What’s wrong with American Airlines, part 3/x

Summary

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Podcast Summary: The Air Show

Episode: What’s wrong with American Airlines, Part 3/x
Date: October 30, 2025
Hosts: Jon Ostrower, Brett Snyder, Brian Sumers

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Overview

In this third (possibly final) installment on “What’s wrong with American Airlines,” Jon Ostrower, Brett Snyder, and Brian Sumers focus on the airline’s leadership—an area insiders and observers alike cite as a root cause of ongoing struggles at America’s “flag carrier.” The trio dissect the latest C-suite shakeups, question the efficacy of new and old leaders, explore the cultural and structural hangovers since the American/US Airways merger, and debate whether bold change is possible—or whether the airline’s current direction is “irreparably” lost. The conversation is candid, at times biting, and richly informed by decades of observational and direct experience inside the industry.

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Key Discussion Points and Insights

1. Leadership Changes and the New CCO (00:38–05:24)

• New Appointment: Nat Pieper named Chief Commercial Officer (CCO), replacing interim Steve Johnson (00:52).
  • Johnson returns to Chief Strategy Officer, his prior role.
  • Pieper’s proximity (already OneWorld CEO based at AA HQ) and strong industry rep lauded.
• Hosts’ Take:
  • Brian Sumers: “Robert [Isom] values loyalty over all else, perhaps to his detriment a little bit… There was no chance he was going to take a chance on some young hotshot from Breeze.”—(01:38)
  • Jon Ostrower: Pieper described as “exacting...intensity and ruthlessness… adept chess player” but needs to balance effectiveness with “stakeholder fortification.”—(02:50–03:49)
  • Brett Snyder: Warns Pieper lacks direct revenue management or sales experience, two urgent areas for American (04:55).

Notable Quote

“I think it’s a pretty strong hire and the best choice that Robert Isom could have made.”
—Brian Sumers (01:25)

2. Can a Chief Commercial Officer Fix American? (05:24–07:10)

• Delta as Benchmark: Glenn Howenstein at Delta is cited as a CCO success story, but the hosts doubt Pieper (or anyone) can match that impact without broader changes.
• Problem of Vision: Discussion shifts to CEO Robert Isom’s lack of clarity—“always seems so conflicted about whether he's a cost man or...a revenue man” (05:56).
  • Both Delta (Ed Bastian and Glenn Howenstein) and United (Scott Kirby) cited as examples of defined, visible leadership.

Notable Quote

“Robert’s always been a cost man, but he’s trying to change his spots. I actually don't know how well that’s going.”
—Brett Snyder (06:11)

3. Lack of Vision and the Leadership Vacuum (07:10–13:47)

• No Clear Flag Carrier Identity:
  • Jon Ostrower asks, “What is American’s vision here or what does it stand for?... How do the frontline people rally behind this airline?” (07:10–07:38)
• Frontline and Middle Management Lost:
  • Brian Sumers: Emphasizes even HQ middle managers say they don’t know the direction (09:02).
  • Brett Snyder: “If it was there, it shouldn’t be that hard...the gate agent in Chicago or the flight attendant in Phoenix… it impacts the service they deliver and ultimately how the customers perceive the airline” (11:05).
• Vacuum and External Narrative Domination:
  • United CEO Scott Kirby’s criticisms about AA’s losses at O’Hare fill the void left by AA’s lack of communication (11:05–12:11).

Notable Quote

"...Middle management people...don’t know which way the wind is blowing. They don’t know the company's priorities."
—Brian Sumers (09:02)

Ad Segment Skipped (13:12–14:17)

4. Is This All US Airways’ (or America West’s) Fault? (14:17–19:28)

• Refuting Merger-Blame Narratives:
  • Brett Snyder is emphatic: “This is not about which leadership came from where. It's just about ineffective leadership.” (15:42)
  • Ostrower adds, “Like blaming McDonnell Douglas for the current state of Boeing… It became such a crutch.”
• Post-Merger Shifts:
  • Praise for Doug Parker and Scott Kirby’s initial “guns blazing” post-merger strategy; AA was aggressive, ambitious (16:34).
  • After Kirby left, the airline "settled back into old ways"; renewed cost focus and caution took over.
• Vasu Raja’s Reign:
  • Ostrower: “He had some pretty innovative ideas. Not all were good ones...but he was pushing it forward.” (17:46)
  • Snyder: “...He had to be following the CEO and the board’s lead. If they don’t think they can compete...the results were mixed at best.” (18:20)

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Notable Quote

“Blaming America West for US Airways is just giving an excuse to people who should be criticized for failing their companies.”
—Brett Snyder (15:42)

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5. The Post-Parker, Isom Era and Board Influence (19:28–24:14)

• Decline Post-Doug Parker?
  • Sumers wonders if Parker deserves more credit, or if his leadership set up inevitable problems (19:28).
• Board’s Role:
  • Jon Ostrower dives into AA Chairman Greg Smith’s Boeing legacy—driving “Partnering for Success” initiatives that hollowed out the supply chain; portends similar obsessive cost focus at AA, to its detriment (20:13).

Notable Quote

“Greg Smith was very much part of the culture Boeing is now trying to obliterate...that is generally been the leadership ethos of their chairman.”
—Jon Ostrower (21:31)

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6. Contrasting Leadership Styles: Doug Parker vs. Robert Isom (21:53–24:45)

• Personal Leadership Stories:
  • Brett shares anecdotes of both Parker and Isom as managers at America West; both strong one-on-one, but Parker better in "the big arena."
• Vision and Rallying the Troops:
  • “Doug was very good at articulating a vision. Whether you agreed or not is a different issue, but…he would call for that leap of faith.” (22:44–23:51)
  • Isom, by contrast, “feels more fragile and can’t really rally the troops in the same way.”
• Need for Architectural Vision:
  • Ostrower stresses importance of “an architect”—someone like Richard Anderson, Herb Kelleher, Alan Mulally—who builds a decisive, long-term vision (23:51–24:14).

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7. Struggling with Premium and Coherent Direction (24:14–29:11)

• Premium Product Miss:
  • The Chief Customer Officer (Heather Garboden) reports to both sides—a symbol of indecisiveness.
  • Brett: “It feels wishy-washy. There's a need for a more clear direction.” (24:14–24:45)
• Piecemal Projects:
  • AA’s response to premium is “deck chairs” rather than strategic overhaul.
• Firsthand Experience:
  • Sumers recounts flying AA business class, contrasts lackluster catering with United’s more customer-focused approach—“Delta showed us where this industry was going 10, 15 years ago.” (25:05–26:59)

Notable Quote

"I'm just not sure that enough people at the top at American actually understand premium, let alone fully believe in it....I'd like to see people at the airline start flying other carriers as much as they can."
—Brian Sumers (25:05)

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8. AA's Recent Tactical Moves—Are They Enough? (27:30–28:09)

• Brett: “It all feels so disjointed. It doesn't feel like a broad strategic push from the top; it's just checking boxes.”
• Lack of Bold Vision:
  • The leadership’s “risk aversion” is flagged, especially CEO Isom’s reluctance to spend even when it is required to drive future revenue (28:09).

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9. Role of Steve Johnson and Implications of Slow Decisions (29:11–32:24)

• Steve Johnson's Tenure:
  • Both Brett and Brian respect Johnson's intellect, but agree he's not a true “commercial guy.”
  • His “army of SVPs” approach was a holding pattern, not bold leadership.
  • Concerns that Isom’s slow decision-making trickles down, producing inertia at all levels.

Notable Quote

“If your CEO seems… scared of making the wrong decision, do you have a ‘move fast and break things’ mentality? Or do you just stare at your spreadsheet all day?”
—Brian Sumers (30:19)

• Steve’s Own Words:
  • Quote from Steve Johnson at Morgan Stanley Laguna conference:

    “American is a company that has, I think, been noteworthy in its really terrific management of its cost and cost structure. We've had really terrific performance, but we've been less capable at producing revenue.” (31:54)

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10. The Robert Isom Enigma and Communication Issues (32:24–36:11)

• Isom Rarely Involved:
  • Brian: “Robert is such an enigma... He’s notoriously unwilling to do interviews.”
  • Public forum answers are often rambling and evasive (J.P. Morgan conference example: 33:14–34:24).
• Delta/United Set Industry Pace; AA Left in Limbo:
  • The airline lacks outward signs of a strategy shift outside prepared remarks.

Notable Quote

“It just feels like American doesn't know who it wants to be and why....this isn’t simply about being premium or value. This is about setting a long term goal and focusing a team on achieving it. The frontline wants to be led and they want to be led with a vision for the future.”
—Jon Ostrower (34:56–35:41)

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11. Can AA Become the Third U.S. Premium Airline—or Is the Ship Sunk? (36:11–End)

• Scott Kirby’s Famous Jab:
  • Ostrower: “Scott Kirby has a way of trying to manifest what he hopes will happen… He has just enough data to suggest American has lost its chance to compete.” (36:11)
  • Still, the hosts agree the story is not over:

    “There is room for improvement and there is leadership to be done here. And this is not irreparable.”
    —Jon Ostrower (37:10)

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Memorable Quotes with Timestamps

• “Robert values loyalty over all else, perhaps to his detriment a little bit.”
  —Brian Sumers (01:38)
• “Nat...intensity and ruthlessness...an adept chess player...”
  —Jon Ostrower (02:58)
• “Robert’s always been a cost man, but he’s trying to change his spots.”—Brett Snyder (06:11)
• “Middle management...don’t know which way the wind is blowing.”
  —Brian Sumers (09:02)
• “Blaming Americawest for US Airways is just giving an excuse to people who should be criticized for failing their companies.”
  —Brett Snyder (15:42)
• “Deck chairs, if you will.”
  —Jon Ostrower (27:38)
• “If your CEO... is scared of making the wrong decision, do you move fast and break things, or do you just stare at your spreadsheet all day?”
  —Brian Sumers (30:19)
• “American...has been less capable at producing revenue.”
  —Steve Johnson (paraphrased by Jon Ostrower) (31:54)
• “It just feels like American doesn’t know who it wants to be and why… This is about setting a long-term goal and focusing a team on achieving it.”
  —Jon Ostrower (34:56)
• “There is room for improvement and there is leadership to be done here. And this is not irreparable.”
  —Jon Ostrower (37:10)

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Important Segment Timestamps

• Introduction and Topic Setup: 00:00–00:38
• New CCO Announcement & Leadership Chemistry: 00:52–05:24
• Can Leadership Fix American? Delta/United Comparisons: 05:24–07:10
• Vision, Identity & Communication Breakdown: 07:10–13:47
• US Airways/America West Blame Debated: 14:17–19:28
• Doug Parker, Board Influence & Cost Focus: 19:28–24:14
• Premium Push, Piecemeal Projects, and Execution: 24:45–29:11
• Slow Decisions and Cultural Impact: 29:11–32:24
• Robert Isom’s Public Perception/Communication: 32:24–36:11
• Can American Compete as “Third Premium”?: 36:11–37:10

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Conclusion

This episode offers an unflinching assessment of American Airlines’ strategic malaise at the top. While the new CCO appointment is seen as a promising, if cautious, move, the larger problems—from unresolved identity, lack of bold leadership, and an entrenched cost obsession—remain unresolved. The hosts, drawing on deep industry experience and inside knowledge, suggest that meaningful turnaround is still possible, but only with clear vision, decisiveness, and an embrace of the premium market—none of which are yet visible in American’s top ranks.

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Transcript

[A]

I'm John Ostrower, editor in chief of the Air Current.

[B]

I'm Brett Snyder, author of Cranky Flyer.

[C]

And I'm Brian Sommers. I write the Airline Observer. You're listening to the Air show, the podcast where we talk about what goes on in the business of the sky. We are back with our third, possibly final episode. At least that's what we have planned for now, about what's wrong with American Airlines today. It's time for the episode that I know Robert Isom has been waiting for. Guys, we're going to talk about what's going on with the airline's leadership.

[B]

Yeah, I think we've all been waiting to get to this one, but with all our travels, we haven't been able to get the three of us on the same show until now. But this actually turned out to be a good thing because When American announced Q3 earnings, it dropped a little leadership surprise on us.

[A]

That is right. To answer your first question, yes, Robert Isom is still CEO. The change is that Chief Commercial Officer Steve Johnson lived up to his temporary status in the role when he replaced Vasu Raja. Starting almost immediately, Nat Pieper will become Chief Commercial Officer and Steve will go back to being Chief Strategy Officer, a role he held before he stepped into Chief Commercial Officer. Exactly how that overlap will work. We'll see how that plays out.

[C]

Yeah, John, you were generous with your discussion of temporary status. Is it still temporary when the job lasts for almost a year and a half, a very long time? Steve Johnson was the interim over there today. I know many listeners want us to chat about dysfunction at American, and I assume, guys, that we will get there soon. It seems to be a very popular topic. But again, I have to say something positive here. I think it's pretty strong hire and the best choice that Robert Isom could have made. And first, that's because Nat is by most accounts pretty good at what he does and he has a strong reputation. But second, from the very beginning, all of my insiders said that Robert was never going to hire somebody he didn't know well. So there was no chance, guys, that he was going to take a chance on some young hotshot from Breeze. I think that bald man knows who he is, or maybe poach somebody from United to mess with Scott Kirby. What I hear, guys, is that Robert values loyalty over all else, perhaps to his detriment a little bit. And considering that Nat, as one World CEO literally works at American's headquarters, the actual building, I presume that these two men know each other pretty well. Of Course, before taking this One World job, Nat was an SVP at Alaska. John, that's in your sphere of influence. So what do we know about Net?

[A]

Well, Nat's been in the industry for a long time. He started as finance guy at Northwest, moved into Alliances. He did alliances and Fleet work both at Delta and Alaska before moving to One World to become the president over there. Look, One World, as you properly note, is actually based in American Skyview headquarters. So he didn't actually. Didn't have to go far to interview. I interviewed Nat several times in his role at Alaska and found him to be exacting, but also good at saying words without actually saying anything at times unless he really had a message to deliver. But more than just his outward tenor with reporters, he absolutely has a reputation for intensity and ruthlessness and how he approaches transactions. I don't say that as a negative. He's a guy who plays deliberate hardball and is an adept chess player. Look, this is how he gets what he wants and what he's tasked with achieving. I think that level of effectiveness is exactly what America needs right now.

[B]

But.

[A]

But that has to be tempered with a type of, let's call it stakeholder fortification, if you will, that they're going to need while rebuilding. In short, how do you put this carrier's commercial strategy back together without destroying a whole lot of relationships in the process that are also there to protect American through this transformation, both internally and, yes, externally. Brett, what do you think?

[B]

Well. Well, I really like Nat. I had the most interaction with him when he was at Alaska. He. He's done some really fascinating stuff, both with Fleet and Alliances. You know, that was no small task at Alaska, bringing them into One world. I think he has good experience.

And I think he'll probably enjoy the challenge. It's also helpful, as you guys have said, that he's about as close to being an internal employee as any external hire can be since he worked in the building.

So if there is truly a deep comfort level with Robert, that should help him gain credibility quickly in the organization, and that's really what he needs to have any chance of success here.

You know, all that being said, he's not Revenue Management Network or a sales guy. That. That's not his background. And I think America needs a lot of attention in those areas. So I'm going to be watching closely to see what he does in those areas, the ones that are outside of his direct area of expertise. Does he support the strategies of the people that are already there and defer to them, or does he have his own vision. And does he make big changes? We'll find out.

[C]

All right, guys, then it's settled. We all respect nad and we think that under the circumstances, he was a pretty good choice. But I ask you this. Can a chief commercial officer truly fix everything that's wrong at an airline? The answer to that question, I think, is actually yes, because we watched Glenn Howenstein do it. But Glenn, I think we all know, is a freak of nature, and I don't know that Nat or really anybody is at that level. At most airlines, the CEO sets the tone, and Robert Isom is still there. And Robert always seems so conflicted about whether he's a cost man or more recently, a revenue man. He has not been a clear law leader for the airline.

[B]

I think Robert's always been a cost man, but he's trying to change his spots. Right. I. I don't. I actually don't know how well that's going mean. Look at the other big two airlines. Delta has flashy leadership and CEO Ed Bastion, who will never turn down a big public appearance. And he has great shoes, apparently. Yeah, he. He tries. Look, he's trying to get the team on board with their vision in a very broad way. We can argue about how effective that is. This sounds like a future episode, actually. Then there's Glenn actually running the airline and delivering. At United, you have Scott Kirby, who nobody is ever accused of going quietly into the night. He is the loudest voice in the industry right now by far, and he certainly articulated it. What I would say is a clear vision, along with Andrew Nisella as chief Commercial officer, who's another great commercial mind. And then there's American.

[A]

Okay, Right. So. So American has been pretty quiet. It doesn't lead the discussion forward in any way, which is, again, part of the problem when we talk about sort of the direction American wants to go in. But let me ask something, guys. What is Americans vision here or what does it stand for? Like, look, this is the. Ostensibly the. The truly the flag carrier of the country. How do the frontline people rally behind this airline?

[B]

I believe United would take issue with calling them the flag carrier.

[A]

I mean, it's like it's. It's right on the tail. You know, I just.

[B]

Well, that's a version of the flag. Okay?

[A]

It is, it is. But. But I think that. But that. But that ethos is. I think probably what. Is what they may aspire to, but they've never really embraced fair.

[B]

But we. Look, we don't have any answers to your questions that's not. Look, look at the most recent earnings call. I thought it was pretty interesting that most of Robert Isom statements were talking about how American is trying to restore this or that or get back to full strength after the pandemic. We're still talking about this. There isn't a forward looking strategy that's being put out there, not publicly. There was a lot of talk about commercial and oddly enough, almost nothing on the operation, which is actually surprising considering how much it sucked this summer. But Robert is either starting to believe that commercial is where the opportunity is or that's what he's being told he has to talk about. But, but if I'm on the front line, I don't have any idea about where my company is heading, what the vision is. None of that stuff you're talking about it. That's not being put out there, just the front line.

[C]

Brett. I mean, the front line is always tough for any airline executive not named Herb Kelleher or Gordon Bethune. These are people who are typically hourly employees and they're spread out all over the United States and the world and they have got all those layers of management between them and the mothership. So people in the front line are often focused on things that headquarters maybe isn't thinking about, like their next contract or what the rest break is going to look like or how some airport manager treats them. This is all important stuff. And as you say, you'd rather have the frontline with you than against you. But to me, what sets American apart here is not that the front line doesn't know where the company is heading. It's that middle management people that work at headquarters, they don't know either. Managers, senior managers, directors and managing directors who work at this Skyview complex, who tell me, and probably you guys too, like, they don't know which way the wind is blowing. They don't know the company's priorities because they know that the CFO is pretty adamant about saving money. And then the interim CCO and probably the new cco, they know where the industry is going. One thing that I found kind of fascinating about this show is that the three of us, gentlemen, we've kind of been ruthless against American. And I had this assumption that people who work there would be mad at us, like, really mad. Like, people have been at me in the past, but the people that I talk to, they say, you know, great work with the podcast because somebody needs to show leadership that they're not doing this right and maybe they're going to make some changes. So to Go back to what you said about the front line, Brett. I think the front line is important, but I also think that before Nat goes around all those break rooms all over the country to win back the front line, he also needs to go into those conference rooms at Skyview and clearly tell people what his vision is. And then, very importantly, he needs the CEO to have his back. What do you guys think?

[B]

Yeah, I hear what you're saying, and I agree. But my. My point is that the hardest ones to reach are the ones on the front line, and they need to hear it from the top, not Nat. If Robert decides to start delivering a comprehensive vision of what the airline should be, it shouldn't be that hard to reach those in Skyview. Right. I understand they're really hungry right now. They're not getting it. But if. If it was there, it shouldn't be that hard. But the gate agent in Chicago or the flight attendant in Phoenix, these are the people that are actually delivering your service promise to the customer. And. And it's a lot harder to get them to believe and feel motivated if you're not out there beating the drums about where you're going, getting them excited, it impacts the service they deliver and ultimately how the customers perceive the airline right now. Like, look, you know who the gate agent in Chicago is listening to? United CEO Scott Kirby. And he's telling him that American will have to close O' Hare because it's losing $800 million a year. It doesn't even matter if it's true. If you say it enough, people believe it, especially when there's a vacuum and others are dictating what is happening at American because they're not doing it.

[A]

No disagreement there, But I think, look, this is fundamentally about leadership and focus. Okay, let's take a break, and when we come back, we'll talk about whether this is all US Airways fault.

[C]

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[A]

Wait, what am I missing?

[C]

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[A]

I thought it was mostly about bids for business class that I can actually win.

[C]

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[A]

So basically, they're everywhere in travel.

[C]

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[A]

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[C]

And we're back. I think we all know the knock about American that more than a decade after the merger, at this point, some of the executives there still think they're running. Yet US Airways, that place had the stock ticker symbol lcc. Get it, guys? And no one wanted to spend a penny when it wasn't necessary. They viewed travel as a commodity, and that wasn't the wrong view for that airline at that time. But Brett, tell us, why has American not evolved with the times?

[B]

You think it's just US Airways, huh? I usually hear people blaming America west for it, but this drives me insane. It's so incredibly stupid. And I don't just say that because I am a proud America west alum. Just look at United, which has its commercial strategy being driven by Scott Kirby and Andrew Nosella, two longtime America west and US Airways execs. And let's also remember that when American most recently had a boldly different commercial strategy to drive, it was being driven by Vasuraja, who came from Legacy American. This is not about which leadership came from where. It's just about ineffective leadership. And blaming America west for US Airways is actually just giving an excuse to the people who should be criticized for failing their companies.

[A]

No, this is like blaming McDonnell Douglas for for the current state of Boeing. It became such a crutch for the rhetorical debate that it actually prevented them from addressing the things they needed to address in the present. And you, I think, are hitting the nail on the head.

[B]

Yeah, just. It drives me up the wall because it's just. It's such a lazy argument. But the reality is that after the merger of the organization just took on the characteristics of the old American slow, cautious airline where the default decision did not change was enough to not get you fired.

[C]

Yeah. The weird thing is I think American came out guns blazing in a good way right after the merger. I think that when Doug Parker and Scott Kirby were running American from late 2013 to 2016.

I think they understood how to compete. We remember that American was stealing gates from United in Los Angeles and it was packing its schedule at lax so it could be the clear number one with all those long haul routes that were meant to pay dividends in the future. Of course, they're all gone now. All over it was installing what were really then industry leading flatbeds. It was big on premium economy. They were always talking about running the world's largest airline and what that meant they were gonna fly customers everywhere they wanted to go, not just through joint venture hubs. And then Kirby left and I think it was then that Americans seemed to settle back into those old ways when where it didn't want to spend money or fight for competitive markets or just didn't want to do much of anything particularly.

[B]

I'm not sure that we're disagreeing here. Scott was always the engine behind the commercial vision and strategy that was clear. It's not like the new American turned into the old American overnight. But the process did start early. It's just when Scott left and the engine flamed out that the transition I think became much more clear to those outside the company.

[A]

It may have flamed out, but it restarted when Vasu took over as cco. Look, he had some pretty innovative ideas. Not all were good ones. Quick aside, actually. Interestingly enough, Vasu was actually the architect of the massive Airbus and Boeing transaction that created the 737 Max back in 2011 and gave Airbus a final assembly line in the US and generally reshaped commercial aviation for the decade that followed. Okay, back to American. And yes, the implementation of many of his commercial initiatives he was pushing for were often, well, as you guys have said, very bad. But he was pushing it forward.

[B]

Yeah, I've actually my take on this has changed a little bit over time. I think his actions were because of what had happened to American. Getting up to that point where he was Given the keys, if you think about some of the stuff that he did, I. American was never going to be able to get big in New York, or that's how management felt about it. So he went out there and put together a partnership with JetBlue, and then American wasn't ever going to be able to beat the other airlines on revenues. That was kind of the message, I guess. So he put together this sales and distribution strategy that would instead slash cost, focus on costs. That went poorly. But the point is that he had to be following the CEO and the board's lead. If they don't think they can compete, then you have to get creative to try and find another way to solve the problem. And that's kind of what Vasu did. And the results were absolutely mixed at best. But ever since he was booted out a year ago, the airline has been focused on returning back to where it was. Meanwhile, the other airlines are all taking full advantage. This, to me, just falls on the CEO and the board more than Vasu.

[C]

I want to take this back a little bit further, guys, because earlier we talked about how American lost a step after Scott Kirby left. I think that that's true, but American was doing fine under CEO Doug Parker. And this is all a little bit subjective, but I think that we can peg some of the more recent American problems to happening after Doug Parker retired. And we don't talk about Doug that much on this show, but is it possible he was a better leader than we thought? Or is this one of these cases where, like a Gary Kelly situation where he had set up American to fail and it just kind of failed after he left, but he put the pieces in motion.

[A]

One thing that I think deserves a huge mention here as we talk about an excessive focus on cost and the resulting underperformance of the airline also centers on the board. We've talked about the C Suite, but Americans Chairman Greg Smith should also be part of this conversation, too. Greg was Boeing's CFO from 2011 to 2021, when he exited under Dave Calhoun and took over the Boeing seat on the American board. Yes, there was some overlap with former Boeing Commercial CEO Jim Alba, who joined the board in 2013 after he left Boeing. Smith became chairman in 2023 when Doug formally retired. Let's just say the quiet part out loud. Uh, Greg Smith was very much part of the culture Boeing is now trying to obliterate. Uh, as cfo, he was the architect of Partnering for Success and its successive rounds at. At Boeing, which was a. An aggressive, incredibly aggressive effort to reduce the. The cost for Boeing to acquire anything from the supply chain. The initiatives hollowed out the supply chain and Boeing's ability to deliver that weakness created by Partnering for Success and other initiatives, effectively put a boot on the throat of suppliers. It was catastrophic. Left a good portion of the aerospace supply chain weakened, which ultimately was revealed after Covid. That is generally been the leadership ethos of their chairman. And I think that very much goes hand in hand with what. With a lot of what they're talking about for. For how they've run the airline on cost rather than on continuous investment, even if the lowest cost is the goal.

[B]

Well, that's interesting, John. Now, Brian, I mean, you're talking about Doug specifically.

I will always have a soft spot for Doug since I worked at America West. He was a great leader for a small airline like us. He wrote a recommendation letter for business school for me. He showed up at my party at a nearby bar to see if I got in or not. Like that was very different. Right. Here's the thing that I will say. I can say the same for Robert. He briefly took over running revenue management at America West. I think they were just trying to prevent him from leaving and that was the only promotion they had. Or something like that is not his area. Right. But another coworker and I were tasked with bringing him up to speed on pricing. And we spent a lot of time with him. He was always really gracious. He sent us on a tour of the Pratt factory in Hartford actually to say thanks at the end of it, which was awesome.

[A]

But.

[B]

But in both cases they were great as one on one leaders or small groups, any of that. Right. I think where they started to really diverge is in the big arena. Doug was very good at articulating a vision. Whether you agreed with it or not, it's a different issue. But you know, he would call for that leap of faith, try to show a way forward he could do these things, put them together. He also saved the industry more than once with his work in Washington as a leader in the political realm. But that's neither here nor there. But he had a lot of missteps at American during his time there, and I don't think he was as effective as he could have been. It was too big, too demoralized and too hard to turn. Now Robert takes over and he's not as well equipped as Doug is for dealing with the big stuff. And to me, he just feels more fragile and can't really rally the troops in the same way from a one to Many perspective. And Doug at least was happy to try and do that. So that's where I see one of the big differences there.

[A]

Well, look, in covering this business and studying it for as long as I have, the one thing that is always consistently run through successful aerospace and aviation companies is really the necessity for an architect like Richard Anderson, Herb Keller, Scott Kirby, Alan Mulally. Look, it's, it is about deliberately building a vision for the long term and also defining the shape and ambition of the enterprise.

[B]

Okay, so just to lay this out, I think American needs more decisive leadership at the top. Case in point, American has gingerly tried to touch on premium by creating a chief customer officer who reports to both the operation and the commercial sides of the business. That's Heather Garboden. And I'm convinced she has the hardest job at American. With multiple bosses that have different priorities, it feels wishy washy. That's just one example of where there needs to be a more clear direction.

[A]

I also think there needs to be a pretty concerted effort at defining premium here. There's a more enthusiastic extraction of incremental revenue from customers and then there's enticement to spend more on a better overall experience. And look, let's put it this way. American has been optimized for a long time for one over the other.

[C]

Yeah, American is getting better, let's give them that. But I'm just like not sure that there are enough people at the top at American who actually understand premium, let alone fully believe in it. I'd like to see people at the airline start flying other carriers as, as much as they can. And they're going to figure out that they have to start spending more money in the belief that they can charge higher prices for a better. But I'm not sure that it can be piecemeal the way American is trying to approach this right now. Let me go off on a tangent and just give you an example. I flew American Airlines business class to New York a couple of weeks ago. And because I'm a huge nerd, I look to see what food American was serving on the flight to New York and what United was flying to New York. Now it's only about a five hour flight, guys, and nobody needs a second meal in that flight. You can't possibly eat it. But United recently started serving a pretty substantial snack for the second meal. And I don't think that's because people need it. I think that's because people at United understand that that's what the customer expects. And American was serving me that Cookie, which I know people liked in, like, 1998, and it makes the cabin smell good, but that's not a second meal. Somebody made that decision. All right, so why is American taking so long? I don't know. Delta showed us where this industry was going 10, 15 years ago, and I guess for a while you could say it was a passing fad. But I think that that time has passed. And I don't see how you could see these trends go on for so long and say, yeah, we only need three rows of main cabin extra along with the exit rows. Or, you know my favorite example, Brett, let's just fly 20 business class seats to Tokyo.

[B]

I thought you didn't want to talk about seat counts anymore.

[C]

I don't. That's true, but you know what I mean. And the good news is, we've talked about before. The airline is slowly moving in a better direction. Although the Lopez should have changed a long time ago, it's finally talking about premium. And the recent earnings call was kind of amazing. This third quarter earnings call, because it was focused almost entirely on the commercial side of the business.

[B]

I'm not as impressed.

[C]

So you don't like these changes, Brett?

[B]

It's not that. It just all feels so disjointed.

[A]

Deck chairs, if you will.

[B]

Well, it's not even that.

It's just doing some specific projects in specific cases. We have the 787P, which we're not retrofitting backwards, but we're going to have some new deliveries and put them on some routes. And we have the A320XLR, which most people who fly American will never probably fly anyway. But it doesn't feel like a broad strategic push from the top. It feels like the airline is just kind of checking boxes based on what it sees other airlines are doing.

[C]

The question for me, guys, is not so much about the products, because we've hit that before, but it's why has all this happened? Right. This is our leadership episode. And I think if we look at the very top, American doesn't seem quite sure what it wants to be. We know that Robert, maybe because he was an operations guy, is so risk averse. And I think that he knows that American has this very big mountain of debt. And he just seems to me to be apprehensive, let's say to spend money, even if spending money should mean more revenue. And we see Robert being risk averse in so many things that he does, including his hiring practices. We talked about before, like, almost 18 months to hire a new CCO. When it's like the most important job at the company. I don't know. But I suppose Steve Johnson did an okay job. Brett, I know you know him pretty well as well. What'd you think of his work?

[B]

Yeah, Steve, another America west guy. I have known him for a long time. I've always really liked him. So he's really smart guy. He's capable of doing a million things, things. And I think he does get the need to turn the airline in a different direction and tell that story.

It's possible he was making progress in the role, but in the end he's, he's not a true commercial guy, as we've discussed. Right. And you're going up against Andrew Nisella, United and Glenn Howenstein at Delta. These are commercial guys through and through. Instead, Steve had built this sort of army of SVP's that he was trying to direct while he worked to repair the damage that was done externally with the whole sales and distribution strategy. That's a, it's a really hard job for someone who even is a commercial person. And you know, now that's up to Nat to carry the torch. It's only going to get harder to catch up if Delta and United keep firing on all cylinders. I think that's just tough. Steve did a good job of stabilizing and starting to turn the ship. But you know, at the mean, in the same time, Delta and United just keep going.

[C]

Yeah, I think Steve did a fine job. But as you guys know, I like to see symbolism in these decisions or I like to make something that perhaps out of, out of nothing. But I'm going to go back to Robert just taking his, his sweet time because you can think of this just as a delay in filling an important job. It is what it is. But I tend to think that this way of seeing the world probably trickles down within the company. So if you're a vice president and you see that on a day to day basis, your CEO seems to be, whether it's true or not, scared of making what we might call the wrong decision. Do you think you're going to have a move fast and break things mentality? Or you think you just kind of stare at your spreadsheet all day and wait for your computer to talk to you to tell you what to do?

[B]

I'm assuming you don't need us to answer that question.

[A]

Look, I do agree with what you say about Steve, at least around understanding the issues at hand here. Look, I, he made that clear at the Morgan Stanley Laguna conference earlier this Year. He may not have been a long term solution guy, and he may not have had all the answers, but everything I hear is that he gets it. He just needs to be allowed to do what he needs to do. He also said this in his opening remarks at the conference. Here's what he really wanted out there. Quote, we talk a lot about margin improvement, but we don't often talk about revenue. And I'd just like to maybe say a few words about that today. American is a company that has, I think, been noteworthy in its really terrific management of its cost and cost structure. We've had really terrific performance, but we've been less capable at producing revenue. I think that's kind of a way of saying Robert missed what was happening in the industry. And more to the point, as costs came up from the bottom, whether for cruise engines, airframes, broader inflation, whatever, they didn't have the headroom at the top to command a higher price, nor the loyalty of its customers to actually monetize that.

[C]

Yeah, Robert is. Is such an enigma. You know what I would love more than anything, guys? If Robert called us at any time, maybe just after this episode, and told us, guys, you're idiots. And this is why. But he's notoriously unwilling to do interviews. And sometimes I like to tell the listeners how the sausage is made in this industry. And y' all might be surprised how often we will hear from executives that purport to hate us. And they'll call us, and maybe the call will be off the record, but they'll say, you know, listen, guys, like, I heard what you said and you missed it here, here, and here. Nobody, I assume nobody hears from Robert Isom, right, Guys, you don't hear from Robert Isom.

[B]

I don't talk about my sourcing. Oh, no. But American, hello, We'd love to.

[C]

All right, so the best that we can do is look what he says at public forums when he's not reading a script. And those things haven't always gone very well. So, John, you talk about what Steve Johnson said at that recent conference. He was. He seemed to me to be cleaning up a very specific mess that Robert made earlier at a J.P. morgan conference in March of this year, people may remember, Robert had to respond to Jamie Baker's question about why Scott Kirby was wrong, that American won't be one of the two premium airlines that could, Kirby suggests, can be supported in the United States. It was kind of a weird answer. It was like this rambling thing. He blamed a regional pilot shortage, and he talked about the fleet in general, Isom talked about growing in the Sun Belt and how great American's international partners were. He didn't really address the issue of what it means to be a premium airline. It was just an interesting situation. And it was weird that the person at the top of a company couldn't really explain what it means to be a premium airline.

[B]

So I guess the question now this goes back to what I had said in the beginning. Can he actually change his spots or is he just going to try to do his best impersonation job of someone who believes in premium and commercial and all that? You know, that rambling answer was obviously a while ago. But other than some tactical initiatives and prepared remarks, it's not clear that things have actually changed there.

[A]

Oh, no way. No. Like, look, American is trying to hedge its bets right now. Like, I, I'm trying to put my finger on it. But like, American has sought to be all things to all people. And by the way, if the leadership of Southwest Airlines listen to this, you're plowing headlong into the same situation. It just feels like American doesn't know who it wants to be and why. Like, I hate saying, like, do what Delta does and what United did because that's like terribly lazy advice. Like, don't be them. Like be who you are. And this isn't simply about being premium or value. This is about setting a long term goal and focusing a team on achieving it. And the frontline wants to be led and they want to be led with a vision for the future.

[B]

Right? That's exactly what we were saying earlier. Right? The CEO needs to be thinking bigger picture. If he is, we aren't seeing much evidence of that externally right now. All right, final topic for today. I think you're the guy for this one, John. You've taken issue with a few things Scott Kirby has said over the years. Kirby says American is too late and there is only room for two premium airlines in the U.S. true? Or is this scat just being scat?

[A]

Look, Scott Kirby has a way of trying to manifest what he hopes will happen and saying it out loud, sometimes very loudly. Look, he has just enough data to suggest that American has lost its chance to compete. Maybe that's true if Delta United keep pushing relentlessly and flawlessly.

[C]

But.

[A]

But this is the airline industry and one or both of those airlines will probably trip up at some point. American is absolutely far behind. But that doesn't mean that it can't find an opportunity to fix things in the future. I think, you know, as we kind of wrap up this series. That is the biggest takeaway I think our our listeners should have. There is room for improvement and there is leadership to be done here. And this is not irreparable. And I think it's going to be incredibly exciting from, from the point of view of all three of us and for the industry to watch how American does this or maybe doesn't do it. But I think we're all rooting for them.

[C]

You've been listening to the Air Show. If you have suggestions or questions for us, or if you're interested in sponsoring the podcast, go to our website, the airshowpodcast.com to get in touch.

[B]

The Air show podcast is produced and edited by Mo Popler. Our theme music is by Joshua Mosher. Thanks for listening and we'll be back soon.