American Airlines, struggling with operational and competitive issues, has announced a shuffle of mid-level upper management intended to address them.
Despite widespread rumors and numerous speculative reports, the carrier apparently has no immediate plans to make changes at the top. Asked if CEO Doug Parker is going anywhere, spokeswoman Michelle Mohr said, “No.”
The principal changes are that Kerry Philipovitch, senior vice president of customer experience, will retire at the end of the year, while the number of people who report to President Robert Isom has been cut from five to four, with all four being given enhanced titles and responsibilities.
“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 said in a prepared statement.
The four executives who will report to Isom are David Seymour, Senior Vice President of Operations; Vasu Raja, Senior Vice President of Network Strategy; Don Casey, Senior Vice President of Revenue and Kurt Stache, Senior Vice President of Customer Experience.
Previously five people including Philipovitch and Devon May reported to Isom. May will now oversee American Eagle and report to Seymour.
“The point is that we are making changes to our operational and commercial teams that are a good, positive step for American,” Mohr said. “We have the right people in the right places with the moves.
“The best thing we can do for our customers and team members is to run a safe, reliable operation,” Mohr said.
American has had a difficult 2019. Its stock price has lagged rivals. The leading airline in Latin America because it has a Miami hub, its potential in the region was damaged by Delta’s recent surprise announcement of a partnership with Santiago, Chile-based LATAM. American had been working on securing a LATAM partnership.
Primarily, American has suffered from a summer of operational chaos, which resulted primarily from the grounding of the Boeing 737 MAX and a slowdown by mechanics. The problems have eased as both summer travel and the slowdown have ended. Contract negotiations for mechanics and fleet service workers have resumed and are proceeding slowly.
Philipovitch is retiring at 49. American executives complimented her, saying her departure for personal reasons was long planned.
“Kerry is one of the very best leaders I have had the privilege of working with,” said American Airlines President Robert Isom. “She is a great advisor, consummate team player and champion of those we serve inside and outside the company. She led the industry’s largest reservations system cutover … American is far better because of Kerry’s contributions.”
Philipovitch began her aviation career in 1996 as a Northwest pricing analyst; she went to US Airways and then American. She was known for a management approach that sought to quantify actions, roughly defined as, “If it’s measurable, it’s manageable.”
Lori Bassani, president of the Association of Professional Flight Attendants, which represents American flight attendants, said management over flight attendants will move to customer experience/marketing from customer experience/operations.
“I am pleased to see that the [move] to where we used to be with legacy American,” Bassani said. “It’s no secret that flight attendants spend more face time with our passengers than any other work group on the property.”
Bassani said she is scheduled to meet Stache on Thursday. She plans to tell him, “You have 28,000 professional ambassadors of our brand whose voices have been marginalized and talents have been under-utilized. Just treat us with the respect and humanity we deserve.”
Dennis Tajer, spokesman for the Allied Pilots Association, said, “Management changes are the purview of management. Just like passengers and shareholders, we just want to see results. Results are what matters. We hope these changes mean a focus on true collaborative solution to American’s problems.”
Tajer noted that Seymour, once a paratrooper, tends to see eye-to-eye with pilots. “We hope his focus on operations produces results,” Tajer said.
Direct reports to Parker will continue to include five people: Isom, Elise Eberwein, executive vice president, people and communications: Steve Johnson, executive vice president, corporate affairs; Derek Kerr, executive vice president and chief financial officer, and Maya Leibman, executive vice president and chief information officer.