Yesterday, American Airlines announced that one of the company’s top executives is leaving the airline. I’d argue that this has significant implications, and is even more telling than if the CEO left the company. A lot has happened in the hours since this was announced, and I wanted to take a more detailed look at what this development means for the future of the airline.
In this post:
American’s Chief Commercial Officer is out
Vasu Raja, American’s Executive Vice President and Chief Commercial Officer, will be leaving the airline in June 2024. He has been in his current role since April 2022, and prior to that, he served as Chief Revenue Officer and Senior Vice President of Network Strategy. He joined the airline back in 2004, and spent two decades working in a variety of roles related to sales, planning, and revenue management.
Stephen Johnson, American’s Vice Chair and Chief Strategy Officer, will immediately be assuming leadership of the commercial organization, and will help lead the search for a new Chief Commercial Officer.
There are several things that are really telling here. First of all, the announcement doesn’t provide the reason for Raja’s departure (not even “personal reasons”), and it doesn’t even have the typical nice quote from the CEO thanking him for his years of work. That suggests to me that Raja may not be leaving the company on great terms.
Interestingly, American CEO Robert Isom spoke at a conference this morning, less than 24 hours after Raja’s departure was announced. Isom addressed Raja’s departure, saying the following (which makes it pretty clear he’s not leaving voluntarily):
“I admire his creative thinking, his passion, he’s an innovator, a disruptor, he’s a good friend. But sometimes we need to reset, and in this case, we have to be better at executing these long-range plans. We have to be more attentive to the marketplace. We have to be more detail-oriented and we have to go forward as a team.”
It has been a very strange couple of weeks at the airline as it relates to Raja, and I can’t help but wonder what has been going on internally. Some time back, it was announced internally that Raja would be taking a “sabbatical.” That caused rumors to swirl, so the messaging then changed to say that Raja would instead be working remotely due to personal matters.
However, the company had insisted that he wasn’t leaving… I feel bad for American’s communications folks, who were obviously put in a tough spot, and seemingly had to lie at the leadership’s request.
By the way, here’s another point that I find noteworthy. Back in 2023, American’s top executives had their contracts updated to reflect new severance benefits, in exchange for post termination restrictive covenants (in other words, they’d receive golden parachutes if fired, in exchange for a non-compete).
Virtually all of American’s senior executives were included in that, except Raja. I can’t help but wonder if that wasn’t offered to Raja, or if he was simply over confident in himself, and thought that he’d never get fired, but that another airline might want to poach him.
Vasu Raja getting cut is long overdue
I’m trying to balance honesty and politeness here. On the plus side, let me say that Raja seems like a generally smart guy who is passionate about the industry. That being said, Raja’s departure from American is long overdue.
For whatever reason, both American CEO Robert Isom and former CEO Doug Parker had a lot of faith in Raja, and seemed to think he was some sort of a genius who would positively transform the airline. At times, it almost felt like he was tasked with deciding on the company’s strategy.
He’s the guy behind so many of American’s current strategies, from American essentially being a huge domestic airline with little long haul focus, to basically giving up on corporate sales and business travel. Raja is also the person who kept insisting that American’s “product” was its schedule and network, and that nothing else really mattered.
Prior to being in charge of everything commercial in the airline, he oversaw network planning, and he doesn’t exactly have much to show there either. The Seattle international hub? That didn’t work out. The New York international hub? That has already been scaled back.
Raja has always talked a really big game. If you hear him speak, you can’t help but be impressed, assume that he’s a man with a plan, and that he knows what he’s talking about. But I think American’s financial performance compared to Delta and United speaks for itself. Under Raja’s leadership, American has essentially morphed into a massive ultra low cost carrier with a high cost structure.
At this point, American essentially makes money on its frequent flyer program, and that’s about it. American’s margins on flying are very low, and for that matter, the carrier has just adjusted down its guidance for the second quarter, reflecting weaker domestic demand.
Within 24 hours of it being announced that Raja would leave the airline, American has already announced that the company will backtrack on plans to stop awarding miles on many third party bookings. That was a cornerstone of Raja’s strategy for the airline.
What’s next for American’s strategy?
With Raja gone, my hope is that this represents a turning point for the company’s strategy, and means that we’ll actually see the airline take a new direction. I’m skeptical, given for how long American has been headed in the same direction, but you can’t help but hope…
What I’d really like to see American do is hire someone from outside the airline. American’s leadership is so insulated, because a vast majority of the company’s executives have been at the airline for decades. There’s such little fresh thinking, and that needs to change. I can think of a few people I’d love to see in this role, so let’s see how this plays out…
Lastly, I think it’s worth acknowledging how little responsibility Isom seems to be taking in all of this. As I said above, it really feels like both Isom and Parker have spent the past several years giving Raja free rein to make whatever radical changes he wanted. They’ve even backed him up as he has claimed that their sales strategy is a success, even as the company now backtracks.
Neither Isom nor Parker have shown any sort of leadership in developing a strategy for the airline. That’s quite a contrast to the CEOs at American’s two biggest competitors:
- While I wouldn’t say Delta CEO Ed Bastian is a visionary who has changed the course of the airline, he has done a great job maintaining Delta’s market leader position, and positioning the airline as a premium carrier with staff who care
- United CEO Scott Kirby has been the most pleasant surprise, in terms of doing what he can to positively transform the airline, and having a vision to make United increasingly premium and global; while not all of his plans have succeeded, he’s right more often than he’s wrong, and the company is headed in the right direction
Meanwhile what can we really say about the leadership of Isom and Parker over the years? I mean, in fairness, maybe we should manage expectations, given that their background was running US Airways and America West. I suppose in some way, they’ve continued with that strategy, of just running a big low cost carrier. So maybe it’s shareholders and the board who are really responsible for this mess…
I’m curious to see what’s next at American. American has a profitability issue compared to Delta and United, and needs to close the gap, especially as the carrier’s cost structure continues to increase (with a new flight attendant contract coming soon). Could we see American shift its network strategy? Or just its sales strategy?
Bottom line
Vasu Raja is out at American Airlines. Based on the tone of the announcement plus the recent rumors, I’m guessing this wasn’t a voluntary departure, and that the board finally realized his “vision” wasn’t exactly delivering the results he was promising.
If you love El Paso (nothing against El Paso, but it does get Raja very excited) and hate business travel, Raja’s departure from the airline is the worst news possible. For the rest of us, well…. we can hope this is the start of something new at the airline.
What do you make of Raja leaving American?
Let's not forget to mentionthey abandoned South America, loyal businesses from the South who is moved strongly by Asian sought on Latam/Delta to rely better connectivity as soon they did that we drop profits and here they are 11bucks stocks
AA has gone from a leader in the aviation industry to a low cost carrier. I am embarrassed to say I worked for them for 40 years.
It’s not about passenger comfort or safety. It about CEO’s making 34 million because it’s “industry standards”. It’s about blaming employees instead of carrying about passengers. Sad
A credit card company that happens to also fly planes...
A majorly BAD decision was to decimate it's world-wide sales force. These are the professionals that were the front and center to AA's corporate and agency customers. Helped solved the day to day problems that arise in this business. Just totally dumb decision.
i have been flying for > 50 years and have watched AA fall from a great carrier to credit card with wings....
I hate to see a guy like Vasu taking the fall for the repeated decisions by a horrible and grossly overpaid executive suite (Isom = $31MM) that was installed by Parker and further enabled by a clueless board of directors
I feel, the AA downward spiral has almost reached terminal velocity and...
i have been flying for > 50 years and have watched AA fall from a great carrier to credit card with wings....
I hate to see a guy like Vasu taking the fall for the repeated decisions by a horrible and grossly overpaid executive suite (Isom = $31MM) that was installed by Parker and further enabled by a clueless board of directors
I feel, the AA downward spiral has almost reached terminal velocity and a simple replacement for Vasu is not going to make a bit of difference especially since "revenge travel" is soon going to be a thing of the past..
sometimes you can't climb out of hole that you dug for yourself
This is long overdue. Many people don't realize most of AA's recent problems should be blame to Vasu rather than Parker or Isom. When he was the head for just the network planning department, he only wanted to retreat from different market rather than trying new markets and compete with other major airlines.
My dislike of AA goes back MANY years as a corporate travel manager in SFO, a UA fortress hub. We BEGGED AA for nonstops from SFO to BOS & IAD to be able to at least offer our staff alternatives to UA. Many corporate contracts from my NYC leaders...AA's response ? a nonstop to PHX... for 2 weeks. I flew AA almost exclusively for 5 years and almost always in F. What poor service and...
My dislike of AA goes back MANY years as a corporate travel manager in SFO, a UA fortress hub. We BEGGED AA for nonstops from SFO to BOS & IAD to be able to at least offer our staff alternatives to UA. Many corporate contracts from my NYC leaders...AA's response ? a nonstop to PHX... for 2 weeks. I flew AA almost exclusively for 5 years and almost always in F. What poor service and catering. The company has been out of touch for years and seems to want to compete with Spirit and Frontier when it comes to customer care and inflight service. I see no hope in this company ever again becoming the classy airline it was say pre- 1989.
The CEO and his team are the roots of all the problems facing AA, as I said many many times during the past years, without those guys leaving, AA will continuously perform badly! This guy has no vision!
I just flew business from NY to Paris on a leisure trip and my FA was just rude, like she hated her job. The hard product was just ok. The food was just ok. Jet blue mint is a better product which I flew to San Diego earlier this year. The melting of jet blue and AA was really sad. The culture at AA does not seem to be good.
The CEO is such a stupid asshole and should be fired long time ago as I said many many times!!!!
I’m sorry but united and delta being Americans competition is long gone when they merged with that crap airline!! Spirit and frontier I believe are their competitors now with this 3 ring circus in charge!! This airline has ment nothing to these clowns it’s basically their atm that’s it!! Bring back old AA and get rid of the circus board members wake the fuck up!!
Isom should leave soon. I cant believe it took this long to get rid of Parker, Raja and Isom. They have done nothing for AA. Look at the numbers, lowest ever. Look at the routes, poor as ever. Look at the planes, they are falling apart. They put 0 strategy. They should have been fired long ago just based on the stock.
I hope this means American re-enters the business market. I fly multiple times a month dca to bna and over the past few years, I recognize many fellow travelers. Since exiting the business market and putting fares nearly double of southwest & delta, I recognize those same fellow travelers on southwest with me now. I can’t imagine that this leisure traveler focus strategy is working for them.
Will they bring back ife on narrowbody?
I was in Dallas for the Braniff fiasco; ticket sales were mostly via phone calls, travel agents had primitive computers; a supervisor laughed, "I don't care what the caller wants, I tell everybody to give the absolute cheapest fare we have, bereavement, military, whatever. We're costing Braniff tens of thousands a day, its the only way we can get their attention." I wonder if today's AA employee doesn't have the same goal in mind.
Thank you!
Another issue which appears to be under reported is that American lately has been charging corporate customers a higher price for tickets than those you could get on AA.com in some cases to a significant degree. Like many, I’m bound to purchasing work tickets through Concur and can’t pick American if the flight is 2x others and it especially galls me as an AA EXP if I can see the better fare on AA.com and can’t fly my preferred airline.
The insulated thought process in Dallas is mind numbing. The fact they implemented a sick policy that isn’t even legal in half the states they have a base shows they are out of touch and simply don’t care. Anybody with a brain could’ve told them they’d face lawsuits over it but they did it anyways thinking they had the right. The entire management needs to go and Dallas needs changes from the top down. They...
The insulated thought process in Dallas is mind numbing. The fact they implemented a sick policy that isn’t even legal in half the states they have a base shows they are out of touch and simply don’t care. Anybody with a brain could’ve told them they’d face lawsuits over it but they did it anyways thinking they had the right. The entire management needs to go and Dallas needs changes from the top down. They think Dallas is heaven on earth and only want to be surrounded by “yes” men. It’s a cult.
I personally worked for and was hired into AA by Vasu back in 2010. That is when he had just become Managing Director. At the time, he was seen as the breath of fresh air. Most of the company was still trying, at that time, to recapture the glory days of 1980s/1990s era AA under then CEO Bob Crandall, who absolutely at the time made AA cutting edge. But by 2010 that leadership was long...
I personally worked for and was hired into AA by Vasu back in 2010. That is when he had just become Managing Director. At the time, he was seen as the breath of fresh air. Most of the company was still trying, at that time, to recapture the glory days of 1980s/1990s era AA under then CEO Bob Crandall, who absolutely at the time made AA cutting edge. But by 2010 that leadership was long gone, and literally every strategy or initiative was "if we could just recreate what we did in X area back in 199X, things would work out". Vasu at the time wanted to move forward and not rely on 20 year old thinking. He was absolutely seen as the innovator, and at the same time was politically savvy enough to get promoted and be there through merger etc. Obviously, his big strategies didnt all play out, and for many reasons AA has declined, but initially and based on my experience directly working at AA and for him specifically i'm surprised at how things eventually turned out. Oh well, alas!
As a multi-year CK, I was one of your ideal customers. His choices alienated me. Now, Isom is saying AA will start to reengage. I received an outreach call and related that there has been too much blood that's gone under the bridge. But, best of luck.
Your? I left 13 years ago
I wish Raja the best in his next endeavor, and am looking forward to the future for the venerable American Airlines. Who knows, I may resume flying them.
I think Vasu is an innovator, disruptor & a passionate guy. However, having worked with him closely, I can say he had hardly any factual/data basis for his decisions. He makes things up on the go & fires people who disagree even with data to back their disagreement. Maybe he turned out that way by 2016! Overconfidence? Self-centered? I don't know. He was never a good people leader & when 8 out of 10 decisions...
I think Vasu is an innovator, disruptor & a passionate guy. However, having worked with him closely, I can say he had hardly any factual/data basis for his decisions. He makes things up on the go & fires people who disagree even with data to back their disagreement. Maybe he turned out that way by 2016! Overconfidence? Self-centered? I don't know. He was never a good people leader & when 8 out of 10 decisions one makes is a disaster, it should have never called for accolades. Manipulator is a more accurate word I might use to describe him.
Next on the chopping block: Znotins. Please. The network planning under the two of them can be characterized as on again/off again. I can no longer rely on a route I booked not being cancelled. Having been a CK during five qualification years (onyon my own dime), I'm sadly at a point that AA is no longer my go-to airline.
To elaborate, he said that the network schedule is the product. But, he and Znotins made the wrong network schedule choices. Pure and simple. And, if network schedule alone is the product, how can Emirates or Singapore or Air France command the premiums they do? But, he'll soon be at another airline. Count on it.
Has anyone noticed what a great job I, Arik De, have done at Etihad?
My key achievements include:
- Most despised exec in EY history (2023, 2024)
- Promotion to Chief Micromanagement Officer (2023)
- Losing most of my top performers because they dared disagree with me (2022 -)
- Removing all employee perks related to travel and work flexibility (2023)
With my humble attitude and intact reputation, I nominate myself for this role at AA.
Best comment I ever heard about Vasu:
"Often in error, never in doubt".
The old furniture needs to be replaced. Like tree leaves fall to grow new and old fall to replace with new. a way of nature. keeping alive artificially does not benefit any one. out with the old furniture and in with new.
If Vasu had a larger moustache he would have been successful.
Didn't Doug Parker effectively set the direction of AA to be just a bigger USAir? Heck i remember flying USAir to London many years ago say 2003 from CLT and perhaps a similar daily scheduled to what they have now in 2024. . Im not sure i feel like American is that much diff then an early 2000's USair.
The merger of US Airways and American was a huge mistake. The leadership of US Airways has brought AAL to a level of service just below Spirit Airways. Their fleet is young, but they can't seem to get their identity, focus or labor contracts moving in the right direction.
"I’m trying to balance honesty and politeness here."
And that is why this is my favorite blog.
If everyone thinks that this is a good thing, I would be cautious. The rising generation of new c suite leaders was often thought of as Vasu Raja, Kenji Hashimoto, Devon Mays, Kevin Brickner, JC Gulbranson, and Heather Garboden.
Out of that bunch, Devon has made it to CFO. I think Kevin or JC will end up becoming the COO. Heather is being given ops exposure through Cargo and Regional and I get the feeling...
If everyone thinks that this is a good thing, I would be cautious. The rising generation of new c suite leaders was often thought of as Vasu Raja, Kenji Hashimoto, Devon Mays, Kevin Brickner, JC Gulbranson, and Heather Garboden.
Out of that bunch, Devon has made it to CFO. I think Kevin or JC will end up becoming the COO. Heather is being given ops exposure through Cargo and Regional and I get the feeling they are grooming her to replace Steve Johnson. This leaves a hole in the commercial side, because they have no depth left in that org - everyone that disagreed with Vasu’s strategies was fired and who is left are Vasu cronies.
Looking at the Board and Steve Johnson, they don’t have any former L-US candidates to fill the seat (Andrew Nocella is already the CCO at United). They might think to tap someone former Northwest or Delta, but outside of that, I don’t think they’ll find a good airline candidate.
We’ll see if they have the courage to hire someone outside the airline industry AND use their ideas (i.e. Janelle Anderson who came from Pepsi and ideas on global brand identity clashed with Vasu’s ideas on network being the product).
I predict them to continue to lose market share and deliver sub par financial results for the next 12 months.
The US carriers are often poor compared to pretty much anywhere else, but AA are terrible. Seat size on a long haul was more like low cost carriers in europe. Havent flown with them since.
Cute statement but facts are tricky things when you actually try to back up your statement
Aerolopa.com
Vasu if you need help creating fake Linkedin accounts to make yourself look good, I know a guy.
Actually, I know many guys...
While Raja might have been a contributor to AA's current problems, IMHO, he's hardly the only one. Which means I'm not so optimistic that his departure alone will have a big impact.
The bottomline is that AA was taken over by an LCC (America West) and that leadership team is still in place, and they continue to try to provide the service of an LCC (and I mean service broadly, including network and schedule) while...
While Raja might have been a contributor to AA's current problems, IMHO, he's hardly the only one. Which means I'm not so optimistic that his departure alone will have a big impact.
The bottomline is that AA was taken over by an LCC (America West) and that leadership team is still in place, and they continue to try to provide the service of an LCC (and I mean service broadly, including network and schedule) while trying to extract revenue like a full service airline. Instead, they've driven away the high-paying customers of a full service airline, being left with the customer base of an LCC with the costs of a full service airline.
I don't know the dynamics of what went on in their executive offices, but it's entirely possible that Raja *wanted* to expand the network, with plans like building an int'l mini-hub in Seattle, grow and defend NYC, etc. but when push came to shove (i.e. the airline actually had to spend money and resources to grow), this was nixed by the CEO and Board who still had the LCC mentality of "let's expand in El Paso and call it a day. Now, let's spend the rest of the meeting seeing if we can shave another peanut from the snack service."
Bottomline is that executives have to be aligned in their vision for it to be executed well, and it's not clear that Raja was ever aligned with the rest of the team that's still caught in their LCC mentality.
Let's not forget that Isom is a small fish operating in a BIG pond. He is a lost ball in high weeds. The LCC mentality isn't working and the brand of AAL is trashed. When was the last time AAL was a leader in the market place? Too many failed strategies, missteps and lack of innovative ideas...
Raja was also attempting to unilaterally shift the distribution paradigm away from travel agencies to direct channels, including moving 40% of fare types to limited-function NDC channels, restricting which agencies can book AAdvantage-eligible bookings, and generally alienating the travel trade. Bold move, but it ignores the fact that pretty much all major corporations use a TMC for good reasons.
you are correct. that is the fatal mistake.
Raja was not wrong - AA’s competitive advantage (its business) is schedule, network designed to serve high value passengers. However, that assumes the rest of the AA Team executes “their” part of the integrated business successfully. Historically, a destructive, overly competitive management and union-leader team has failed to execute successfully and as a result, the targeted customers no longer trust or will be loyal to AA.
Raja may not have been wrong, but he certainly didn't execute on that vision. Schedule and network does matter. Which is why United has built up fortress hubs in the biggest cities, including NYC, Chicago, SF, Washington, and Houston. That gives them an advantage in having the best schedules out of the cities with the most business and/or high-fare traffic. Or you could go Delta's route, where you keep your hubs in smaller cities (aside...
Raja may not have been wrong, but he certainly didn't execute on that vision. Schedule and network does matter. Which is why United has built up fortress hubs in the biggest cities, including NYC, Chicago, SF, Washington, and Houston. That gives them an advantage in having the best schedules out of the cities with the most business and/or high-fare traffic. Or you could go Delta's route, where you keep your hubs in smaller cities (aside from NYC), but opportunistically add point-to-point routes that are successful and sustainable.
American does neither. Aside from Dallas and Chicago (and in Chicago, they've cut back drastically and probably have lost a lot of corporate travel to United), AA's hubs are in small cities that don't generate much O&D traffic, leaving them with a lousy schedule for high value customers in the other big cities. And they haven't grown nor successfully competed on lucrative point-to-point routes outside their hubs.
If Raja's point is that the network and schedule is the most important thing, he has failed in providing that to the vast majority of people who buy high-dollar fares. That natural customer base is probably the smallest of the big 3 airlines (and perhaps even smaller than Southwest, who carries a surprisingly high number of business travelers thanks to their extensive point-to-point links).
Yeah
Not really, Lune
AA has the best schedule, by far, out of Washington at dca that travelers prefer, not Dulles.
And you conveniently forget major cities like Miami and Philly to say nothing of Aa at LAX where AA has the best network for corporate customers when combined with their OneWorld partners.
Miami, Philadelphia, and Los Angeles are "small cities?" Interesting.
Lemme guess, you're one of those people who thinks that city-proper limitations mean anything to airlines, and don't realize that every one of those has a metro/CSA of over 6million-- to say nothing of their catchment.
Hell, even Phoenix has a metro population of 5million and a catchment of nearly 7million....
@maxpower you're right about DC. I forgot about their operations at DCA.
The rest, @concordeboy are small. Miami is not even the largest city in Florida. Sure, it's a sexy city that lots of people like, but they're basically the East Coast equivalent of Las Vegas. A tourist area but not much business. And AA's south american network from Miami is replicated by United in Houston. So anyone who's willing to connect can do so...
@maxpower you're right about DC. I forgot about their operations at DCA.
The rest, @concordeboy are small. Miami is not even the largest city in Florida. Sure, it's a sexy city that lots of people like, but they're basically the East Coast equivalent of Las Vegas. A tourist area but not much business. And AA's south american network from Miami is replicated by United in Houston. So anyone who's willing to connect can do so as easily on united as they can on american.
Check out the list of largest cities by metropolitan area:
https://en.wikipedia.org/wiki/Metropolitan_statistical_area
And tell me that Phoenix is a better city to have a hub in than SFO or ATL. LoL. Lemme guess, you're one of those people who never lets facts get in the way of a delusion.
(PS. Los Angeles is no one's hub. If American believes that counts as one of their fortresses... I guess the delusion is stronger than I thought)
Los Angeles is no one's hub.
Tally up the
Bottom line is that if you tally up the GNP of the home cities of their hub (population by itself doesn't tell you how many businesses are there to support high cost travel),United probably comes first, American second, and Delta third. But Delta compensates by having lots of point to point links and focus cities picking off profitable travel.
But if you guys are so convinced that having a great schedule out of massive metropolises...
Bottom line is that if you tally up the GNP of the home cities of their hub (population by itself doesn't tell you how many businesses are there to support high cost travel),United probably comes first, American second, and Delta third. But Delta compensates by having lots of point to point links and focus cities picking off profitable travel.
But if you guys are so convinced that having a great schedule out of massive metropolises like, uh, Charlotte, is the key to success, have at it. Seems to be working out great for American so far.
@Lune
It kind of seems like you haven't looked at MSAs or MSA GDPs much and came to a conclusion absent data... This is the top ten populations in the US ranking with carrier hubs
1. NYC -- UA/DL, AA much less so
2. LAX -- AA/DL/UA with due respect to DL metal's size at LAX but they're smaller as an alliance vs AA and much smaller and less relevant vs AA/UA across...
@Lune
It kind of seems like you haven't looked at MSAs or MSA GDPs much and came to a conclusion absent data... This is the top ten populations in the US ranking with carrier hubs
1. NYC -- UA/DL, AA much less so
2. LAX -- AA/DL/UA with due respect to DL metal's size at LAX but they're smaller as an alliance vs AA and much smaller and less relevant vs AA/UA across SoCal at the other airports, which does matter with LAX flying since some only use LAX for long haul flying and prefer BUR, SNA, SBA for closer flying
3. Chicago -- UA then AA. AA is smaller, no doubt, but you're kind of forgetting the growth AA has at ORD this year
4. DFW -- AA. DAL with WN is there but nothing compared to WN's strength in HOU vs IAH
5. IAH -- UA but most folks I know don't really consider IAH a United fortress hub since HOU is so large in the area
6. ATL -- DL
7. DC -- AA easily dominates with Dulles an obvious international dominant but more of a connecting spot for a lot of domestic since it isn't the preferred domestic airport
8. PHL -- AA
9. MIA -- AA
10. PHX -- AA
Honorable mention: SFO. The SFO MSA is about the only weird one that causes it not to make this list, but the CSA of SF Bay area is easily top 10 when you include the SFO & SJC MSAs together.
AA hubs: 8; take out NYC where it's less of a strong player, 7.
UA Hubs: 6
DL Hubs: 3
Your logic about United hubs just isn't really supported by population data. AA is the dominant one on this list
But if you want to do the GDP version since you mentioned economies of those cities...
1. NYC -- UA/DL, AA much less so
2. LAX -- AA/DL/UA
3. Chicago -- UA then AA. AA is smaller, no doubt, but it's not like AA is some two-bit player in ORD
4. SFO -- UA
5. DFW -- AA
6. DC -- AA with UA there with Dulles for international but not the preferred domestic player
7. IAH -- UA
8. BOS -- DL
9. ATL -- DL
10. PHL -- AA
11. SEA -- AS/DL
12. MIA -- AA
14. PHX -- AA & WN a strong player too
15. DTW -- DL
17. DEN -- UA & WN
18. MSP -- DL
AA hubs in the Top 20 GDP MSAs: 8, take out NYC then 7; Top 10: 6 or 5 with NYC out
UA hubs in the Top 20: 6; Top 10: 5
DL hubs in the Top 20: 7; Top 10: 4
@maxpower,
I appreciate you pulling up the data but you're still looking at it incorrectly. What matters is not the ranking per se but the actual size. NYC metro (by GDP) alone is nearly as large as the #15-#20 MSAs combined. So having a bunch of hubs in cities on the lower end of that scale doesn't outweigh missing the larger cities.
Of course AA isn't just in small cities. Like I said, DFW,...
@maxpower,
I appreciate you pulling up the data but you're still looking at it incorrectly. What matters is not the ranking per se but the actual size. NYC metro (by GDP) alone is nearly as large as the #15-#20 MSAs combined. So having a bunch of hubs in cities on the lower end of that scale doesn't outweigh missing the larger cities.
Of course AA isn't just in small cities. Like I said, DFW, ORD, and DCA are big cities, but not as big (combined) as UA'S EWR, ORD, IAD, SFO, and IAH. But regardless, even if you believe AA is plenty represented in large, rich cities that can easily support major revenue, over Raja's time, they've done nothing but retrench. The only hubs they've invested in have been DFW and CLT. MIA and DCA have tread water (DCA due to restrictions built-in to the airport) and ORD and PHL have seen significant cuts. And they've completely disassembled what they had at NYC to the point where their solution was to use jetblue to make up for their lack of feed at JFK.
If you agree that outside of DFW and CLT, Raja has let American's network decline and shrink, then he has failed at his own goal.
I flew AA last week for the first time in a while, and this was on an international FIRST class longhaul flight, and it was such a letdown. The service on board was great but the customer service everywhere is terrible, and at the gate it's downright hostile! the gate agents are just yelling at all of the passengers, starting right away with first class. And as entitled as this is going to sound, if...
I flew AA last week for the first time in a while, and this was on an international FIRST class longhaul flight, and it was such a letdown. The service on board was great but the customer service everywhere is terrible, and at the gate it's downright hostile! the gate agents are just yelling at all of the passengers, starting right away with first class. And as entitled as this is going to sound, if you aren't even treating your first class passengers nicely then who are you treating nicely? All of this to say that AA is long overdue for changes at the top, they just cannot compete and after returning to them from a long break where I tried out a lot of the competition it strikes me even more now just how badly run they are. May this departure be the start of a flood of departures.
We're ready to see more leadership shakeup at AA. Let's kick out these under-performing execs. It will be interesting to see who they hire to replace Vasu Raja. Maybe AA can then resume their campaign of 'Going for Great' they had quietly dropped.
I hear that Arik De is one of the top candidates in the search for a replacement CCO! Maybe Ivander can vouch for him and all the successes that he's had at EY, TP, AM, D7 and WS?!?
have seen AA with a diffrent mindset. Vasu strategy has been great. However I truly believe the managment down the line which have been removed now had dented AA. Putting a real example. The Bengaluru SFo flight didn't started for 2 years and AA were spending lot of money on retains the staff for 2 years. Till today having a Delhi Newyork flight in place they have a Sales Manager based in Bengaluru, which really...
have seen AA with a diffrent mindset. Vasu strategy has been great. However I truly believe the managment down the line which have been removed now had dented AA. Putting a real example. The Bengaluru SFo flight didn't started for 2 years and AA were spending lot of money on retains the staff for 2 years. Till today having a Delhi Newyork flight in place they have a Sales Manager based in Bengaluru, which really does not make any sense. The travel cost of the staff to Bengaluru and Delhi is approx 1000 usd per month. Till today she is based in BLR only. an ex MD who was based in London was even approving fake bills for the managers. Such practices should also be stopped. I again say Vasu strategies to bring revenue were out of the box. Just imagine an airline making profits with a co branded credit card. That's Vasu.
There is something I don’t understand I recently flew premium Bue Nyc London and the service between nyc and london ( only 8 hours) was far superior to Buenos Aires JFK (12 hours) nyc to london fruit and snacks between the aisles in C and two meals from bue all in one tray?? Delta is far superior in the South American routes
Why is this difference ?
SEA not SFO
The SEA-BLR route was one of the more harebrained ideas from an airline who barely launches ULH routes.
USA-BLR is overwhelmingly centered around two markets (SFO and NYC), both of which being UA longhaul strongholes; guaranteeing a response from a more competitive base, all while AI was already on the route.
Even without the Russian air space restrictions, they were going to get their behinds handed to them on this.
Unless the flight was...
The SEA-BLR route was one of the more harebrained ideas from an airline who barely launches ULH routes.
USA-BLR is overwhelmingly centered around two markets (SFO and NYC), both of which being UA longhaul strongholes; guaranteeing a response from a more competitive base, all while AI was already on the route.
Even without the Russian air space restrictions, they were going to get their behinds handed to them on this.
Unless the flight was being privately underwritten, why tie up two 787s on such nonsense?
This is demonstrably false both in the airline/aviation sector and others. If anything, I’d argue that Americans - who gave us tipping culture and the famed “customer service” of Walmart, Frontier, virtually every US telecommunications provider - could learn something about customer service from Indian companies.
Actually ‘tipping’ started in Britain when guests visited manors they have butlers and footmen schillings . When travel became common in 1800s tipping spread to the USA but banned in several states . Eventually it died out in Europe when minimum wage laws went in to effect. In the USA it becames policy when the restaurant associations got government to set a lower tipped minimum wage.
No tipping started after civil war restaurants did not want to pay blacks so if they did a great job the white former slave owner might tip a penny
Hopefully, we can see new flight attendants uniform that look better than my motor mechanic's work garb soon.
Wishful thinking. Cabin crew recently got a new uniform (current faded blue), after a major fiasco with the previous new uniform (office grey). My guess is it'll be at least another 15 years, or more, before the cabin crew gets a new look—but it won't matter how "classy & stylish & modern" the new uniform may be 'cause they will wear it whichever way they please.
I will fly more than 120,000 miles this year, and the product matters to me. I used to be Executive Platinum, because AA hit my sweet spot of hard product, soft product, and loyalty program. Now, I hardly ever fly them, preferring foreign carriers, UA, DL...and even B6 if I ignore their ground experience. And while I don't ever get to the highest FF tiers, I am low-to-mid-tier in five programs. Imagine what my flying...
I will fly more than 120,000 miles this year, and the product matters to me. I used to be Executive Platinum, because AA hit my sweet spot of hard product, soft product, and loyalty program. Now, I hardly ever fly them, preferring foreign carriers, UA, DL...and even B6 if I ignore their ground experience. And while I don't ever get to the highest FF tiers, I am low-to-mid-tier in five programs. Imagine what my flying habits would be, if one airline again hit that sweet spot.
For me, two good places to start rehabilitating AA enough so I will again fly them more, would be to become a ThankYou transfer partner and making more premium award seats available at a decent cost. It may seem counterintuitive to AA's execs, but I buy revenue seats on airlines that do allow credit card transfers. I then use miles for other flights. The mix winds up being satisfying to me, and I assume to the airlines.
I don't need showers or caviar (as nice as they might be for a splurge). In general, a truly useful loyalty program, a long-haul business class with flat seats and comfortable bedding, food that's on par with a good — not necessarily gourmet — restaurant, genuine service from kind human beings, IFE with a satisfying selection, and yes, a decent route map, are incentive enough for me.
As a CK all I can say is GOOD RIDDANCE. Absolutely the worst leader at AA and I can’t rejoice his departure enough. Not a minute too early - loooooong overdue.
What an over exaggerated growth plan for Austin. With intentions to build not one but two lounges- sponsoring UT Athletics and then failing to grow with excuses. Shameful!
Them the stupid move to force all bookings to bypass agent sales! Shameful!
I am told 'Ivander Sebastian' is keen to apply for the open CCO role...
https://onemileatatime.com/news/etihad-executive-fake-linkedin-profile/
Another Company officer " seeking other opportunities" with a Golden Parachute to float away on.
He doesn't have a golden parachute per the latest 10-K. He also doesn't have a non-compete
Wow. I mean I get it but he did have the wunderkind vibe. I think AA is an impossible bloated hog of an airline that can’t earn its cost of capital back. I am also a longtime user of the product because of the network and the loyalty program. See? Vasu was right at least in my instance. I never thought he was wrong with his strategies. I just think AA is a toxic dumpoid mess.
He will be headed to a foreign carrier as CEO. My bet.
I was thinking he could do well at a low cost carrier like Spirit or Frontier. He can sure help them with their bottom line. If you are thinking of a foreign carrier maybe IndiGo, Ryan Air or Veuling??
Foreign to the US? Meaning a non-US carrier? Remember the US is not the world, and in fact by supporting the live-streamed slaughter in Gaza is distancing itself from the entire world (other than Israel and northwest Europe).
Thanks for the preach, Francis.
I thought "Vasu Raja" was some sort of venereal disease ("you need to get some antibiotics on that vasu raja or it's really going to hurt when you pee") so thank you for enlightening me.
Well, thanks (?) for sharing with us your ignorance and white supremacy.
Better for us to know you're a bigot than for us to presume falsely that you, on a travel blog full of people who like to expand their horizons, remain narrow minded.
Thank you! I think you are Funny.
Well we just found the dumbest, most bigoted comment of the day. Likely from someone who is intimately familiar with venereal diseases himself.
Sad that you’ve never left South Dakota
Chicken-or-egg?
AA has notoriously bad customer service. Is this a problem Raja caused? Or is it a problem Raja inherited and must deal with in his role?
If Raja caused AA to be anti-customer, then, sure, blame Raja.
But, if other company leaders let AA service levels decline, then Raja did the best...
Chicken-or-egg?
AA has notoriously bad customer service. Is this a problem Raja caused? Or is it a problem Raja inherited and must deal with in his role?
If Raja caused AA to be anti-customer, then, sure, blame Raja.
But, if other company leaders let AA service levels decline, then Raja did the best he could in saying, "Yeah we suck but we can get you from point A to point B on time."
And let's face it, under Raja, on-time performance increased dramatically. Raja pulled his weight.
That wasn't Rajas doing, that's under the COO, David Seymour
He's the only reason why AAdvantage hasn't been devalued.
I fully expect the comments section and Bens attitude to change in a few months.
That was my first thought. For better or worse, the lack of changes in the loyalty program to match 7-figure business class redemptions from UA and DL on alliance redemptions was a positive byproduct of inaction.
We're probably 12 months from "FULL DYNAMIC FOR ALL OW" with some profoundly insulting spin of "we heard from customers and they want this."
He lost track of the fact that the flight attendants are the public face of the airline. Inflight service has not kept up with AA’s competitors, awful food and an ancient soft product that needs updating. Happy FA’s = happy passengers. Their contract became amendable in 2019. Time for a raise.
On the contrary, American lost me with their abysmal new Oasis product seats they installed on their 737s, and are in the process of doing to their other domestic aircraft. The older seats on the 767s, 757s, A330s, and 772s (before densification) were definitely more comfortable. Don't disagree on the matter of food and inflight service though.
I'd also add that their international network has been poor
The problem is, AA has the surliest and laziest FAs of the Big 3. That shouldn't be rewarded.
A lot of factors had to do with this decision. Both DL, and now UA are killing AA in every single category and i hope that this is the beginning of a complete change and new direction into the future. I would love to see them grab Bret Hart from UA.
Oh and for a second I was thinking of the Bret Hart from WWE.
Vasu's philosophy of focusing on schedule and network can be highly successful in the right types of markets, but not across the board. Southwest is the best example here, flying an assortment of point-to-point routes that no legacies serve nonstop. Say what you will about WN's product, but I'll take a nonstop over a connection in DEN 7 days a week. AA doesn't serve these point-to-point markets, so their version of this relies on small...
Vasu's philosophy of focusing on schedule and network can be highly successful in the right types of markets, but not across the board. Southwest is the best example here, flying an assortment of point-to-point routes that no legacies serve nonstop. Say what you will about WN's product, but I'll take a nonstop over a connection in DEN 7 days a week. AA doesn't serve these point-to-point markets, so their version of this relies on small cities where their one-stop connections are materially better than others'. That pencils out for those markets, but it's a small pool. That philosophical focus also leaves them hanging in the ultra-competitive markets like LA and New York, where they have badly struggled. If you don't focus on product (not just hard product; on-time performance and customer service are probably the most important), then you're going to lose those 'tiebreakers' to UA/DL and others when competing head-to-head in a nonstop market.
What American has ended up with is a business model that tries to be good at everything, and ends up being great at nothing.
Looking forward, does AA need to be the top-tier business carrier in New York? Maybe yes, maybe no. If they want to prioritize schedule/network then they need to find a way to serve point-to-point markets nonstop like Southwest (while providing better service or lower fares).
Either way, my advice is this: Take care of the little things and the big things will take care of themselves. Running a clean operation buys you lower CASM and more customer loyalty. If you can't take care of the little things, even the best thought-out strategy is bound to fail.
Bye Felicia!
……hope his “vision” for AA’s soul is reversible……sooner rather than later.
Vasu Raja was behind closing of thousand's of Poor customers Advantage Accounts and blaming them for abuse and thus increasing American bottom line. With class action lawsuit looming against the Company for wrongfully closing Advantage accounts the Directors might have decided its time for him and others like him to go.
As stated before here is no style, no coherence, and no sense of a special trip when you board a Flagship flight in a premium cabin
First class service on the 300 is by no means a FC service. The seats are everything else is NOT. Only one flight attendant taking care of the customers the food and wines are embarrassing and pathetic. Guess they keep hiring in flight service non airline people that have no clue
Isom sucks as well and should be long gone
Bottom line is that his strategies have not been very successful. When you get to the top you either perform or you can count on being out.
AA's biggest issue is that it has a identity strategy. It's trying to emulate Spirit/Frontier on one end while being a full service carrier on the other end. And while the other two legacy airlines are also following this hybrid business model it's not to the same degree.
re identity
Yet United can do it. Delta can do it. The European legacies can do it. How/why is American the only airline who suffers from trying to hit two birds with the same stone?
Leadership or should I say... lack of leadership. The US Airways management has taken AAL down to the level of Spirit. AAL has zero identity and their business model going forward lacks innovation and creativity. AAL has alienated their business traveler in favor of a hybrid model which consists of a business/leisure traveler. In the end, this strategy will be a huge issue for AAL. Additionally, they have many airline miles on their books...to flight...
Leadership or should I say... lack of leadership. The US Airways management has taken AAL down to the level of Spirit. AAL has zero identity and their business model going forward lacks innovation and creativity. AAL has alienated their business traveler in favor of a hybrid model which consists of a business/leisure traveler. In the end, this strategy will be a huge issue for AAL. Additionally, they have many airline miles on their books...to flight crew members...keep pushing those credit cards
Chicago frequent fliers rejoice! He single handedly destroyed ORD.
How so?
No, he didn't. Chicago did that.
Only exec without a non-compete. However, considering the internal messaging, I suspect 1 of 2 things: he’s leaving for a competitor and the sabbatical and remote work were attempts to make him stay. Or he has serious health issues (or a close relative with serious health issues) to deal with
Best case for AA is that he DOES compete and goes and ruins one of their competitors the same way he ruined them. This guy is a joke. Good riddance.
Now Islom and Parker the bigger of the jokes need to go and this usair shit!!
I think the 2nd one is highly unlikely, as AA would have included some nice things to say about him.
Let's enjoy the peace in the comment section while the people brining Tim Dunn every time and possibly himself aren't here yet.
And yet here you are the first to mention Voldemort…?
Besides. I don’t think any of us want to “brine” poor Tim. He’s salty enough as it is
Something to note is in the company's most recent 10-K, it was mentioned Vasu was the only named executive without a non-compete, but also no "golden parachute"
If only the Board would send Isom along too that would indicate some competence, something AA has lacked since the merger.
Merger. Hahahahhaah !!!
USAAir take over !
I have nothing against Vasu personally, but the AA Flagship J and F product, both transcon and internationally, have really suffered under current leadership. There is no style, no coherence, and no sense of a special trip when you board a Flagship flight in a premium cabin. You get a flimsy paper menu in a hard-to-read font, and by the way, the 1990s called and they want their cuisine back.
And the menu almost always is not what the caterer loaded. So it’s back to - chicken or pasta with sauce. Unbelievable stuff. And the $6-$8 - and I am being generous here - wines in business after paying $2400 for coast to coast “flagship”. Oh and the debacle with the CK renewals this year - they wanted $10k cash. Man. They have really lost the plot line. And Vasu was the author.
All I can say is HALLELUJAH!!!! Hope that we get our "old" AA back
Starting with reversion to the old livery! Pray Jesus!
Nahh i like the new logo and paint.
They can try to emulate it, but the days of polished metal are gone, if for nothing other than modern aircraft.... not being (primarily) made of metal.
From your lips to God’s ears!
@Olga Ramudo, I like your sentiment but I'd be curious to see what version of 'old' AA you would like to see again. It's been horrible for a while, at least since Carty/Arpey.