As anyone who follows the airline industry knows, American Airlines is horribly lagging Delta Air Lines and United Airlines when it comes to financial performance. The airline saw profits plummet by 87% in 2025, and American’s CEO didn’t really have much of a narrative for how things are going to change, other than that they’re…
Continue reading: Who Is Fixing American Airlines, And When Will They Replace Robert Isom?
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They desperately need a culture guy. These no-name corporate blank faces are extremely hard for employees to believe in, and it's going to be impossible to shift the culture without buy-in from the employees
Wishing them all the best, regardless. For workers, consumers, and shareholders alike, we should want healthy competition in commercial aviation, improving hard and soft products, schedules, routes, and reliability. Free Wifi, enhanced premium cabins (Flagship Suites), and new lounges are a decent start. (Actually supporting your crews during a storm would be real-nice, too.) Good write-up, Ben.
Nothing personifies the decline of AA better than flying “Flagship” F or J on select routes between the US coasts. A bold, differentiated offering when launched..it is now sad and neglected. Filthy cabins, broken monitors, lackluster service, smelly toilets. Yet all still priced at very premium levels. Once my darling favorite US company, exposure to AA is now something I try to keep contained. The buck must stop…as the saying goes…at the top.
The question is will AA spend the money to fix the airline. Operations are often a dumpster fire. The coach product is lackluster. The premium business product (the outdated 321T set aside) is actually pretty good, sans the operational issues. Some of the lounges need to be either expanded or upgraded.
They need someone intimately familiar with the profit boost that comes from a broad portfolio of MRO contracts. They need someone who will guide them into achieving a higher RASM for transpacific flights from cities west of Cleveland but east of Las Vegas by having the highest percentage of suites on wide bodies whose model name starts with A. They need someone who understands the inherent superiority of the A350-1000. They need Tim Dunn.
The CEO and other officers of a U.S.-state based corporation report to the Board of Directors, which then reports to the shareholders.
Appreciate the write-up, Ben. I'm in a similar boat that nothing would make me happier than seeing AA succeed because I was also loyal to them for over a decade. Nowadays I fly DL most because they're often the most convenient and surprisingly cheapest, not to mention leagues better to experience.
The one request I'd make if they do a clean reset of the top is that they don't devalue AAdvantage, and if anything try to restore some of the perks that have been lost (e.g. Etihad premium redemptions). The only real reason to interact with AA at all is for AAdvantage.
The story is not unlike WN which failed to see for a very long time that what they were doing wasn't working.
The difference is that WN is well on the road to profitability again while AA has yet to realize it needs to change.
It will take years of a mgmt change and implementing new strategies for AA to turn around but yesterday was a day to late to start
it would be a wonderful world where Ben Smith could come to AA but... in this weird world we live in, I do wonder how the name "American Airlines" would be treated in DC with a Canadian coming in to run American.
I'm well aware he would not be the first Canadian to run AA and it's sad to even write the above and that we live in a time with such ridiculous considerations but... we do. Plus, why would he come to AA with the current mud slinging going on from the US towards Canada?
Some of the AA people that left with Kirby for United would be great candidates to come back and run AA as CEO since they know where the real internal issues are at AA and who to immediately fire.
Ankit Gupta comes to mind... Young, very smart, knows the AA and UA networks inside and out.
I think your starting at the wrong spot -- the board needs a reboot. They've been asleep at the wheel as well.
In terms of AA improving their product to get on the "premium" bandwagon, I am still skeptical that AA is really committed. I feel like at this point, everything AA has done has been from a reactionary standpoint rather than being truly committed to beign premium.
I still hear the words isom said..."don't spend a dollar more than you have to..." To this point, it appears they are spending the dollars only because they have to.
As a former United Globalist that has transitioned to American and OneWorld in the last 6 months I don’t even understand what you are saying. My business class customer experience on American is far superior to anything I experienced at United. American’s employed are more engaged and appear much healthier than anyone I saw at United (especially flying from IAH). The food is edible unlike United where my ticket often was nearly $10K and I couldn’t even eat anything onboard.
Unfortunately he can’t. He’s been fired and banned. Nowadays he just lives his days by envying those who weren’t.
This is not my area of interest but based on my limited knowledge in a subject matter, they must install a qualified "new sheriff in town". Isom is the typical example of reversed DEI that most people want to avoid acknowledging but have no shame in goading against non-whites. AA's three core groups have different interests and the flying public bears the brunt. The shareholders mainly focus on the company's stock prices but if there is an activist shareholder who commands a big enough shares to force the vote on the board, he will get his way to make a drastic change. The CEO has great influence in selecting Board members and in return Board members align with CEO's agendas. Board members are mostly "the movers and shakers" in other industries who have connection to get selected, have little or no background in aviation, show up a few annual meetings, and collect obscene compensation. Board members tend to sit on other boards of multiple companies. There is no incentive for them to be branded as an outcast or non-team player only to be ousted from the exclusive old boy clique. Different unions stake out their own interests and show little or no support for each other. They want to maximum their compensation and privileges with little or no accountability. Unions protect and defend their rogue members and make it virtually impossible to be removed, unless a member commits a criminal act. I remember reading the LA Times report it cost LAUSD seven years of legal costs, paid salary and benefits to one teacher before he was legally terminated. Our culture pursues and promotes self interests above common interests. I am skeptical that a qualified competent foreign CEO will be incentivized to take up the baton. I am not convinced that other former airline CEOs have the qualifications and stamina to overcome the challenges. Do you ever wonder why the CEOs in all industries continue to splurge on obscene compensation package after tanking their companies with impunity? It is capitalism at its climax.
Pivot to premium? Hire His Excellency Akbar Al-Baker. The administration already loves Qataris. AA can't lose with him at the helm, and my goodness, the press conferences from Ft. Worth would be fire!
It would be pretty on the mark for AA to promote from within (from the legacy America West talent pool) and then continue to scratch their heads when nothing actually changes.
I believe you may be referring to international service specifically. I agree re United's bad service and have written several comments about how bad service is on United International flights. For some reason, I have much better experiences on United when I'm flying domestically, however (at least compared to American).
With United, there seems to be a culture issue with the agents being rude, but the operation itself is fine. With American, it feels like they're well-intentioned but can't get things together... so many delays, cancellations, issues with luggage, etc.
Obviously not serious, but that was the first name that came to mind when I read the title of this post!
Someone needs to get the Board to call Ben Smith. If he can fix the mess at Air France, AA would be a cake walk.
+1. Oscar Did a phenomenal job at United and set the table for Kirby's success.
Much of global corporate life is an old white boy network where many men continue to fail upwards. The only incentive to change it is when people are feeling the pain in their wallets. Some boards are too close to the c-suite coz it is somewhat of a symbiotic relationship.
How will AA fare? Who knows.
100% right they need to clean house in ALL of upper management! As a shareholder and 3+ million miler enough is enough and the people they bring in absolutely needs to come from outside AA.
It does seem like they need to reboot the employee culture, including management. I'd love to see them move aggressively to ditch some of the low quality America West fleet (A321 and A319s in particular) and try to put more mainline jets on major routes instead of regionals.
The brand, routes, order book, app, Frequent Flier program, etc are all great - so they just need to make margin on the operations and not have expensive issues that use up those margins so quickly. Then presumably the much larger profit on selling frequent flier miles would juice the numbers.
One big drawback to American corporate culture is the moment money starts rolling in, they don't reinvest or profit share or buy down debt, instead they try to juice the stock price with (useless) share buybacks or dividend payouts. The idea of long term investing is a tough sell in American boardrooms. I think American has even done some of those money-burning stock maneuvers since their last merger.
Ben, like you, I would prefer to see AA succeed. But there is incredible irony (Karma) in the unions turning on Isom. It's their support that enabled the clowns from America West to takeover AA and it's been a straight line down ever since.
P.S. I've lost faith in AA's FA's to ever deliver more than sullen, diffident service
Ben - well written. I will never forget the comment I first heard about USAIR - "U Are Still Allegheny in Reality".
You probably don't remember Allegheny but they had a similar reputation as today's AA.
I seriously hope AA can turn it around. There are many dedicated industry professionals out there every day working for at AA.
As for Ben Smith - I worked under him at AC for a number of years. Yes, the man is brilliant beyond belief. I highly doubt he would leave AF for AA.
I am not entirely sure whether AA needs a new CEO; however, I am certain that the very last thing they need is McKinsey or BCG.
Amen. I want to spend my money on American. I just can't right now. Poor international route network and increasingly poor product and morale.
The AA board won't wake up. While they *may* get rid of Isom, he'll just be replaced by someone who will fill the board with his cronies like the last set. It's generally that way in Corporate america, IMO (although happens with private colleges too)
Tale as old as time. Finance leaders are poor CEOs, and that is quadruply true in consumer facing industries like airlines. Customers know when they're being pinched, and finance leaders have the claws of a crab. Finance should always have a seat at the table, but bean counters always fail to differentiate from competition and delight customers.
As an AA loyalist myself, I do not want some recycled washed up airline CEO from across the proverbial street. How abut bringing in talent from a visionary futuristic industry? There are TRILLION dollar tech business leaders who actually might be able top contribute an original idea in an industry in dire need of an escort into the 21st century.
Hello Ben,
I can tell you for a fact that Peter Ingram former CEO of Hawaiian, is not up to the job.
I approached Larry Hershfield from Ranch Capital, who was chairman of HAL, many years ago and told him that Hawaiian Airlines was in deep trouble with the way that Mark Dunkerley was running it as CEO, and that I had a plan to rescue the airline. we talked, but then he wanted me to approach Mark Dunkerley with my plans, which I did.
Mark Dunkerley said, "Rescue Hawaiian?, Hawaiian doesn't need rescuing."
then when Peter Ingram was moved up the ladder into the CEO's position, to continue with a 'safe pair of hands', and by the end of 2024, HAL had a market cap of just $US200 million, a massive decline from the $60 odd value of each share, not too long ago before that.
And nothing new is going to happen at Hawaiian for a very long time now, because Alaskan didn't buy the airline to improve and bolster Hawaiian, they bought it to poach all of the B787's that Hawaiian had coming, and to move them to their Seattle hub for expansion. Even some of Hawaiian's A332's will end up in SEA.
Most airline execs can't be told anything, because they think that they know everything. And if they take advice from someone else, then they fear that they may be eliminated from the big gravy train.
I re-approached Lufthansa last month, with a plan focusing on a complete change of strategy. I last approached them in 2019. Then their focus was on Alitalia/ITA, and now they are set on TAP Air Portugal, even though Ben Smith says that he has got it in the bag. In my opinion they need to do some very different things, but they don't want outside advice. They just came through a first half profit in 2025 of 24 million euros on a 20 billion euro turnover, and flew around more than 25 million empty seats. Clearly, they need a change of strategy, so time will tell whether I'm right or wrong.
Similarly with American Airlines, they need to rethink what they are doing completely, a clean sheet of paper, because they are clearly being trounced by both Delta and United, and Scott Kirby is mouthing off about how he will run them out of ORD.
American is sliding down the slippery slope, and needs to put the brakes on, and then shift into a brand new gear.
I have lots of plans on how to do this, but I am probably not even going to be allowed to get past the gate keepers to present my plans to the Board of Directors.
Too many top people are going to protect their high salaries and bonuses before looking after Customers, Staff, and the Shareholders.
Another year has passed at American Airlines without action at the top ... just a copy and paste of the previous year's outlook, which was a copy and paste of the one before that.
Isom should have been kicked to the curb years ago. As long as he is there he will always be a Doug Parker clone. Ripped out TV seatback entertainment, thought it was better to compete with Spirit and Allegiant. I have met Mr. Isom and he is a very nice man. It was in a conference where both Parker and Isom were answering employee questions. Parker was doing all the talking, while Mr. Isom stood against a wall, yawning. He said very little. I wish him well. Does Gordon Bethune have a little brother?
I suggest offering the AA CEO position to Jon Snook. He was at AA up until the US/AW takeover then went to Hawaiian Airlines as COO and is at Alaska Airlines since the merger.
Jon Snook came to AA as a ground level agent working his way up to the Executive level. He is very familiar with AA, it’s employees, routes and finances.
It’s time for a change at the top and bringing back not just a familiar face but an executive with history in AA is what is needed,