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December 10, 2013

Former AMR CEO Crandall: "Now what American has to do is clean Delta’s clock"

There was a familiar face at American Airlines' merger festivities on Monday.

Former American CEO Bob Crandall flew in from Florida to participate in the company's merger with US Airways. Crandall served as American's top executive from 1985 to 1998 and spent a lot of time posing for pictures with employees, shaking hands and showing his support for the merger.

He spent a few moments with the Star-Telegram to share his thoughts on the new American.

ST: What was it like for you to be back at Amon Carter Boulevard as the company you ran for several years merged with another airline?

Crandall: It was terrific. I invested a great many years of my life trying to create what I think was a great company. It has kind of deteriorated over the last several years and what I hopefully was part of this morning was the beginning of a renaissance to make American a truly great company.

ST: New American CEO Doug Parker talked a few times about restoring American to greatness. What does restore mean to you?

Crandall: American failed to gets its costs down to the point, if you recall go back to the early 2000s. Delta went bankrupt. Northwest went bankrupt. United went bankrupt. Continental went bankrupt for the third time. They all went through bankruptcy. They got their costs down below American’s costs. American should have gone bankrupt at the same time, the same time as the other companies. But they chose not to do that so American sat there and lost money for ten years in a row. And in the process, they abandoned a lot of flights and shrunk their presence and now they finally went bankrupt. Now they've got competitive costs but by this time, they needed the additional locations, the additional ubiquity - that is strictly, when I use that term I mean they fly to lots of places - they needed the ubiquity that now US Airways adds to the mix. So now American has presence on the East Coast, it doesn’t have today up and down the East Coast.

ST: It used to have a sizable presence on the East Coast.

Crandall: Right. It used to. That’s one of the things it lost in the intervening years. Now it has much greater ubiquity and frequency throughout a lot of cities in the Midwest, so now the combination of American and US Air is again, big enough so it can compete satisfactorily with Delta and with United.

ST: Although the new American is the biggest that doesn't necessarily mean it's better.

Crandall: It enables them to compete. It has the size to compete. Now what you’ve got to do, you’ve got to recreate the pride in your employees. You’ve got to get it back up to the point where you’re not satisfied with being anything but no. 1. No. 1 in on-time arrivals. No. 1 in [fewest] baggage mishandlers, No. 1 in smallest number of employee complaints you need to be at the top of the metrics. You need to be the best performer. If you want to be the best airline you have to be the best performer You’ve got to earn it.

ST: You still follow the airline industry. Delta has been very aggressive. Can American compete with them?

Crandall: Yes they have and have been very successful in performing and now what American has to do is clean Delta’s clock....[Delta CEO]Richard Anderson is a very smart capable guy. So he’s a tough opponent. If you want to be the best airline you’ve got to beat the tough opponents.

ST: Parker's personality is more outgoing than previous American CEOs. Does the company need his management style after the company has gone through bankruptcy?

Crandall: The chief executive of every airline needs to be out on the ramp, needs to be out in the terminal, needs to be leading the charge. He needs to pay very detailed attention so everybody knows that doing anything other than No. 1 is not acceptable.

-Andrea Ahles

 

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Comments

Mark

Crandall was the only President that came to where the employees were working. He would show up greet the employees. Each Christmas Mr. Crandall came to visit the employees. The CEO should come amongst the employees and talk. Even the VP should come and visit once in a while. On Christmas, you knew Mr Crandall would be by to say hello. These types of visits did not occur with the other CEOs.

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