American CEO Parker Becomes Latest Airline Chief to Exit – NBC 5 Dallas-Fort Worth
American Airlines CEO Doug Parker will retire in March and be replaced by current President Robert Isom as the airline seeks to rebuild after massive losses from the pandemic.
Parker, 60, has led Texas-based American since late 2013 when he was planning a merger with smaller US Airways. American announced on Tuesday that he would remain chairman.
In a video message released by the airline on Tuesday, Parker said the transition would likely have come sooner had it not been for the pandemic.
“I’m very proud of what we’ve achieved together, and I have no doubt that the best for American is still ahead,” said Parker, referring to Isom.
Isom, 58, has been the heir to the throne since he became President of American in 2016 after Scott Kirby was ousted and moved to United Airlines, where he now serves as CEO. Isom has overseen American’s business, including sales and pricing, and its alliances with other airlines.
Americans struggled with high numbers of canceled and delayed flights for most of the summer. The disruptions were largely due to staffing problems after Americans persuaded thousands of employees to leave last year, just to stay briefly when air traffic recovered from the depths of the pandemic faster than expected.
Greg Cosey is president of Transport Workers Union Local 513, which represents approximately 3,800 American Airlines employees. Cosey said he remained “cautiously optimistic” about the proposed transition, adding that he hoped the relationship between management and worker groups would strengthen.
“What I hope, of course, is that management will be more receptive to the voice of my members. We’ve had issues with the pandemic, the company’s response to the safety of my members, since the beginning of the year, “said Cosey. “Earlier this year, and certainly throughout the summer, there were also some operational concerns when we asked management to review our business operations and change the staffing dynamics.”
American posted $ 169 million in profits for the third quarter thanks to nearly $ 1 billion in federal pandemic aid, which covered most of the airline’s labor costs. Yet its debt surged to more than $ 36 billion as it borrowed to weather the worst of the pandemic. Airline officials say they will be able to pay off debts once business and international travel recover.
American faces other challenges, including a Justice Department lawsuit seeking to break an agreement with JetBlue Airways to work with JetBlue Airways to determine flight schedules and services in the Northeast. Relations with unions, particularly with pilots, have deteriorated under pressure from the airline’s operational shortcomings.
“In the past few years our airline and our industry have gone through a period of change, and with change there are opportunities,” Isom said in a prepared statement.
Parker, who will step down as CEO on March 31, said American is “well positioned to take full advantage of the recovery in our industry” after the travel collapse caused by the pandemic, “and now is the right time to make a handover. “
Parker is the youngest CEO of a major US airline to announce his resignation this year. In June, Southwest Airlines told Gary Kelly that he will be stepping down and longtime manager Robert Jordan will take over. Brad Tilden, CEO of Alaska Airlines, was replaced by Ben Minicucci in April.
Parker has served as airline CEO two decades since he became head of America West Airlines just days before the September 11, 2001 terrorist attacks. The Phoenix airline survived a decline in travel with the help of a federal loan.
In 2005, Parker was planning a merger with the larger but bankrupt US Airways, and he repeated the same strategy in December 2013 with American, which had just emerged from bankruptcy protection. Parker won the support of the American unions to lay off the management of the larger airline after the merger.
American is led by a close-knit group of executives – including Isom – most of whom have been with Parker since their America West days.
Isom was previously American’s Chief Operating Officer and held the same position under Parker at US Airways, where he was responsible for improving the airline’s on-time performance.