How Doug Parker worked his way from analyst to head of the world’s biggest airline
The case of Doug Parker, the affable CEO that’s be known to dress up as Psy for Halloween, will be a study for business courses when looking at CEOs that have relentlessly gone after what their businesses needed and succeeded.
The man who once said he never planned to be a CEO is expected to be put in charge of the world’s largest airline.
Doug Parker, 51, who has led the campaign to merge US Airways with American, has been tapped to lead the combined company as chief executive officer, sources said Wednesday. AMR Corp’s chairman and CEO Tom Horton will become non-executive chairman.
As the head of US Airways and previously America West, Parker has advocated for industry consolidation for years with failed attempts to purchase Delta Air Lines and merge with United Airlines.
But with the merger of American and US Airways, Parker will get his chance to create the nation’s pre-eminent airline, something he has been campaigning about for more than a year.
“We think we have an opportunity here to build the greatest airline in the world and restore American to the level that it was back when I worked there, when we were all so proud of the airline,” Parker said in an interview last summer.
Parker began his career at American as a financial analyst in 1986, where he met his wife Gwen, then a flight attendant, He since has worked at several airlines including executive positions at Northwest Airlines and America West. At 39, he was named chief executive of America West, 10 days before the terrorist attacks of Sept. 11.
As planes flew empty for the next few months, Parker lobbied Congress for an airline bailout and loan guarantees to keep his airline afloat.
In 2005, he merged America West with US Airways, which was facing liquidation in its second bankruptcy.
“I was drawn to the challenge of taking what I’d learned and using it to build something new,” Parker said in 2010 during a commencement address at his alma mater, Albion College in Michigan. “I never set out to be a CEO or anything close to it.”
As CEO of US Airways, he has tried to create a corporate culture that is focused on the employees and the customers of the airline. Parker says he makes the effort to spend time outside of the corporate headquarters several times a month to talk to front-line employees to find out how the carrier is performing.
And like his long-time mentor, Southwest Airlines founder Herb Kelleher, Parker has a penchant for dressing up for Halloween.
This year, he danced Gangnam Style in a powder-blue tux jacket with converse shoes as Korean star, PSY.
“He’s got a good sense of humor that keeps him from sweating the small stuff, so to speak,” Kelleher said during an interview last year about Parker. “He’s really kind of self-effacing and not at all egotistical.”
As the longest-serving chief executive in the airline industry, Parker has argued the industry would be in better financial health if there were fewer airlines with larger networks. A merger with American would put the combined carrier in the top spot, over United Continental and Delta, which merged with Northwest in 2007.
Although most unions at each carrier have agreed to temporary labor agreements in a memorandum of understanding, Parker faces the challenge of integrating the unionized workforces while also improving the operating performance and customer experience at the airline.
At US Airways, Parker has not been able to integrate its pilot groups, which have argued over seniority issues since America West and US Airways merged almost eight years ago.
But Wall Street seems to believe that Parker can overcome the labor obstacles and keep the new carrier profitable as American emerges from bankruptcy.
“US Airways CEO Doug Parker shepherded that airline out of bankruptcy, through a major merger that his company led, and all the way to strong revenue growth and convincing, sustainable profits which AMR can only dream about,” said Vicki Bryan, a bond analyst at Gimme Credit. “Mr. Parker also has accomplished more in a matter months with his collaborative management style to smooth previously intractable labor problems with AMR’s unions than AMR’s management team did in a decade.”
Last April, Parker signed conditional labor agreements with American’s labor unions that promised smaller employee-related cost cuts than the stand-alone restructuring plan that American had proposed to employees.
Since then, he has been relentless in trying to convince AMR creditors and bondholders that his plan to combine the two carriers made the most financial sense.
“We have an idea here that can create a stronger airline, take care of all the employees and also take care of the creditors of American Airlines,” Parker said last summer. “It would create an airline that is stronger than American is today that flies to more places and allows the customer.”