After a summerlong meltdown, American Airlines is shaking up its leadership to fix the damage done by months of operational mishaps
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- American Airlines announced changes to its management team, following the retirement of its senior vice president who oversees customer experience.
- The new realignment is organized around four "business pillars" - Operations, Network, Revenue, and Customer.
- The changes come as the airline has faced increasing pressure from shareholders and passengers to make changes, following a summer of poor operational performance.
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Following months of delays, cancellations, and outrage from its most loyal passengers, American Airlines announced a reshuffling of its executive leadership team surrounding everything that contributes to the overall experience of its passengers.The airline's current senior vice president of customer experience, Kerry Philipovitch, will retire at the end of the year, according to a spokesperson for the airline. Following her departure, the airline will realign its operational and commercial teams at the corporate level, organizing four business pillars - Operations, Network, Revenue, and Customer - each led by a senior vice president reporting to the airline's president, Robert Isom.
- Operations: David Seymour, Senior Vice President of Operations
- Network: Vasu Raja, Senior Vice President of Network Strategy
- Revenue: Don Casey, Senior Vice President of Revenue
- Customer: Kurt Stache, Senior Vice President of Customer Experience
A summer of struggles
American saw a summer of disappointing performance, which left both passengers and shareholders spanning from nervous to enraged.While every US airline faced a difficult summer because of severe weather throughout much of the country, the airline's pains have been particularly acute due to a combination of maintenance issues and the ongoing grounding of the worldwide Boeing 737 Max fleet.
That's caused the airline's stock to sag, and led to customer dissatisfaction.Read more: An off-duty firefighter on a flight to Los Angeles saved a fellow passenger who suffered a cardiac arrest mid-flight and had no pulse for at least 30 minutesAlready, American, which owns 24 of the troubled Max aircraft, with 76 more on order - seven of which were initially due to be delivered in the second quarter - has had to cancel around 115 daily flights, and one entire route - in order to cover key routes with older planes.
Compounding the pain from the Max-related groundings, American had more planes out of service than normal due to mechanical issues. While mainline carriers like American can usually swap spare planes to cover mechanical issues, and to recover from weather delays, but the current high rate of technical issues has made it difficult.
American has blamed - and filed a lawsuit against - its mechanic unions, alleging that employees are deliberately slowing down work or exaggerating issues that do not affect safety in an effort to influence new contract negotiations.In September, a Miami-based mechanic was arrested for allegedly sabotaging a plane to try and get overtime hours.
The troubling summer performance has led to speculation that CEO Doug Parker would be replaced.
However, there have been indications that the airline is turning things around.The airline reported an 82.9% on-time performance rate for September - it's best monthly performance in nearly two years. While this can be attributed to a variety of factors, including better weather, the airline also resumed negotiations with its mechanics unions, and won a court order against the alleged slowdown.
American Airlines' reshuffled management teamWhile each of these SVPs already works in an executive position at the airline, their jobs are being redefined based on the new organizational layout.
"This is an opportunity to sharpen our focus on the key parts of our airline: running a reliable operation, expanding the world's best network, maximizing all aspects of revenue to ensure American thrives forever, and delivering a superior customer journey as we create a world-class customer experience," Isom, American's president, said in a press release. "This restructure puts innovative and extremely capable leaders at the forefront of these initiatives."Seymour, who has overseen integrated operations at the airline since 2012 (at the time he was at US Airways, which merged with American in 2013), will expand his responsibilities to oversee everything from airline and cargo functions, to regional carrier operations.
Stache, meanwhile, will oversee the entire aspect of customer experience, assuming Philipovitch's role. Stache has worked for the airline for more than 15 years, according to his LinkedIn profile, and previously oversaw American's loyalty program as a senior vice president of marketing.
Additional executives will report to the four senior vice presidents.
Why this matters, and will it help?While some continue to call for changes in the C-suite, the changes announced on Thursday reflect a major shake-up in the reporting and oversight structure of the people who manage the day-to-day at the airline, which more directly effects operations and experience.
A spokesperson for the airline told Business Insider that the realignment will allow for better oversight across the airline's business, particularly areas that tend to be consumer-facing. It will also allow leadership to identify potential issues sooner by getting feedback from frontline employees, and to act on them, according to the representative."American's team members are what set us apart," Isom said. "They're the difference between just a flight and an experience. Our job is to give them the tools to care for customers on their journeys with us, and we know with this superb group of six leaders at the helm, we will deliver."
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