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.
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?
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