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Richard Anderson, who as Delta Air Lines CEO turned the once-laggard into one of the most consistently profitable U.S. carriers before stepping down in May, retired on Tuesday as the company’s executive chairman, effective immediately.
The move, announced after stock markets closed, came as a surprise, considering how little time Anderson spent as board chair. Anderson had been a board member since 2007, but did not become chairman until this spring when Ed Bastian replaced him as CEO. In a short announcement, Delta did not say why Anderson, 61, was leaving so abruptly.
The board named Francis S. “Frank” Blake, Delta’s lead outside director since May, as non-executive chairman. Blake, the former Chairman and CEO of The Home Depot, has been on Delta’s board since 2014.
While serving as Delta’s CEO, Anderson was revered by many employees, who respected his human touch, and by most investors, who appreciated his skills in turning around the airline. Anderson became Delta’s CEO in 2007, just after the carrier emerged from bankruptcy protection. The next year, he engineered Delta’s merger with Northwest Airlines, a carrier he led as CEO from 2001-04.
After the Northwest merger, Delta’s fortunes began to change, and what was once a mostly a regional carrier with a penchant for discounting became a major global player, capable of attracting high-value corporate customers.
As the airline shifted its strategy, investors began to flock to its stock. Delta is roughly the same size by many metrics as United Airlines and American Airlines, but its market capitalization of nearly $30 billion is about $9 billion more than American’s and about $12 billion more than United’s.
On matters affecting passengers, Anderson’s legacy was more mixed. Under his watch, the carrier amassed massive profits, some of which it invested in the passenger experience, with Delta more aggressively moving to retrofit aircraft interiors than some of its competitors. Delta is also the most consistently on-time major U.S. carrier, despite occasional hiccups, such as an August router failure that snarled flight for days. Some technology experts have argued that airlines, including Delta, have under-invested in IT.
Anderson also was in charge as Delta began to devalue its frequent flier program, charging many flyers more miles for free flights. Many frequent flyers have also complained that Delta has diluted perks for elite members of the SkyMiles program, who receive far fewer free upgrades to first class than several years ago. They’re also no longer guaranteed a chance to sit in the carrier’s extra legroom section for free.
In international affairs, Anderson was perhaps the most vocal U.S. airline CEO critic against the three largest Middle East airlines — Etihad Airways, Emirates Airline and Qatar Airways. In 2015, Anderson caused a controversy when, speaking on CNN, he appeared to obliquely link the foreign carriers with the terrorist events of Sept. 11, 2001. Delta later issued a quasi-apology — “we apologize if anyone was offended” — but Anderson never backed down from his argument that Etihad, Emirates and Qatar were unfairly benefiting from government subsidies.
Under Anderson, Delta also sometimes took positions that alienated it from United and American. While U.S. carriers compete on price, they generally lobby together through an industry group called Airlines for America. But last October, Delta unexpectedly left the group, with an airline spokeswoman saying “the $5 million that Delta pays in annual dues to A4A can be better used … to support what we believe is a more efficient way of communicating in Washington on issues that are important to Delta customers and employees.” Airlines for America has not taken a side on the Gulf airline subsidy matter.
Delta is now at odds with Airlines for America over a key policy issue. The group supports “meaningful” air traffic control reform it says would make the system operate more efficiently and improve on-time performance. It wants the government to separate air traffic control from the Federal Aviation Administration and turn it into a non-profit corporation.
Anderson, however, believed the FAA should retain control over air traffic control, at one point calling it an “an essential government function.”