Skift Take

American Airlines CEO Doug Parker is out come March. While not everyone agreed with his decisions, credit where credit’s due: He built and led the world’s largest airline, changing the industry in the process.

American Airlines on Tuesday made it official. CEO Doug Parker will retire from his role on March 31, and be succeeded by his longtime deputy, President Robert Isom.

The move will end Parker’s nearly 20-year run at the helm of a U.S. airline, including America West and US Airways, and bookended by crises: 9/11 and the Covid-19 pandemic. Parker, along with then-deputy Scott Kirby — now CEO of United Airlines — orchestrated the merger of American and US Airways in 2013 that created what remains the world’s largest airline to this day.

The news comes a little surprise to those in the industry, as the airline has been working on Parker’s succession plan for years.

“While we still have work to do, the recovery from the pandemic is underway and now is the right time to make the transition,” said Parker in a letter to staff on Tuesday. He called being CEO of American the “best job in all of commercial aviation,” and praised Isom’s team building and operational prowess.

The CEO transition at American is the fourth major leadership change at a U.S. airline since the Covid-19 pandemic began. Kirby took over as CEO of United in May 2020, just two months after the virus all but shut down air travel. Alaska Airlines CEO Ben Minicucci stepped into the top spot when Brad Tilden retired at the end of March. And Southwest Airlines CEO Gary Kelly will pass the reins to Bob Jordan at the beginning of February.

Isom takes over an American still recovering from the Covid-19 pandemic. The latest challenge, the Omicron variant, has slowed near-term traveler demand though the industry remains bullish on a strong Summer 2022 travel season. On top of that, American has faced challenges with staffing — particularly of pilots — and operational reliability as it has ramped up flights.

“It’s about making American the best airline in the business,” Isom said of his plans in an interview with Skift. This includes building on the route map and partnership changes that the airline has made during the crisis, including its controversial new alliance with JetBlue Airways. He added that American has cut $1.3 billion in costs from airline since 2019.

Asked of the Omicron variant, Isom said it does not change his or the airline’s plans. “Anything that restricts travel has a dampening impact. But it will just delay [the recovery] — people want to travel,” he said standing by previous comments about robust pent-up travel demand.

While Parker is rightly credited with creating the American of today and changing the U.S. industry, he also faces some criticism for his tenure at the airline. Some say American is a more mediocre carrier in terms of quality than it was when he took over, for example the carrier added seats to many of its narrowbody jets and removed personal entertainment screens on those same aircraft. And, despite initial support from labor unions for the merger, Parker has been at odds with many of the groups, including pilots, flight attendants, and mechanics, for much of his time as CEO.

The transition likely would have occurred a year ago if it was not for the pandemic, said Parker when asked in an interview. After the merger in December 2013, he intended to stay until the integration was complete, which he said occurred when American and the TWU-IAM Association labor group reached an accord covering more than 30,000 maintenance and other staff in January 2020.

On his future plans, Parker joked he remains “gainfully employed” — as he put it at the Skift Aviation Forum in November — for the next four-and-a-half months. After that, he said he has nothing to disclose beyond remaining chair of American’s board of directors.

The transition to Isom is expected to bring about little change at American. He has worked as Parker’s deputy at the airline since 2016, but with Parker on and off since the mid-1990s. Isom either oversaw or was actively involved in many of the major initiatives at American during the past five years, including some of the changes that Parker is criticized for. For one, he has repeatedly defended adding seats to narrowbody planes despite passenger complaints.

UPDATED: This story was updated to include interview responses from Isom and Parker, airline leadership transitions, context on Parker’s tenure at American, and Isom’s background. Check back for additional updates.

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Tags: airlines, american airlines

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