I’m back from vacation, and as tempting as it was to write up my trip report straight away thanks to a 14-hour delay to kick things off, there was news from while I was gone that I want to talk about first. American, now finally trying to fix itself, made some moves in the management ranks while I was on the beach. On the surface, it looks like an airline trying to take some actual action, but going just a little bit deeper, I don’t feel nearly as positive. Instead, this still looks like an airline that can’t make the big, bold moves it needs to make.
Having reviewed both a letter from Chief Executive Officer Robert Isom to his officers and one from Chief Operating Officer David Seymour to his leadership, this is what I believe to be happening:
- Chief Communications Officer Ron DeFeo is out after 11 years with his fiefdom being divided into three different areas:
- SVP Comms and Chief Marketing Officer Caroline Clayton takes over comms and now reports to Robert
- Caroline loses marketing to the commercial group which now goes with brand, advertising, and partnership to someone who will be hired under Chief Commercial Officer Nat Pieper
- Director Team Member Engagement Beril McManus will now report to Chief People Officer Cole Brown
- EVP American Eagle, Corporate Real Estate, and Government Affairs Nate Gatten is leaving for Apple, and his work is being divvied up three ways as well:
- Steve Neuman, Senior Vice President, Global Head of Government Affairs, will be in charge of government affairs and will now report to Robert
- VP Corporate Real Estate Amanda Zhang will now report to Chief Financial Officer Devon May
- SVP Regionals and Business Transformation Brandon Kahle will now report to David in ops
- SVP Technical Operations Kevin Brickner is leaving and will be replaced by John “Bendo” Bendoraitis who was COO at Spirit until, well, you know
- SVP Airport Operations Julie Rath and SVP Operations Planning, Analytics, and Product Management Anne Moroni will now both report to SVP Flight Ops and IOC JC Gulbranson instead of directly to David
- Chief Customer Officer Heather Garboden will stop reporting to both David and Nat and will now only report to Nat… she also gains reservations, contact centers, service recovery, and catering with VP Global Contact Centers and Service Recovery Kim Cisek moving to her group from ops where she reported to Julie Rath before
That was tough to keep straight, but on the surface, it makes sense. What is being stripped out of the communications group absolutely should not have been there in the first place. And why would regionals be combined with corporate real estate and government affairs? These are all just quirks of a structure that was put in place to fit with the people who held the leadership roles at the time (or to keep them away from people who held other leadership roles where the groups belonged). So, fine. But let’s go under the surface here to analyze this further.
Robert’s note acts like this is a tidal wave of change at a unique time. Specifically, the note starts off with this:
American Airlines is entering a defining moment.
In our centennial year, we have a rare opportunity: to build on the progress we’ve made, address the gaps that remain and position this airline for long-term success. We reflected on the importance of this moment at Journey earlier this year – and previewed a bold strategy to carry us forward into our next 100 years.
What are we even talking about here? The defining moment was more like a defining last decade when American defined itself as an underperforming, cost-focused network carrier. Maybe this is a re-defining moment, but this move isn’t a bold one that redefines the airline.
But according to Robert’s letter, it’s not just a defining moment. This is a “rare opportunity.” How so?
American has had the same opportunity for years, but it has been slow to act, or even to re-act. Maybe it’s rare because it’s Robert’s last chance before the board actually does something more dramatic? This all just sounds like worthless fluff to me. But that’s just the tone of the letter. It doesn’t mean there isn’t any substance.
The big winner here is Heather Garboden, and that is the most promising part of these moves. She was given the hardest job in the company, having to serve two masters in both ops and commercial, while representing the customer that American didn’t really care much about before. Now, she is firmly part of the commercial team, and she is controlling more of the pieces that should fall under the customer group. On top of that, she is now joining the senior leadership team which means *gasp* the person advocating for the customer actually has a seat at the table. Finally.
While Heather’s gain is also a gain for the traveler, the three other lesser winners are wins mostly for their own benefit. JC Gulbranson (who takes over a bigger chunk of the ops world under his fiefdom), Caroline Clayton (who takes comms over but loses marketing), and Steve Neuman (who moves up the ladder) also all join the senior leadership team.
That winners list should also include Bendo who obviously gains since he went from unemployed at Spirit to being gainfully employed. He joins Matt Klein who according to his LinkedIn profile has very quietly moved down from his Chief Commercial Officer job at Spirit to VP of Pricing at Southwest. But while I am very wary about putting anyone who was in charge of Spirit’s failed commercial strategy into another important commercial role, I don’t feel the same way about Bendo who by all accounts can run an operation.
So why aren’t these ops moves also big winners in my book? It’s because the people at the top of the operation are still there. Robert and David own American’s operation and have for years. You can move people around under them, but without change at the top, well, it’s incomplete. Then again, being incomplete inexplicably appears to be by design.
American never seems done acting like it’s trying to reinvent itself, but the airline doesn’t usually telegraph the fluidity of its organization as clearly as it did in Robert’s memo:
The changes I’ve outlined here are important, but they are just the first step in a series of actions designed to strengthen our team, foster greater alignment and act with greater urgency across the enterprise.
You would think that death by a million cuts wouldn’t be ideal here, but well, that’s how I read this.
So maybe David Seymour’s time is running short, and his retirement is coming. In this move, we see him lose his partial control over the customer group which has also taken reservations away from him. Further, two of his direct reports are now under JC Gulbranson, and there’s a new former airline COO to run tech ops. It sounds like JC and Bendo will be competing to succeed David at some point.
If that happens, I’ll have to think about this differently, but for now, this group remains under David’s control, and finance remains under Devon May. Devon’s organization was barely touched in this move, but he has been one of the strongest champions of cost control which would seem to go against the direction Robert wants this airline to go. You have to spend money to improve revenue.
All of this meaty change, however, is speculation. What has been announced just feels like another reorg. A spokesperson tried to make it clear to me that all of these people leaving the company are doing so on their own. I know that’s how things work in a company when you’re at a certain level, but it makes it seem like these moves are just Robert reacting to decisions the people under him are making to flee the company.
If Robert was serious about sending a message that things are going to be different, he should have made it clear that he is driving this change, and some other heads should have rolled. Then again, that should have happened years ago. He should have made all the big changes at once, and then he should have put serious effort into calming the frayed nerves of the long-suffering employee groups. We didn’t see any of that. Instead, we’ll just have to sit and wait to see what’ the next move at the airline will be’s next.
