Over the last week or so, we’ve seen announcements from just about everyone in the new American/US Airways leadership team talking about who will report directly to each of them. While the initial leadership team was primarily made up of US Airways folks, the split is now much more even in the VP/Managing Director ranks, as you would expect (and hope). I went through and created org charts for each one, only excluding some of the more transitional positions as I’ll explain. Here they are in no particular order. Though I will admit that I saved the most interesting for last.
People and Communications Group
On the HR side of the house, you can see there are a lot of American people in charge. I don’t know a ton about the HR functions at either airline, so maybe some employees have opinions to share in the comments. On the communications side, leadership is coming from US Airways and that is a good thing. But what I found even more promising was that US Airways has already snagged Chris Kelly Singley away from Delta to be the MD of corporate communications under John McDonald. I think Delta has one of the best corp comm groups in the business, and this moves shows that US Airways recognizes that and wants to improve on what it has today.
While Chris technically works for US Airways, it’s stated that she will “play a key role in combining the US Airways and American Airlines communications departments to support the new airline.” To be clear, this doesn’t mean she’s the only person reporting to John, but her position was announced in a press release while no others have been yet, so I figured I’d add it in here.
The ops group is so freakin’ big that I had to break it into two charts. In the first one, you can see that there is now one person in charge of the customer experience, as she is at US Airways today. But under her, it’s split between American and US Airways. The only one I know well is Tim Lindeman over reservations, and that is a good choice. I actually think the res teams do a good job at both airlines.
Then the ops team is broken down geographically to serve the airport functions. Each current hub VP will remain in that role (not on the chart). Internationally, there are two groupings and both leaders make a ton of sense. The person in charge of the monstrous Latin operation comes from American, as you would hope. Asia, Europe, Canada, and then oddly, Cargo get lumped in under Suzanne Boda from US Airways. Clearly Europe is the big dog here for US Airways and Suzanne runs that today from Philly where she’s based. I’m not sure why cargo falls under her as well, but Jim Butler from American is running cargo under her and he comes from American. Granted, he was in the commercial planning and performance group at American so I’m not really sure how that translates.
In the second half of the chart, you can see that the regional carrier leader comes from American. Dan Garton, the current president of American Eagle, however, is gone as was announced previously. Instead, the current cargo boss at American, Kenji Hashimoto, will take over. He has no regional experience from what I can tell, so this is a curious move. Under him, there are presidents of each of the wholly-owned regionals as there are today.
Someone who does have regional experience will be the guy running Air Operations for the airline, Tim Campbell. At least, he’s being brought in as a consultant initially but then he’s expected to move into that role after the merger is complete. He has a long history at Northwest and ultimately at its Compass subsidiary so I’m sure Robert Isom knows him well from his days there. Under Tim, Hector Adler will run the inflight service group, and I think he’s done an excellent job doing the same at US Airways today. Maybe some US Airways flight attendants will give their thoughts in the comments. The person who runs the operations center for American today will continue in that role. I don’t know much about him, but I’ll sure miss Bob Maloney, the man who has that role for US Airways today. You’ll notice I left out the VP Flight position (the man in charge of the pilot group). That’s because both the guys from US Airways and American will remain until the groups are merged.
Lastly, David Seymour from US Airways will lead the maintenance group with line maintenance being run by someone from US Airways and base maintenance being run by someone from American. I left out the engineering and quality roles because the people doing it today from both airlines will remain in their positions for now. I assume there will be a death match with the winner keeping the job.
I left out a couple of other positions on this chart because they are transitional. Paul Morell from US Airways is retiring as VP of safety, security, and environmental programs but they don’t have a replacement so he’ll hang around until they find one. Also, Ed Bular from US Airways will stay with the airline to get to a single operating certificate. He’ll leave when that’s done.
Finance is also a combination of people at both airlines. Honestly, I’m not sure that I have anything to add to this one. Hooray, finance.
I love the name of this group. It sounds half like a super top secret organization and half incredibly boring. No offense to those in the group, but it really leans toward the latter. It’s basically all the lawyers and lobbyists with a mix coming from both airlines. You’ll also see that labor relations falls into this group and that position will be filled by Al Hemenway, the man who does it at US Airways today.
Revenue and Marketing Group
I saved the most interesting one for last. This is what you might hear called the “commercial” group internationally, and it’s where I spent my airline career. You might be surprised to see the revenue management chief coming from American, but wait, the US Airways VP is sticking around for some time as well. Both will report directly to Scott Kirby. I think Tom Trenga may have the most cringe-worthy title in the organization – SVP Revenue Synergy Capture. That being said, it should be an important position. I don’t know how long he’ll hang around (but I bet it’s awhile) or what this means for sharing revenue management duties, but this is an interesting one.
Perhaps more interesting is what’s happening in the rest of the group. I’m a little surprised to see Andrew Nocella as chief marketing officer. I’m not surprised at all that he has schedule planning, alliances, and even digital channels (whatever that may mean) under him, but you won’t hear anyone suggesting that US Airways is a marketing powerhouse under him today. Then again, I don’t know that you’d hear anyone say that about American either.
But it’s not just Andrew. Fern Fernandez at US Airways will be running the global marketing team. Maybe Fern has just been hamstrung by a lack of budget at US Airways and he’ll actually be able to do great things at the new airline. I’m going to have to wait and see on that one.
Derek DeCross from American is going to stay in charge of sales. I was really curious what they’d do here, because American and US Airways seem to have a constant battle to see who has the worst sales team reputation in the US. I’m not sure if existing management from either side is going to fix that issue. I half-expected to see someone from the outside come in here, but I guess Derek will have his shot.
Let’s end on a good note. Suzanne Rubin will remain in charge of AAdvantage. This is a good move that everyone who cares about miles should be happy about.
So there you have it. If you’ve made it this far into the post, you probably work for the airline. If that’s the case, let’s hear your thoughts in the comments. Good? Bad? Ugly?
Can you describe in more detail what you mean with this comment: “because American and US Airways seem to have a constant battle to see who has the worst sales team reputation in the US”. Worse how, in making promises they don’t deliver, bad pricing, etc? It’s very unclear
EndlosLuft – From a sales perspective, both American and US Airways are difficult to work with. That means that sales support isn’t as good as at other airlines, and problem solving is weak. Dispute resolution is poor to non-existent. And they can be generally difficult to work with for all stakeholders in corporate and retail agency environments.
Don’t know about good, bad or ugly, but I will say over inflated with VP’s and SVP’s.
I know I would feel stupid and be embarassed if my business card said Vice President People. What a dumb title.
No wonder companies are messed up these days, way to many people between the workers and the top execs. Each of those VP’s will only care about their group and looking good for higher ups and not care for the good of all. And the poor saps at the top will decide how the company is run by what a bunch of VP’s tell them all who have their own personal agenda.
No wonder the bottom rung workers always say the people at the top don’t care about them, their are to many VP’s filtering out worker concerns/problems/etc so the top execs never get a clear picture of what is really going on in the company.
Hey, airlines are big companies it takes alot of work to get everyone on the same page. Plus there is probably so much on one plate that you need these layers of management so that there are enough people to make decisions.
Couldn’t have said it better myself!! VP of People is the most embarrassing and stupid “title” for anyone!. And the top has no idea what goes on at the bottom – which is the real problem – And yes, way TOO MANY V.P’s of this that and the other, all only concerned with how they look, how their “team” looks, and if they’ll get a bonus for their very often stupid, insane ,waste of money ideas!!. NO company, regardless of size, should have or “need” so many “chiefs”.
Re: VP People — is that really worse than VP Human Resources? Sure, employees are “human resources” but they are also people. Personally, I don’t give a scat about titles and don’t know why that’s even discussed.
As for the number of VPs — not sure these are all “needed” but it’s certainly silly to think there doesn’t have to be a layer or three between the CEO and the bottom of the pyramid if you have a company with 50-100k employees.
How about the old-fashioned “Personnel” department, a compromise between ‘people’ and ‘human resources’.
On yesterday’s earnings call, it was mentioned that US Airways was getting more Europeans onto its planes because of the work of its sales staff over there. This is at least the second quarterly call where that was mentioned. Maybe US’s sales staff isn’t as quite as bad as was hinted at in the piece?
Another interesting tidbit was the fact that US took a charge for INCOME TAXES. Now that’s big news.
Actually the income taxes thing isn’t the big deal you might think it is. I haven’t looked at the details, and accounting for income taxes isn’t my specialty, but it’s probably a combination of 1) AA’s old tax net operating losses being limited in the new USAA because of the complicated rules surrounding operating losses during an acquisition and due to AA’s bankruptcy, and 2) some change in expectations where the combined US expects to be sufficiently profitable in the future that it will use up whatever losses are available.
Sorry, us tax geeks don’t get too many opportunities to share our knowledge on the subject, so couldn’t resist :)
MeanMeosh – As I understand it, this quarterly tax charge has noting to do with AA. US, as still a separate company, had to take the charge because it’s still independent. Someone on the call (I think it was Parker) mentioned that US (once it merges) doesn’t expect to pay any income taxes for this year but had to take the charge off (I’m guessing because US still has to act as a stand alone company).
The US Airways investor guidance still shows some NOLs. So I’m not sure of the ultimate impact of any of this. But the mere fact that US management felt it had to take a charge for possible income taxes is the good news here. It means the airline has been consistently profitable. that’s an utter shock, given the history of airlines in this country. A company (or an individual) doesn’t have to pay income taxes if there’s no income.
Any clarification you can add or corrections you feel are necessary are welcome.
I read through the disclosure on the 10-Q, and what basically happened is my second suspicion. I won’t bore you with the details, but what basically happened was, as US was bleeding money and racking up NOLs in the past, their auditors told them that even though their NOLs have an accounting “value” since they offset future taxes, you don’t get to claim that value because you have no realistic possibility of ever using them. From the disclosure in the 10-Q, over the last few years, they have been gradually “reclaiming” that NOL value, which offsets the tax expense you normally compute. Well, now things have gotten so hunky-dory that there’s nothing left to reclaim, so you end up with a tax expense. Also remember, “income tax expense” on a financial statement often has no bearing to the actual income tax that ends up being paid to the government. US has $1.1 billion in NOLs, so it won’t be paying substantial federal income taxes for a while. GAAP requires you to book a charge, though, if you take accelerated deductions for tax purposes that will reverse in future years (in commercial aviation, depreciation is the big culprit), which is what probably generated it in the first place.
Your ultimate conclusion is correct, though – this is good news for US, as it shows that their future business prospects are rosy enough to generate profits for the foreseeable future.
Thanks for the insight and clarification. Parker did mention that the income tax charge was not a cash item. In any event, I’d like to see consistent profits become the boring standard of the airline industry. It certainly beats never ending bankruptcies.
While there are a lot of VPs and MDs, we need to remember that this will be the world’s largest airline and will employ upwards of 100,000 people! I don’t know about you, but a 1500-2000:1 employee to MD/VP ratio doesn’t sound too absurd to me. Looking forward to seeing what this team can do in the future!
The numbers may show a balance between AA and US people, in each group the head leader is from US. In other words, the top positions are 100% US Airways.
Sal, I also noted that move by Parker. What else could have been expected by him and the people at US AIR? If the mega merger happens it is questionable if that (top US AIR management) will be a positive for consumers.If it doesn’t work out I see a bleeding off of disatisfied AA loyalists, probably sooner than later.Let’s keep our fingers crossed if the merger is allowed.
Exactly. Parker, as CEO, wants his top managers from his team. Over time the bulk of the former AA officers will leave leaving the total management to US.
Will it work? Operationally US seems to be equal to or better than AA. However in people and product delivery issues US is actually worse than AA. If new AA management lets cabin service (especially among first and business classes) deteriorate to current US levels the whole “new” AA will crumble from within.
SAL – Which management team has never taken its airline into bankruptcy? Just a thought.
DessertGhost – true, Parker has never taken an airline into bankruptcy. But, neither did Horton – Arpey drove AA into bankruptcy.
SAL- true, Horton wasn’t the CEO, but he was part of the management team when AMR filed. In any event, he’s done a great job of restructuring AMR. Common stockholders recovering something from a bankruptcy is extremely rare. You’ve got to give Horton his due.
America West had a parallel situation. Bill Franke was a good chief executive during HP’s bankruptcy, but his style angered much of the work force. Parker was appointed on Sept. 1, 2001 and has been the right person to take the business forward.
I’m of the belief that airline profits will become the norm, not the exception, in the future. And much of the credit should go to Parker and other airline executives who pushed along the inevitable consolidation of the airline industry.
SAL – Unfortunately the IT group structure didn’t come out until today so I wasn’t able to include that one. And that has a former AA person at the top, so it’s not quite 100%. But yes, most of the senior leadership is from US Airways, as mentioned.
What’s up with the regional airline presidents under Don Casey? Typo?
Nick – Yep. That belongs under ops. I am erasing and fixing right now.
The focus on who gets which of the top jobs and which organisation they came from sounds to me like a belief in some sort of corrupt political patronage system. If such a system really exists, then the new airline has much bigger problems to deal with. I really don’t understand why it’s deemed such a big issue – I very much doubt that anyone cares today about who from Delta and Northwest got the top jobs when they merged.
As long as the company is well managed, is operationally efficient, manages the revenues well, doesn’t annoy the frequent flyers too much and has a good network when combined with Oneworld partners, then the airline has a bright future.
Hey David, I like your descrition of the top jobs placements. It fits well.
Well, who gets top jobs matter because their track record is indicative of if they will manage the airline well and efficiently. If AA was well managed they wouldn’t be where they are now. (Same with US before HP.)
David, of course if everything goes well nobody cares except for the people actually working in the company (which of course is important). However, if things don’t go well it’s an issue. Just look at UAL for an example.
UAL posted a decent profit for the quarter. So things may be turning around. On a parallel note, Union Pacific had a terrible time with its performance, both operationally and financially, following its merger with the Southern Pacific. Things turned around, of course, and the UP has been consistently profitable and well run for years. I’ll be very surprised if the same won’t be true about UAL.
Great post–breaks it down nicely.
There are some really imbecilic titles, though: “SVP Revenue Synergy Capture”? “SVP People”? These are moronic…
“People” as a department title is actually quite common today — it’s a less-corporate way to say “Human Resources” that gets to the heart of what the group is really about — people. I think it’s cool.
It tries really hard to be the anti-corporate, but it’s so fake that only a corporate department could come up with such a name.
I know what you mean Axelsarkis, they either spend months having meetings on when to have a meeting to pick a title or spent a million dollars to hire an outside company to come up with a title…lol
I despise the term “Human Resources” It makes people seem like they’re nothing more than another piece of equipment or financial resource. VP People is simple and to the point.
Well… HR is accurate.
VP People sounds like a corporate attempt to make people feel more valued.
SVP of Lower Level Wage Slaves is also accurate, that being said language affects how people think and how they make decisions. Naming the department that manages employees after People in some way instead of calling them a resource is powerful in how people think and act.
I agree that both “Human Resources” and “People” have issues as titles. I think “SVP – Personnel” would be better than either.
Yeah, but if you’re going for the dehumanizing aspect of HR you’re getting the same with Personnel.
IMHO the dehumanizing bit about HR is the Resources portion, not the Human part. Resources are things like planes, money, computer systems, offices, etc…
The organization chart looks like one from a Federal bureaucracy, or our local school board. Yes, there are a lot of decisions to be made in a big company, but the more boxes on an organizational chart, the more approvals up the line are needed.
When I had approval authority for international travel at a Federal agency, I asked the higher levels what criteria I should use. They did not even know of the regulation and obviously could not advise me. Chains of command should be simplified with associated cost savings.
“But it?s not just Andrew. Fern Fernandez at US Airways will be running the global marketing team. Maybe Fern has just been hamstrung by a lack of budget at US Airways and he?ll actually be able to do great things at the new airline. I?m going to have to wait and see on that one.”
Brett, there’s another possibility; perhaps Kirby wants to scale back AA’s marketing to the level he allowed at US? In that case, it’s much easier controlling people who are used to being hamstrung than to reign in people who’ve been allowed more budget and control.
I work @ US currently in a station management role. The “Operations Team” above is pretty good. Yes, Lindemann is great and Boda (SVP) and Paladini (VP – Stations) are charismatic, solid leaders. In fact, the latter two are pretty darn sharp. The issue at current US is, the stations are disconnected from anyone above the MD level. The MD determines SO much that goes on in the stations; in many cases over-riding the Station Manager/Director. So operationally (airport service-wise at the airport level), I’d like to see a chart of the Airport Ops MD’s. Some of the ones at current US are awful (AWFUL) and seem only in their roles to retire with flight benefits. Overall, none of this is a surprise and seems to be a fair split. For folks saying this is org chart is too vertical, take a look at United Airlines circa 1999 for a good laugh. :-)
Dave – Thanks for your thoughts. Do you know from your counterparts at American whether the system they have is better for station management?
Coming from AA Maintenance. My experience with HR is that VP’s, SVP’s, MD’s have no connection to the employee on the floor. Human Resources, People or Lower Level Wage Slaves are misnomers as to management’s job. It should be “Overseer of the Files of the Cogs in the Wheels that make the Corp Run. We are just a file to them and nothing more. AA doesn’t even have an office for the “files”, it’s all contracted out to someplace in RI.
RTR – It will be interesting to see if this changes after the merger or if the current situation just continues on since so many American people will be running it at the top. Come back and let us know what you think in a year.
Somewhat off-topic, but y’all might find the following post by Terry Maxon interesting, chronicling the history of the PHL-LAX route where the combined USAA has apparently agreed to a slot swap:
My wife and I planned to fly from Savannah, GA on Sunday to Cleveland, Ohio and fly my 93 year dad and mother, both with dementia. Father was under therapy and I arranged to continue his therapy but yesterday I was called that he has developed a blood clot and needs to be taken care of and that he can not fly. US Air was called and they are charging $800.00 for the cancellation. If we would fly against Doctors advice and he dies on your plane….that would be okay? What a heart you people have.
If you’re unhappy, you may get more help by contacting the airline itself rather than making a random comment on an unrelated blog post from a year ago.
Frankly, I’m not sure why you’re surprised by the charge. It’s not like cancellation fees are a new thing.
Welcome to the folks that just took over American Airlines. The worst is yet to come……..
It’s not coming – it’s HERE. Before the end of the week, I’ll be sending letters to the CEO, the COO, the SVP of Air Operations, and the SVP Customer Experience. The last two flights taken on AA have been fiascoes and the attitude at all levels contacted have been nothing but nonchalant at best.
Where does Beverly Goulet and Maya Leibman fall under the hierarchy?
glbetrkkr – Bev Goulet is the head of the integration so once it’s done, she’ll head off into the sunset assuming she doesn’t get another job. But she is part of the management team now. Maya is the CIO and presumably will remain that way for as long as she likes.
Call AA 800 433 7300: in less than 2 minutes you’ll be able to get someone (BTW you can access almost anything in their web site)
Then, call US AIR 800428 4322; you’ll be sent to an automatic message that says that due to traffic conditions you’ll need to call later. This is my 4th day trying with no success. Also in their site you can’t get to automatic receipts or even a complaint e-mail/forms. I called AA and they can’t even get to US Air CS associates.
The new leadership could turn out to be more balanced but I really hope they learn from AA.