American Airlines Shuffles Top Executives as Damage Control Begins




 

On the heels of the announcement from American Airlines that its leadership expects its Boeing 737 Max aircraft to return to service in mid-January 2020, the airline will also shuffle a variety of top executives as a sign to Wall Street that it's sorting out its myriad operational issues.

Kerry Philipovitch, American Airlines' senior vice president of customer experience, will retire from the company at the end of the year. The company will also realign its commercial operations geared around four pillars: operations, network, revenue, and customers.

David Seymour will become senior vice president of operations, Vasu Raja has been named senior vice president of network strategy, and Don Casey will assume the role of senior vice president of revenue. Kurt Stache, formerly vice president of marketing, loyalty, and sales, will become senior vice president of customer experience.

Nearly a dozen other executives have been shuffled to report to this new management structure.

"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," said Robert Isom, American Airlines' president, in a release. "This restructure puts innovative and extremely capable leaders at the forefront of these initiatives."

Isom also penned a letter regarding the changes to American Airlines employees, which you can read below.

These four pillars are clearly geared to assuage investors that American is taking criticism seriously that the airline's operations and reliability have lagged behind that of its competitors.

"This announcement highlights the mounting pressure the American management team is feeling," said Jay Shabat, senior analyst of Skift Airline Weekly. "But if reliability doesn't improve soon, there may be more changes to come."

The airline also released an investor update on Wednesday detailing its efforts to turn things around in the third quarter despite major headwinds. The airline expects that the Boeing 737 Max debacle will end up impacting its income by $140 million, for instance, while disruptions from Hurricane Dorian isn't expected to drag on its guidance for the quarter.

American also predicts a $280 million charge from special items related to retiring its E190 fleet and various other restructuring efforts. While its guidance for the quarter remains similar to what was expected in July, the outlook still isn't great when compared to its peers in the U.S. aviation market.

As Skift Senior Aviation Business Editor Brian Sumers wrote in September, American Airlines' issues go beyond a complicated labor situation and fallout from the Boeing 737 Max groundings. Competitors like Delta Air Lines have been more adroit at facing operational issues, putting American at a disadvantage.

One has to wonder if a management shuffle will empower its leaders to solve these lingering issues or lead to even more challenges as executives operate inside a new framework.

Download (PDF, 94KB)

Subscribe to Skift newsletters covering the business of travel, restaurants, and wellness.

COMMENTS

More Related News

Boeing Strips CEO of Chairman Job as 737 Max Crisis Drags On
Boeing Strips CEO of Chairman Job as 737 Max Crisis Drags On

(Bloomberg) -- Boeing Co. stripped Chief Executive Officer Dennis Muilenburg of his role as chairman, leaving him little margin for error in his final push to resolve the crisis engulfing the company's 737 Max jetliner.Separating the CEO and chairman roles will let Muilenburg focus on getting the grounded jet back in the air, Boeing said in a statement Friday. While the board expressed its continued support for Muilenburg, it pledged "active oversight" of his performance, a sign of the pressure he's under to surmount regulatory hurdles and soothe the safety concerns of customers, pilots and passengers.Lead director David Calhoun, a senior executive at Blackstone Group Inc., will take over...

Boeing splits CEO, chairman role amid MAX crisis
Boeing splits CEO, chairman role amid MAX crisis

Boeing unveiled a shift to its leadership structure on Friday as it manages the 737 MAX crisis, announcing that Dennis Muilenburg will remain chief executive but step down as chairman. The company said splitting the roles would allow Muilenburg to focus full time on running the company "as it works to return the 737 MAX safely to service" while ensuring full support to customers sharpening Boeing's focus on safety. "This decision is the latest of several actions by the board of directors and Boeing senior leadership to strengthen the company's governance and safety management processes," it said in the statement.

Boeing board strips CEO of chairman title amid 737 MAX crisis
Boeing board strips CEO of chairman title amid 737 MAX crisis
  • US
  • 2019-10-11 22:30:50Z

Lead Director David Calhoun, a senior managing director at Blackstone Group, will takeover as non-executive chairman, Boeing said on Friday, adding that the board had "full confidence" in Muilenburg, who will retain the top job and remain on the board. Boeing has been struggling to put its

FAA must ramp up staffing to oversee airplane certification after 737 MAX: panel
FAA must ramp up staffing to oversee airplane certification after 737 MAX: panel
  • US
  • 2019-10-11 16:34:14Z

The U.S. Federal Aviation Administration had insufficient personnel to oversee the certification of new Boeing airplanes and should make significant reforms in how it approves new airplanes, an international aviation panel said Friday. The report also said the FAA did not closely evaluate a key safety system known as MCAS involved in two fatal crashes of the MAX in five months that killed 346 people and prompted the plane's grounding in March. FAA Administrator Steve Dickson said Friday the agency would respond to all recommendations in the "unvarnished" review.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.