Transport Airlines

At American Airlines A Cultural Revolution Has Begun

Dec 14, 2013 3:00 pm

Skift Take

Doug Parker has a huge job on his hands to try to change the attitudes of workers who’ve been doing things their own way, sometimes for decades. In comparison, integrating fleets, loyalty programs and reservations systems may be the easy part.

— Dennis Schaal

Win an All-Expenses Paid Trip to NYC to Tour the Future of Travel

Paul Moseley  / Fort Worth Star-Telegram/MCT

Bob McCooey, Jr., left, NASDAQ Senior Vice President, and CEO of the American Airlines Group Doug Parker holds up a ceremonial crystal presented by NASDAQ to the bell-ringer, as hundreds of employees of the new American Airlines gather at the company's headquarters near DFW Airport to remotely ring the NASDAQ bell after the merger of American Airlines and US Airways, Monday, Dec. 9, 2013. Paul Moseley / Fort Worth Star-Telegram/MCT


Gone are the reserved parking spaces in the garage at American Airlines headquarters.

Jeans are now allowed in first class when an employee is using a freebie ticket to travel.

And the security officer who used to guard the executive offices on the sixth floor has been removed.

These are a few of the small changes that American’s new executive team has made at the Fort Worth airline in the first week on the job.

“We’re all in this together,” new CEO Doug Parker told employees at a town hall meeting Monday, the day his carrier, US Airways, merged with American. “I don’t have a [parking] spot, either.”

A shift in culture is occurring at Amon Carter Boulevard, and it goes beyond the parking garage.

On the new company’s first day, framed posters were already hung on the walls of headquarters that were essentially open letters from Parker discussing the new American’s commitment to safety, customers and employees.

As Parker and his team face the daunting task of integrating two airlines with hundreds of different employee and customer policies, there is uncertainty in the air. But there is also a determined focus to get employees excited about the new American and to get the two airlines to work as one.

“We have to engage our employees … engage them and keep them informed about what is going on,” Parker said at the meeting.

Overcoming “tribal” feelings at airlines, however, is not as easy as putting up a few posters or holding an employee rally, Hudson Crossing analyst Henry Harteveldt said. Decades of cultural differences need to be bridged, he said, describing American as more traditional and US Airways as more transparent and less formal.

“Doug Parker and the other senior executives are going to have to gain or regain the trust of everyone from midlevel to lower management to line workers on all sides,” Harteveldt said. “You don’t want to have people saying, ‘I’m ex-US Airways’ or ‘I’m ex-American.’ You want people to say, ‘I am American Airlines.’ ”

Old American and old US Airways

Under CEO Bob Crandall in the 1980s and 1990s, American projected a professional, corporate image to its customers, with flight attendants in businesslike pinstriped serving smocks.

In an interview last week, Crandall said his management style was methodical. He described the culture as “very buttoned-up” with “very rigorous analysis and very decisive action.”

Parker, who worked in the finance department at American under Crandall, remembers the conservative business attire worn by most employees at headquarters.

“It was a white shirt in a blue suit and a red tie, and that’s what you wore,” said Parker, who jokingly chastised headquarters employees at the town hall meeting Monday. He said they were underdressed for Crandall, who was there to celebrate the merger.

US Airways, which took on much of the personality of America West Airlines when the two merged in 2005, holds plane pulls for employees. Every quarter, it gives 10 employees $10,000 when their names are drawn, based on submissions by customers who have received service “above and beyond.”

Then there’s the Halloween costume tour by all the top executives, including Parker, who just happens to celebrate his birthday on the spooky holiday.

US Airways President Scott Kirby, who holds the same post at the new American, has dressed as a woman so many times for the Halloween event — Katy Perry and Lady Gaga — that at this year’s media day, he walked onstage to Aerosmith’s Dude (Looks Like a Lady).

“Fair enough, the Halloween thing might be a little out there,” said Parker, who lip-synced and danced to the YouTube sensation What Does the Fox Say? while wearing fox ears and tail at US Airways headquarters this past Halloween.

He got more laughs as Psy performing Gangnam Style in 2012.

Is change necessary?

Parker said the cultures at the two airlines aren’t as different as they appear. While he understands that American’s structure and process will be helpful during the integration, he also knows that the new airline needs US Airways’ transparency.

“What we bring, that somehow has gotten lost there, is being more open,” Parker said. “It’s not that they’re not. It’s just part of who we are. … I think the organization needs it certainly at a time when you’re trying to integrate two companies.”

The relationship between management and rank-and-file employees soured during the past decade at American. In 2003, after union groups took wage and benefit cuts, executives received bonuses. The anger among employees led CEO Don Carty to step down.

Tensions flared anew when the unions were starting contract negotiations and executives again received large bonuses in 2006.

While American was in bankruptcy, the management team first pursued a stand-alone restructuring plan. But in April 2012, American’s three biggest unions teamed with Parker and US Airways, signing conditional labor agreements and publicly campaigning to convince creditors that a merger was the better route.

“There is a certain amount of ‘grass is greener on the other side,’ so it will be up to the new management team to prove to employees that it wasn’t wishful thinking,” aviation consultant Robert Mann said.

Before the merger, American had already unveiled a new livery and logo for the first time in over 40 years. While that has helped American look more modern, Harteveldt said the new image needs to be more personal.

“American needs to be seen as a warmer, more human airline,” Harteveldt said. “The culture needs to be one where, like Southwest and like JetBlue, you can have the personality and humanity shine through and there is still a level of professionalism that is expected.”

Elise Eberwein, American’s new executive vice president of people and communications, said she understands that persuading 100,000 employees to feel as if their opinions matter and that executives listen to their concerns is critical at the new American.

Executives plan to meet with employees regularly and to go to training classes to meet with flight crews.

“Nothing beats face-to-face communication,” Eberwein said. “You have to get [executives] out to where the people are. You can’t expect people to come to a website and read a memo and feel great about the company.”

A gradual culture shift

Matthew Jacinto, who works in the interactive-marketing department, said he has already noticed a more relaxed atmosphere in the meetings he’s had with the new management team.

“American Airlines had a reputation for a long period of time of being uptight and old-school,” Jacinto said. “It feels like [the new executives] are going to be more people-centric, a little bit more relaxed.”

Employees at American’s headquarters, however, seemed a little hesitant to question Parker at Monday’s town hall meeting.

He answered a few generic questions, such as the biggest challenge for the airline and what would happen to business units like the credit union. Then an employee asked the question that seemed to be on everybody’s mind: Would employees traveling on nonrevenue tickets be given priority based on when they checked in, as is American’s policy, or based on seniority, as is US Airways’ policy?

Parker said he didn’t have an answer yet but told workers “we will have the best flight benefits in the industry, because we should.”

The town hall meeting, attended by several hundred workers, will be the first of many. Parker said that every week, he asks executives what employee interactions they have had and what they’re hearing from workers about business operations.

Removing the security guard in front of the executive offices on the sixth floor was the most visible change so far at American’s headquarters. But the airline’s new team says there is more to come.

“People ought to know him and people should feel comfortable coming to his office and paying a visit, and they ought to feel comfortable asking him anything they want,” Eberwein said. “That’s the culture that we’ve got to create and we will create.”

Andrea Ahles, 817-390-7631 Twitter: @Sky_Talk ___

Tags: ,

Next Up

More on Skift

Rosewood’s Celebrity Curators Boost Web Visitation and Direct Bookings
Provenance Hotels Integrates Local Products to Elevate Guest Experience
Daily Travel Startup Watch: Gypsy Shack, ABL Solutions And More
Why You Should Consider Hotel Loyalty Programs