American CEO to retire in latest airline reshuffling

The leader of the nation's largest airline announced his retirement Tuesday, becoming the latest chief executive of a domestic carrier to step down amid a pandemic that has scrambled the industry.

Doug Parker, will retire as chief of American Airlines on March 31, while staying on with the company as chairman of its board of directors. He will be succeeded by Robert Isom, the air carrier's president, American announced Tuesday.

The departure of Parker, 60, will bring new leadership to three of the nation's four largest air carriers since the start of the pandemic -- a period marked by intensifying competition among airlines. While coronavirus fears sparked a historic drop in air travel that has forced airlines into recovery mode, analysts say the latest round of transitions was largely expected.

In a letter to employees, Parker said the transition was part of a yearsong process that began when Isom was appointed president in 2016. He said the shift would have happened sooner if not for the pandemic. Parker has led the company since December 2013, and Isom, 58, has been American's president since 2016.

"The pandemic put the company in crisis, put the industry in crisis [and] we needed all hands on deck to ensure we got through it," Parker said in an interview Tuesday. "But now ... we're out of the crisis."

The emergence of the omicron variant has raised concern that the industry's recovery could be pushed back.

Parker said Tuesday that while omicron may slow the pace of recovery, he expects the effects to be short-lived.

Isom said in an interview with The Washington Post that navigating the pandemic has been a complicated endeavor.

"We're going to build on the fact that we've been able to size American appropriately -- and we're going to make sure we take advantage of those strengths that we have in terms of our network, our fleet and the efficiencies that we have brought to bear," he said.

TASK NOT COMPLETE

Julie Hedrick, national president of the Association of Professional Flight Attendants, a union that represents the carrier's flight attendants, praised Parker for leading a campaign for the Payroll Support Program in Congress to keep front-line employees on the job during the pandemic. But, she said, American's task of rebuilding is not complete.

"There is still much work to be done to restore our staffing and quality of work-life to pre-pandemic levels," she said in a statement. "President Robert Isom has witnessed our sacrifices firsthand, and we look forward to meaningful improvements as we all work to restore American to profitability."

The transition at American is the latest in the executive ranks at U.S. carriers. In June, Southwest Airlines announced longtime chief executive Gary Kelly will be replaced by Bob Jordan in February. United Airlines and Alaska Airlines also have installed new chief executives since the start of the pandemic. After March, only Delta Air Lines chief executive Ed Bastian will remain in the pandemic era among the nation's four biggest airlines.

Unlike previous executive transitions, the shifts were largely expected and the jobs were filled by longtime company insiders. Scott Kirby took over as United's chief executive in May 2020, replacing Oscar Munoz, who led the airline for four years. Ben Minicucci became chief executive of Alaska Airline Group in March, replacing Brad Tilden, who led the airline for eight years.

BUMPY WEATHER

Henry Harteveldt, a San Francisco-based aviation analyst, said Isom has work ahead to boost American as the industry grows more competitive during the pandemic.

"It's an exciting challenge, but right now, Isom and the board of American should be very scared that United and Delta are working very hard to capture the premium market and low-cost and ultra-low cost carriers are working hard to capture the more price-sensitive market," he said. "That leaves American in the equivalent of no man's land."

One challenge for Isom will be recovering from operational issues that forced American to pare back some recovery plans so it could better align its schedule with staffing levels.

In October, the airline canceled more than 1,000 flights, leaving passengers stranded during Halloween weekend. It took days to restore service, in part because of labor shortages.

Similar problems prompted American to remove nearly 950 flights from its schedule in July and offer bonuses to employees who either pick up shifts or who have perfect attendance during the holiday travel season. However, American's pilots, who are negotiating with the carrier over a new labor contract, rejected the incentives. The Allied Pilots Union also is at odds with American over the federal vaccine mandate. Union officials didn't respond to a request for comment Tuesday.

The carrier faces other challenges, including a civil antitrust lawsuit brought by the Department of Justice for an alliance it formed with JetBlue that focuses on operations in the U.S. Northeast. American, along with JetBlue, recently filed a motion to dismiss the lawsuit.

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