, and is being promoted to SVP with more responsibilities. So he’ll not only be responsible for American’s route network (as before), but he’ll also oversee alliances and partnerships.

The closer connection between network strategy and alliances and partnerships makes perfect sense, and could lead to some interesting routes.

Don Casey, Senior Vice President Of Revenue

Casey is currently SVP of Revenue Management, so I guess they’re making that broader to encompass more aspects of the airline. He will oversee revenue, and the way this is described, the new structure will lead to “responding to the ever-changing market needs of American’s customers.” You know, our needs like basic economy and stuff like that.

Kurt Stache, Senior Vice President Of Customer Experience

Stache is currently SVP of Marketing, Loyalty, and Sales, and will be transitioning to customer experience, so he is taking over Philipovitch’s role. Jill Surdek is also being promoted to SVP of Flight Service.

It’s an interesting decision to put someone in charge of loyalty, marketing, and sales, in charge of customer experience…

What About Doug Parker?

On the surface this change in management seems logical, and hopefully it will create a more cohesive structure. For example, it makes perfect sense that network planning works closely with partnerships.

Of course shuffling around job titles only does so much, and actions speak louder than words. We’re hearing about how the airline is now moving past the integration phase, which I feel like should have happened a while back.

What American really needs is a new CEO. It’s not that the CEO singlehandedly determines the success of the airline, but just about everyone has lost faith in Parker, and a fresh start would go a long way.

With that in mind, I’m not sure what exactly to make of this announcement as it relates to Parker:

  • On the one hand, I’d assume that if they were going to radically change their corporate structure, the departure of the CEO would be part of that
  • On the other hand, I guess maybe not, because seeing that much change at once may concern investors; so it could be that this is phase one, and phase two is Parker leaving

It’s also interesting to note that Parker isn’t once mentioned in the press release. That’s not necessarily unusual (since all of these executives report to Isom), but is interesting nonetheless.

I’m curious what you guys make of this announcement — is this a sign of an even bigger shakeup in American management, or is this Parker & Co. trying to buy themselves time by trying to restructure things a bit?

Comments
  1. Being the cynic I am about Parker this maybe a smoke screen in an attempt to calm the calls for his departures. But as you so aptly state AA needs a new CEO to inject new energy into the operations but then so does UA. Like the NFL fresh young hard charging coaches are making their impact on the teams that have hired them maybe AA and UA needs to look around for some a newer generation leader because rehashing long time executives aren’t getting it done. I can speak to this as I am transitioning out of my company which my business partner and I founded 30 years ago, at some point the time comes.

  2. They are probably just trying to gauge the satisfaction response from analysts with this deck chair reshuffling to see if more is going to be needed (Hint/Spoiler: Yes, most definitely yes) to please them.

  3. First off I cannot be the only one who saw the headline and got excited only to be compeltely let down. After the earlier rumors it finally seemed as though the BOD had woke up to reality, sadly that seems not to be the case.

    I do take objection to this part “I don’t think she’s to blame for American’s lackluster customer experience (I think the direction is decided on at a higher level), though I also feel like American could use some new blood in that department.”

    If you’re the SVP for Customer Experience you own the customer experience, there’s no higher level w/r/t to Customer Experience in the company and either the person in that role is ineffective driving improvement or is content with the current “experience” that is flying AA. Either way they are responsible, Doug might suck but it doesn’t mean everyone below him should get a pass.

  4. Don Casey as SVP of Revenue Management is laughable. The guy has no leadership or technical skills and under his “vision”, AA has been pricing Business Class over 8 times more expensive than First Class on some flights–mistakes that only takes AA 2-3 months to correct at times. Being a supreme underachiever must be the only requirement AA has for its SVPs. Then again, when the CEO is an alcoholic, don’t expect an award-winning C Suite under him.

  5. “It’s an interesting decision to put someone in charge of loyalty, marketing, and sales, in charge of customer experience…”

    Why? All of those things add up to the customer’s experience.

  6. More of the same to come. They will continue to worsen the experience flying.

    AA needs to stop the focus on becoming a Frontier or Spirit domestically. If they could get a true vision and not just poorly copy what Delta does they could become a leader. That isn’t happening under Doug Parker’s leadership.

    They also need to cancel Project Oasis. This more seats on the plane with less space only makes me want to fly them LESS.

  7. Instead of post after post on American, why don’t you and other blogs spend more time posting on how to maximize MileagePlus and SkyMiles. The coverage of American Airlines is very disproportionate.

  8. Stock reaction is basically zero. Tells you just about all you need to know. Investors would adjust their earnings forecasts up, and subsequently bid up the stock price, if they thought these changes would meaningfully impact the airline’s earnings.

  9. Do you really think that that many people know enough about any of these people to actually make substantive comments about any of them or their abilities? All speculation/ supposition based on one’s perceptions and experiences with the company rather than an objective/ detailed assessment of the individual’s skill sets and talents. Which means this is all just fluff.

  10. Why is this news? Unless Parker is negotiating a golden parachute exit package, these job shifts are inconsequential. Maybe the other shoe will fall but I wouldn’t count on it.

  11. Wouldn’t reorganize if the CEO was leaving. You’d save the structure for the new CEO.

    Glad to see about Vasu. He wouldn’t have lost LATAM. Hopefully, he will push the rebuilding of the Qatar relationship.

    Who had alliances?

  12. It would benefit parker financially if he stepped down. He was going to retire in 2016 but something happened, for some reason he decided to stay and inform kirby he had to transition out of AA. Isom have anything to do with this? It makes sense for parker to stay another 4 years. 1) he appointment himself chairman of the B.O.D and he’s also the CEO. 2) he took himself off the AA payroll and is compensated by shares of the company. 3) he increases debt and bought back 15 billion in shares (helping EPS). 4) he’s been buying alot of his own shares and is the biggest individual share holder of the company. If they bring in a new CEO (not isom) and the shares go to $45 or $60 like they probably should be with a well run airline, he will make alot of money. The cost cutting way to run an airline is so 15 years ago. AA needs a new direction that fits into the 2020 age.

  13. TO LAXJEFF
    You are so RIGHT! It is bad enough now! That will really make passengers want to fly AA. So sad what has become of AMERICAN!
    They used to be the carrier that was rated number 1 back in the day with the Silver aircraft. They could be again if they would change some practices AND get rid of current CEO!

  14. @Abidjan Doesn’t make sense with the amount of 787 they have in the fleet now. It is made of another non-metallic material and therefore would look different.

  15. Cannot, planes these days have less and less aluminum.
    Now, if you want to paint it back to look metallic, depending on frames, that is 500kg to a 1 ton in additional weight to pay to fly around just to please some nostalgics.

  16. Was a status aa customer for many many years and after continuous devaluing of my loyalty, miles, and all around comfort I refuse to fly them unless faced with no alternative. Only 300k more miles to redeem before I’m done with them forever. Should have never allowed them to merge with usair.

  17. “four key pillars of business — operations, network, revenue, and customer”
    Notice which is last? The customer!

  18. If Parker and the rest of Team Tempe aren’t forced to go with him, nothing is going to change. This AW/USAir mgmt team got rid of AA mgmt and now finds themselves at a loss on how to run an operation the size of American. Their business model on every front is an epic failure. They love to “promote” their people into positions they are woefully unqualified for. This is an exercise in futility unless they all go (as soon as humanly possible)

  19. There is absolutely no incentive for employees to do anything beyond the minimum. What for?
    Get rid of DP. Give the mechanics a fair contract. (Id personally rather see aircraft serviced here in the USA than in South America where a guy can’t read English or a schematic.) Give employees a reason to care.

  20. @Keith… When AA says “customer”, they refer to the source of revenue. As in, how to gouge the customer for every stinkin’ nickel. They have no interest in your “experience”, only your money

  21. I agree with JimA; this group is a money grubbing bunch of very poor managers! If you were a better airline (like you used to be before you followed United and Delta down the toilet!) then you would have more and more loyal customers instead of a bunch of us who now detest you! Doug Parker, you bear much of the blame!

  22. An organisation takes on the characteristics of its CEO. All those who love Parker’s CEO characteristics raise your hand.

  23. AA has never been the poster child of customer service. Parker is taking the airline in the right direction. The new fleet he is building will equate to billions in fuel savings. People under him is a different story. Technology is a mess. Starting by the cio that is a computer illiterate woman. Agents at the airports are treated like s**t. Just ask one next time you fly. Every one at AA is looking to jump ship. They have a large campus in Phoenix. Flights to Dallas are half filled with employees. Do they quantify those unsold seats? Maybe Parker and the other ones under him should go to bring a fresh start. USAir had the east coast market. AA killed it. AA does not fly out of LGA on saturday. Yes, AA just ignores the largest city in the USA. I would be surprised if Parker micro manages flights.

  24. @ghostrider5408 — “… AA needs a new CEO to inject new energy into the operations but then so does UA. … maybe AA and UA needs to look around for some a newer generation leader because rehashing long time executives aren’t getting it done.”

    Why are you lumping UA into this? What *specific* gripes do you have against UA, when comparing to AA? UA has been very proactive in its improvements, as compared to AA, which gets endless complaints from everyone on this site and elsewhere!

    Furthermore, everyone knows that UA *totally owns* the USA-based trans-Pacific markets, as compared to the rest of the Big 3, and will continue to do so into the foreseeable future!

  25. @Anthony — “Instead of post after post on American, why don’t you and other blogs spend more time posting on how to maximize MileagePlus and SkyMiles. The coverage of American Airlines is very disproportionate.”

    Uh … the *first* story of today’s (this) edition of OMAAT is called “Stack Promos To Buy United Miles For 1.47 Cents Each,” so go check it out at

    https://onemileatatime.com/stack-promos-united-miles/

  26. As an EXP calling the dedicated number, I just waited 25 minutes to get help to reinstate miles from a canceled booking (which should be doable online but isn’t). I wonder how long it takes their less-loyal customers to get through? Not the way to run customer service.

  27. DUI Dougie is buying time… Every airline has gone through labor issues but AA continues to tank. It’s going to get worse before it gets better…

  28. I have been a loyal AAdvantage Elite member for 35 years and this team, who are all existing insiders, have led to disappointment after disappointment in the last few years. The only things they have been getting right are vastly improving their fleet and seats on long haul flights and improving the Admiral’s club lounges.

    Domestic flights (except on the 3 class transcon 321) are going down hill while pricing is going up. I fly to Miami fairly often from LA and their baseline 321 First Class service isn’t worth the money. Barely better than Main Cabin Extra and pulling the screens from more and more planes while WiFi service is still deficient is a mistake.

    Another writer got it right. Customer should come first not last on this list if you want to retain loyalty and as of late the way AA has been treating long-term loyalists like me is poor. I can never find mileage upgrades on flights anymore even 6 to 9 months out, domestic or international, MileSaver Business class seats are virtually never made available, and the cost of business class flights to many destinations, especially South America, are way out of line. With LATAM leaving the alliance you’d think American would lower ( not raise) prices to Chile…. but no. On a recent check of fares to LAX to Santiago, I could fly on Aeromexico’s brand new 787 via Mexico City for1/2 the ticket price that AA was offering. And with LATAM and Alaska gone there are fewer and fewer reasons for me to remain in Aadvantage/OneWorld.

    The one thing in customer experience that has improved are the Admiral’s Club lounges. I appreciate those improvements and the upscale BA lounges, but AA needs to make it more worthwhile for their elite customers instead of cutting and cutting benefits.

  29. When you merge 2 mediocre airlines who were both already on a downward spiral of contempt and despair, did anyone really expect anything else? I will fly Spirit before AA at this point…..

  30. Having spent 5+ hours talking to & drinking with Doug on a flight I can confidently say if anyone charm/talk his way out of an impending forced exit, it’s this CEO.

    –JRL

  31. @Bobo — “… I just waited 25 minutes to get help to reinstate miles from a canceled booking (which should be doable online but isn’t).”

    You mean that such reinstatement isn’t done *automatically*? As far as I recall, this was done automatically for me with United!

  32. This organisation must be unhealthily flabby to have so many Senior Vice Presidents (are there Junior ones?). Wouldn’t it be more meaningful to deflate these titles to Managers, and have these people actually manage their patch? Meaningless titles are so passé these days and reflect poorly on any business struggling to survive in the 21st century.

  33. You can start by sprucing up the Tired ass paint scheme on the planes.Then menu vegan/ Impossible meats.and Cater to service for a small feeEtc if you want more advise my salary range is $350,000 annually plus stock options.

  34. @ BillC — With United, canceling and reinstating miles are paired automatically. With American, they are separate transactions, and the latter can’t be done online.

  35. AA used to be, and SHOULD be, the Best US Carrier, but under Parker, it’s become the WORST. HE NEEDS TO GO!

  36. @Tiffany — “With United, canceling and reinstating miles are paired automatically. With American, they are separate transactions, and the latter can’t be done online.”

    Thanks very much for clarifying! I’m just shocked that, in this 21st century, AA hasn’t done such automatic pairing for the benefit/convenience of their passengers! 🙁

  37. Getting rid of that one woman is exactly what they needed. All-male management will show how to run an airline. Right?

  38. Rats on a sinking ship.
    As a 21 year employee, it is my humble opinion that a MAJOR shakeup is needed! The leadership has managed to alienate passengers as well as employees. There seriously needs to be a clean sweep starting with BOTH Parker and Isom. Their small airline mentality has really drug AA through the mud and we are in desperate need of new leadership. Morale has never been lower and with Oasis, inferior operating systems, the blame of employees for their failures, the ongoing negotiations that have dragged on for years, we have seen time and time again that they just can NOT get the job done. It’s past time to MOVE ON to bigger and better pastures so that we can regain the traveling public’s’ faith and restore our place among the pantheon!

  39. @Justin Ross Lee

    Are you the real JRL???

    I can confidently say if Justin Ross Lee thinks anyone charm/talk his way out of an impending forced exit, or his way to free First class, hotel suites, and other BS. That that guy is the man.

    So hell yeah, Doug Parker will last very long. Endorsed by the master of charm/talk himself JRL.

  40. I really feel Doug is almost gone. The way he is managing the airline is really sad but only time will tell. By the way I am out of AA systemwide certs this year believe it or not. I have been able to use all mine and i have a trip to china in the coming weeks. Is anybody looking to trade a single systemwide cert for a united regional upgrade. I know they are not the same but that is all i have left this year. all the best @ Ben- @ Tiffany and all the
    @ onemileatatime team keep up the good work

  41. Get rid of DP and his clan, scrape the Project Oasis and the removal of IFE and bring back inflight meal service!

  42. @Anthony, thank you! Also, there are a lot of people who enjoy this blog and don’t live in the US. This means it’s extremely unlikely that we will ever step foot on any US airline and therefore don’t give a hoot who is in charge of them.

  43. Here’s Americans problem there is no element of customer service. Yesterday I had a direct flight from NYC to Nashville. They cancelled this and put me on an indirect flight and downgraded me to economy.

    At no point through the process either on any of the SMS/call center/airport did any of the staff say sorry. Not one. I was told multiple times I didn’t do it, it was the airline. Do you not realize you are the airline.

    And there is your problem staff who have no feeling of connection to the airline.

  44. Philipovitch was a legacy USAir (pre-America West merger) holdover. That speaks volumes as to why the customer experience on AA continues its downward trajectory. AA needs to clean house (including Parker, the C-suite, and all legacy USAir employees). Then, hire a voodoo priestess and Catholic priest to rid them of the Agony/USAir/U.S. Airways evil spirits.

  45. I am not making an excuse for apathetic employees, but an overall decease in customer service rests mostly on American Airlines – not the employees that are considered the “face” of the airline. I was with AA for 13 years until resigning in June 2019. I left not because of the job or the customers, even difficult ones (you know who you are ha ha) – I left because I could not take the undue stress and pressure caused by the company.

    I believe if you are working with the public, you should be able to deliver excellent customer service, or at least adequate. I used to pride myself on going to work everyday and trying to provide a positive experience because I am aware of how stressful air travel can be. I am sharing this first hand and with all honesty, that is not important to AA. The are slaves to the stock holders, and the customer’s experience as well as the employees falls by the wayside.

    Often times you are not provided correct and timely information is simply because the agent does not have it, and it’s not for a lack of trying. Henry above is right, there is an issue with no connection to the airline, BUT that is not necessarily the fault of the employee. If you were forced to work 16 hour shifts, not being able to leave work until 5am, having to call management to use the bathroom because every minute of a gate agent’s shift is scheduled by an “all knowing” staffing manager program – I don’t think you would be very pleasant and want to be associated with the airline.

    Doug Parker must go and there needs to be a complete restructuring at the top in order for company culture to shift. Until there is a group of individuals who sit atop of the hierarchy that value the employee experience and the effect that has on customer service, no change will be made. American, you are NEVER too big to fail.

  46. That announcement is nothing more than a word salad- Phillpovitch is retiring, BFD! In the meantime project Oasis (AKA making every AA a/c as miserable as US) forges ahead- The only thing this merger produced is USAir on steroids. American Airlines is long gone… They like to say it’s the “New American”. NEWSFLASH: It’s the “Old USAir”. (LOL Ricport)

  47. I think you are making this out to be more than it is.

    It is very common for corporations to shuffle things around when a leader retires. They need to realign resources to fill in the gap of the departing leader.

    This isn’t about a looming larger shakeup or Parker buying more time (which a conspiracy theorist or author trying to get clicks would like you to think). This is just senior leadership realignment due to the retirement of one person.

  48. Until Parker goes nothing changes. The airline has lost its identity totally. They service routes that are clearly not profitable for over a year then dump them. The work rules are horrible, what Parker calls profit sharing is laughable. Until they begin to treat the employees better their will be no improvement in the customer service experience. Not rocket science.

  49. Actually the to fellow who was complaining about Casey being an unknown, as I read it, AA has generated more revenue than any other Airline in the world. These aren’t my figures. So let me get this straight, since Casey has been senior VP of revenue, American has been generating more revenue than any other airline in the world and somehow it’s a joke to give him more responsibility? Brilliant, just brilliant! https://www.consultancy.uk/news/13588/the-10-most-profitable-airlines-of-the-globe

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