A woman who was duct-taped to her seat on an American Airlines flight is facing a lawsuit from the Federal Aviation Administration.
29.05.2024 - 18:01 / skift.com / Vasu Raja / Robert Isom / Gordon Smith
The CEO of American Airlines has made his first public comments since it was announced that the carrier’s commercial chief is leaving the company.
Late on Tuesday afternoon, the Dallas-based airline said Vasu Raja would step down next month. News of his departure coincided with a downgrading of American’s financial outlook for the current quarter.
“We know we’ve dug ourselves a hole in this second quarter, and our operating earnings are going to be off by a couple of hundred million dollars. We’ve got a lot of work to do to recoup that,” said American CEO Robert Isom.
Speaking at the Bernstein Strategic Decisions Conference on Wednesday, Isom paid tribute to his outgoing colleague, but suggested that change was needed.
“I’ve known Vasu for a long time. I admire his creative thinking, his passion, he is an innovator and a disruptor. He’s a good friend. But sometimes we need to reset, and in this case, we do.”
Raja joined American in 2004 and has been in his current role since April 2022. No explanation for his departure was given in the American Airlines statement issued on Tuesday.
During Raja’s tenure, American consistently underperformed rivals Delta and United across multiple key metrics. In 2023, its operating margin, which is an important measure of profitability, was 8%, excluding one-off accounting items. Delta’s figure was 12%, while United’s was 10%.
The outgoing CCO oversaw American’s controversial direct selling changes to its ticket distribution channels. The move resulted in the American Society of Travel Advisors (ASTA) making a formal complaint about the carrier’s distribution processes.
Isom said that these changes are now under review, noting that the company, “moved faster than we should have and we didn’t execute well.”
The review represents a major U-Turn for the airline. Speaking at the Skift Aviation Forum last October, Isom appeared bullish on the strategy: “When you shop for American, you ought to be able to shop and get access to everything without having to go through a number of different routes [or sources of information],” the CEO said, arguing that its flyers shouldn’t “need a lot of intermediaries to tell them what’s available.”
However, Isom struck a much more conciliatory tone on Wednesday.
“We have to be better at executing those long-range plans. We have to be more attentive to the marketplace, we have to be more detail-oriented, and we have to go forward as a team and really make it easier for American [Airlines] to do business,” he said.
Acknowledging Raja’s disruptive, and sometimes controversial, approach, Isom stressed that the airline would continue to be bold in its decision-making. “I am passionate about executing, we will absolutely innovate, we will
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