What I would do in my first 100 days as the CEO of American Airlines

Of course we’ve all heard Richard Branson’s famous quote; ” the fastest way to become a millionaire, is to start as a billionaire and open an airline”. Well, most of us don’t have to worry about that but have you ever daydreamed about how you would run an airline if given the opportunity? You know I have!

Gailen International! Sure I like the sound of that, but I just can’t seem to stop thinking about American Airlines. It’s not in me to walk away from an airline that has such amazing resources including its people; especially when I believe the company’s current state is due to having the wrong team at the controls.

NOTICE: This article has resulted in legal action from American Airlines including a “contempt of court hearing” on September 5th in Ft. Worth, TX. Get details here

How would you run an airline? Artwork by RayDonDesigns.Wordpress.com

If I were CEO of American Airlines, here is a list of things I would do in my first 100 days:

What about the bankruptcy?

I would put a moratorium on all involuntary furloughs and changes to employee pay and work-rules, dismiss most consultants including Bain and immediately begin in-the-trenches efforts to repair the relationship between management and labor at American. Sure it can be done and there is $6 billion in the bank so this is time well spent; plus we’re saving massive amounts of cash now being saved by not paying consultants who know nothing about how airline people think.

Work would begin on a program to offer fair and respectful voluntary severance packages to those employees wishing to leave the company. I would work with all union and other workgroups to come to agreements on industry-standard work-rule adjustments that would deliver cost benefits and efficiency to the airline yet promote a high quality of work-life at AA.  I truly believe that there is a different way to approach dealing with labor at American and it starts with a change in the attitude upper-management has regarding the value and intelligence of front-line employees.

Culture shift campaign

A sweeping yet invigorating change to the corporate culture would begin taking place on day one that puts a new emphasis on taking care of the people that are American Airlines. The years of placing the employees behind shareholders and customers would come to a close as the employees would be given top priority so that they in turn will have the support they need to put the customers first. It works at Southwest Airlines and it is something American should have learned from Southwest and put into practice years ago.

Executive bonuses would be eliminated as they exist today and would be directly tied to the performance of the company including customer and employee satisfaction. If customers are not happy, there will be no bonus. If employees are unhappy, there will be no bonus. Now that’s an incentive to change the culture at American, don’t you think? I believe every Southwest employee would have approved bonuses for Herb Kelleher; so what’s to be afraid of?

Talk to the employees face to face

As the CEO of American Airlines, I would begin by planting myself in Dallas for a while. That’s right; no globetrotting around the world to hob-nob with the other oneworld airline CEO’s and the London townhouse would be sold off immediately. Meetings would be scheduled in which every employee would be flown out to visit the new American Airlines headquarters, with full pay, to meet with me in groups of 100.  I would have 2 of these meetings per day in order to see everyone and I can’t think of a more important use of a few hours each day.

Teams would be created that would address necessary changes in every department, made up of employees from every work-group that express a desire to get involved in reshaping the company. The difference this time will be that these teams will drive actual changes rather than create an illusion. The teams will be the foundation for the transformation that will take place that stretches from headquarters to the airplane and out to the curb and into the community. Employees will take part in a complete management redesign; maintaining only what’s necessary to allow front line workers to perform their duties and deliver a great product.

Any employee that wants to speak to me in person will have an open invitation to fly positive space to DFW to meet with me face-to-face and each and every executive at AA will be expected to be on-board and operate at this level or be asked to leave. As far as I am concerned, if someone would take the time to meet with management; they’d have to care about the company.

You’ll see the change everywhere

American’s headquarters would be open and inclusive

Many management offices will be eliminated since the way employees are managed at American will change; becoming less oppressive and much more streamlined. This will reduce the real estate costs at many airports around the country as well as getting remaining management out of the office and out in the field to work with employees to improve the operation.

At headquarters, CenterPort would be vacated at once and offices relocated to a much more economical space with a modern, open floor plan that promotes collaboration rather than isolation. My office would be in the center of everything because who would I need to hide from?

The people of American, from all work-groups and around the system, will be encouraged to visit headquarters whenever they visit the Dallas area as they begin to feel connected to American Airlines again. Yes, this could be a reality but only with change.

Let employees put their customers first

In a coordinated effort with all work-groups, a new compensation program would be put into place that would deliver substantial pay improvements to employees as American Airlines returns to the top of the ratings in on-time dependability, baggage handling, airport experience, in-flight service etc.. In other words, American would be put back into the hands of the people that built it in the first place and they’ll be entrusted to deliver what is necessary to make AA number one again. When that happens, they will be rewarded with compensation that is the best in the industry. In other words, I’d be saying “you make American #1 and you’ll be #1″. This principle was used at Continental and transformed the airline from a poor performer to one that ranked the highest compared to other network carriers.

At American, we would be putting ourselves up against every airline including the low-cost carriers which have  traditionally rated higher than legacy carriers like AA, UA, DL etc. But why not, with AA’s people back on-board how could we not win?

Do what it takes to keep the customer

As I continue through my first 100 days, employees will be given  all of the tools necessary to have every customer leave happy and return quickly. If a customer’s bag is delayed; baggage service employees will be able to make it right which may even call for providing the customer with a gift card to purchase the essentials until their bag is delivered. Employees will regain their sense of ownership in American that’s been lost over the years.

If a customer is inconvenienced, and it’s our fault, they will receive at least a partial refund or credit just as they do at Jetblue. Each and every employee will have the tools to make it right using their mobile phone and the customers PNR number and email address. What about misuse? That’s where the software comes in that manages flight delays etc., matching them with a passenger’s PNR and any credits or refunds that are issued.

Growing American

A merger is inevitable, but the people of American Airlines must be back on-board before any merger takes place otherwise the wounds will never heal. Plus, what about the possibility of a double mega-merger in the future that might possibly be better for both American and US Airways. Consider the possibility of American merging with Delta and US Airways with United or the other way around. Now go back and imagine an American Airlines/US Airways combination which would be lacking strength in both Europe and Asia and may very well not ever be able to compete effectively with Delta or United.

If American Airlines were to stand alone and grow internally and through purchases of airlines such as Alaska or Jetblue, the integration of the acquired carrier into the AA system would have to be handled differently than other mergers have been in the past. Mergers at American have notoriously resulted in the route structures of the purchased airlines being dismantled; therefore canceling out all the reasons the mergers were completed to begin with.

Do I think this could work?

Of course I do and I also know that I don’t have all the answers which is why some of the most creative minds in business would be tapped to help create something that works better for everyone. It all starts with recognizing that there is a problem and to stop blaming it on the people that make American Airlines fly. They are the only ones that can bring it back.

What do you think? Would you like to try running American?

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One Response to “What I would do in my first 100 days as the CEO of American Airlines”

  1. Debra August 5, 2012 at 10:04 pm #

    Not only do I think your ideas would work, they EXACTLY reflect the mindset that would bring AA from the bottom in terms of morale to an unstoppable force in the market. Back in the days when I thought I wanted to be in management I would answer interview questions with this approach in mind. (Wonder if that’s why I was never invited back for a second interview? LOL) Even though I am disillusioned, disappointed and disgusted with management I am still the (soon to be former) employee who stayed up until 3AM on a recent layover and paid $125 out of my own pocket (which I made SURE I got reimbursed for immediately, otherwise I never would have seen that money again, I’m sure) for phone calls back to the States to get a voucher on behalf of a customer who AA had stranded overnight in a foreign city. When one of the pilots on my crew commented that AA doesn’t deserve employees like me, I responded, no “they” don’t, but as far as I’m concerned I AM AA. Change starts with each one of us. The egos, insecurities and sheer bloodymindedness of current “senior” AA management makes the idea of changing the current culture seem insurmountable. I think if anyone can lead the way, Gailen, you can. You GET it. I am praying that eventually more people at AA will get it and that your vision will become reality.

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