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AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 8:57 pm
by LAXintl
Planning for a smaller post COVID19 world, approx 30% cut in officer team when all the shuffling is done.

Letter from Isom today.


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Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 9:16 pm
by UPlog
Wasn't Isom essentially wearing the COO title also all this time while being president?

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 9:31 pm
by LCDFlight
Yes, this is potentially a stepping stone to Doug retiring. (I just made that up). It also elevates Vasu Raja, which is significant. Similar job to Nocella at United, an apex level job for that career field. In some ways the key decision maker at the company for fleets, routes etc. I believe you need a career specialist in that role, not just a CEO who buys airplanes and dreams up routes.

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 9:31 pm
by deebee278
They "elected" to leave? Doubt it. If it was like the year 2000 or thereabouts, they were issued a cardboard box, told to empty their desks and escorted out of the building.

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 9:36 pm
by LAXintl
Follow on letter from Parker

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Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 9:46 pm
by NYCAAer
Seems like there’s still a lot of extra fat at Versailles, I mean Skyview Drive, the shimmering palace built by Dougie.

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 10:05 pm
by UpNAWAy
A new HQ was desperately needed. Would you have preferred it be architecturally ugly?

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 10:10 pm
by joeblow10
As much as A.net hates on Dougie - AA’s strategy may very well be paying off. I don’t think it’s any coincidence AA has been flying more passengers than DL/UA for the past couple of weeks (somebody had mentioned they carried 100K/day the last week of May, DL/UA were closer to 60K). AA and WN may very well come out of this in far better shape

Heck, DL apparently is just going to fly around planes 60% full until there’s a vaccine. Good for consumer confidence, not so good for financials

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 10:14 pm
by williaminsd
Wall Street liked the moves. AA stock up a record 41% at close today with nearly 400 million shares traded. AA also cites a "slow but steady rise in domestic demand" in the linked article suggesting the worst of the lockdown is behind us.

https://www.marketwatch.com/story/ameri ... 2020-06-04

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 10:19 pm
by MIflyer12
joeblow10 wrote:
As much as A.net hates on Dougie - AA’s strategy may very well be paying off. I don’t think it’s any coincidence AA has been flying more passengers than DL/UA for the past couple of weeks (somebody had mentioned they carried 100K/day the last week of May, DL/UA were closer to 60K). AA and WN may very well come out of this in far better shape


It's a good time to return to publishing monthly traffic summaries with ASM/RPM and load factors, a practice AA discontinued in 2017, because, you know, too much information is bad for investors.

Exec cuts are voluntary departures, no doubt with generous departure terms.

Passengers carried means nothing on cash burn (we're so far from profitability it's silly to use the word) without average fares and load factors.

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 10:28 pm
by UpNAWAy
I agree cash burn, not profit right now is the main concern and goal. If AA can drop they burn down significantly for the 3rd qtr and get close to break even by 4th qtr no BK will be on the horizon.

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 10:35 pm
by tphuang
UpNAWAy wrote:
I agree cash burn, not profit right now is the main concern and goal. If AA can drop they burn down significantly for the 3rd qtr and get close to break even by 4th qtr no BK will be on the horizon.

without massive layoffs, breaking even for legacies with all those widebody pilots sitting around is just not possible. Up to this point, AA has been burning cash significantly more than DL and UA.

People can question DL/UA capacity decisions, but those 2 are doing what they can to minimize cash burn. All this additional capacity for July is not going to be great for LF or fares.

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 10:54 pm
by nc3rd
tphuang wrote:
UpNAWAy wrote:
I agree cash burn, not profit right now is the main concern and goal. If AA can drop they burn down significantly for the 3rd qtr and get close to break even by 4th qtr no BK will be on the horizon.

without massive layoffs, breaking even for legacies with all those widebody pilots sitting around is just not possible. Up to this point, AA has been burning cash significantly more than DL and UA.

People can question DL/UA capacity decisions, but those 2 are doing what they can to minimize cash burn. All this additional capacity for July is not going to be great for LF or fares.

How do you have any idea what amount of money it takes for AA to break even right now?

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 10:57 pm
by tphuang
nc3rd wrote:
tphuang wrote:
UpNAWAy wrote:
I agree cash burn, not profit right now is the main concern and goal. If AA can drop they burn down significantly for the 3rd qtr and get close to break even by 4th qtr no BK will be on the horizon.

without massive layoffs, breaking even for legacies with all those widebody pilots sitting around is just not possible. Up to this point, AA has been burning cash significantly more than DL and UA.

People can question DL/UA capacity decisions, but those 2 are doing what they can to minimize cash burn. All this additional capacity for July is not going to be great for LF or fares.

How do you have any idea what amount of money it takes for AA to break even right now?


Well just a week ago, they were still saying they were still burning $70 million a day. There is a long way to go from there to being cash neutral.

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 11:24 pm
by LCDFlight
tphuang wrote:
nc3rd wrote:
tphuang wrote:
without massive layoffs, breaking even for legacies with all those widebody pilots sitting around is just not possible. Up to this point, AA has been burning cash significantly more than DL and UA.

People can question DL/UA capacity decisions, but those 2 are doing what they can to minimize cash burn. All this additional capacity for July is not going to be great for LF or fares.

How do you have any idea what amount of money it takes for AA to break even right now?


Well just a week ago, they were still saying they were still burning $70 million a day. There is a long way to go from there to being cash neutral.


A big axe going thru executive ranks is not to save money.

It is to prepare labor for big layoffs, which is where the real money is saved. Has to be. A company can't burn >$50m per day. That's 5 billion per 100 days.

Having said that, TSA numbers show this week is above last week's holiday numbers. Today is still up about 8% rolling 7-day average passenger count week over week. Above Memorial Day week. This a sign there is real strength happening. But the recovery is not quick enough that all employees can be kept on payroll. People need to cool out for 6 months.

Re: AA announces executive cuts - new COO

Posted: Thu Jun 04, 2020 11:55 pm
by airlineaddict
LCDFlight wrote:
Having said that, TSA numbers show this week is above last week's holiday numbers. Today is still up about 8% rolling 7-day average passenger count week over week. Above Memorial Day week. This a sign there is real strength happening. But the recovery is not quick enough that all employees can be kept on payroll. People need to cool out for 6 months.


Totally agree. 8% increase on 10% of normal traffic gets to 11%... still a long way to go.

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 1:06 am
by NWAROOSTER
This reorganization appears to leave at lest eighteen vice presidents and possibly about six more along with some more possibly unidentified more senior management that most likely are all collecting six figure salaries which in my opinion needs further reduction. Upper management needs to earn their salaries by carrying an appropriate workload. The grunts are the employees that need to have the responsibilities and initiative make the airline succeed while not donating from their salaries and benefits to fund the excesses of too many VPs and other higher ups. :old:

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 1:31 am
by PI4EVR
It is nice to see Donna Paladini continue her management strength and leadership background in airport operations. A LUS Manager, I had the pleasure to work with Donna, and was very impressed with her leadership style. Employee and customer focused she lead by example and managed a diverse and demanding position at US many years ago. Congratulations and Best Wishes to Donna as her career continues to soar.

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 1:38 am
by alasizon
NWAROOSTER wrote:
This reorganization appears to leave at lest eighteen vice presidents and possibly about six more along with some more possibly unidentified more senior management that most likely are all collecting six figure salaries which in my opinion needs further reduction. Upper management needs to earn their salaries by carrying an appropriate workload. The grunts are the employees that need to have the responsibilities and initiative make the airline succeed while not donating from their salaries and benefits to fund the excesses of too many VPs and other higher ups. :old:


AA's VP load isn't bad when compared with UA. There are a few VPs that also don't have any MDs below them which is a good thing for work distribution and not wasting payroll.

tphuang wrote:
Well just a week ago, they were still saying they were still burning $70 million a day. There is a long way to go from there to being cash neutral.

The $70 million figure is about three to four weeks old. Rough estimates are right around 47-48/day as of last week or the week before.

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 1:48 am
by tphuang
alasizon wrote:
NWAROOSTER wrote:
This reorganization appears to leave at lest eighteen vice presidents and possibly about six more along with some more possibly unidentified more senior management that most likely are all collecting six figure salaries which in my opinion needs further reduction. Upper management needs to earn their salaries by carrying an appropriate workload. The grunts are the employees that need to have the responsibilities and initiative make the airline succeed while not donating from their salaries and benefits to fund the excesses of too many VPs and other higher ups. :old:


AA's VP load isn't bad when compared with UA. There are a few VPs that also don't have any MDs below them which is a good thing for work distribution and not wasting payroll.

tphuang wrote:
Well just a week ago, they were still saying they were still burning $70 million a day. There is a long way to go from there to being cash neutral.

The $70 million figure is about three to four weeks old. Rough estimates are right around 47-48/day as of last week or the week before.


On May 27th, I saw a post from JonNYC stating a manager said they were losing $70 million a day. I guess we will find out in a month what their June burn rate really is.

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 1:59 am
by NYCAAer
PI4EVR wrote:
It is nice to see Donna Paladini continue her management strength and leadership background in airport operations. A LUS Manager, I had the pleasure to work with Donna, and was very impressed with her leadership style. Employee and customer focused she lead by example and managed a diverse and demanding position at US many years ago. Congratulations and Best Wishes to Donna as her career continues to soar.


Other than Vasu Raja, Maya Leibman and Jill Surdek, ALL of management is LUS. LAA was pretty much given the heave-ho.

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 2:46 am
by cschleic
tphuang wrote:
alasizon wrote:
NWAROOSTER wrote:
This reorganization appears to leave at lest eighteen vice presidents and possibly about six more along with some more possibly unidentified more senior management that most likely are all collecting six figure salaries which in my opinion needs further reduction. Upper management needs to earn their salaries by carrying an appropriate workload. The grunts are the employees that need to have the responsibilities and initiative make the airline succeed while not donating from their salaries and benefits to fund the excesses of too many VPs and other higher ups. :old:


AA's VP load isn't bad when compared with UA. There are a few VPs that also don't have any MDs below them which is a good thing for work distribution and not wasting payroll.

tphuang wrote:
Well just a week ago, they were still saying they were still burning $70 million a day. There is a long way to go from there to being cash neutral.

The $70 million figure is about three to four weeks old. Rough estimates are right around 47-48/day as of last week or the week before.


On May 27th, I saw a post from JonNYC stating a manager said they were losing $70 million a day. I guess we will find out in a month what their June burn rate really is.


Losing $70 million as in accounting loss or cash burn? They can be two very different things.

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 3:08 am
by AA94
cschleic wrote:
Losing $70 million as in accounting loss or cash burn? They can be two very different things.


Cash burn. Not sure if the $70m figure is still accurate, but it was definitely cash burn.

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 6:00 am
by Detroit313
Great to see Vasu Raja having more responsibilities. He is really smart.

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 7:26 am
by bluecrew
joeblow10 wrote:
As much as A.net hates on Dougie - AA’s strategy may very well be paying off. I don’t think it’s any coincidence AA has been flying more passengers than DL/UA for the past couple of weeks (somebody had mentioned they carried 100K/day the last week of May, DL/UA were closer to 60K). AA and WN may very well come out of this in far better shape

Heck, DL apparently is just going to fly around planes 60% full until there’s a vaccine. Good for consumer confidence, not so good for financials

DL and UA have the money to burn... they were in very sound financial positions entering into this.
AA was not. Not a lot of cash on hand and they spent literally all of it on stock buybacks. DL and UA had some greattt years in a row building up on profitability whereas AA had quite a few simply average years, alienated almost their entire workforce with the anemic profit-sharing and incessant labor disputes, and are emerging from this crisis in a vulnerable state.
I don't think they'll go Ch. 11, but the thought is there, and sometimes that is enough. A downside of retiring many of your owned aircraft is giving your lessors more leverage in keeping your fleet active, so a cash crunch can be a bit more volatile. I think it's a VERY open question as to what happens with AA. If demand picks up again, great! No problem. The company bounces right back, hopefully! Otherwise, I think they are in a very tough spot.

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 1:45 pm
by UpNAWAy
The market doesn't agree up another 35% this morning, that's insane the last 2 days.

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 2:50 pm
by joeblow10
bluecrew wrote:
joeblow10 wrote:
As much as A.net hates on Dougie - AA’s strategy may very well be paying off. I don’t think it’s any coincidence AA has been flying more passengers than DL/UA for the past couple of weeks (somebody had mentioned they carried 100K/day the last week of May, DL/UA were closer to 60K). AA and WN may very well come out of this in far better shape

Heck, DL apparently is just going to fly around planes 60% full until there’s a vaccine. Good for consumer confidence, not so good for financials

DL and UA have the money to burn... they were in very sound financial positions entering into this.
AA was not. Not a lot of cash on hand and they spent literally all of it on stock buybacks. DL and UA had some greattt years in a row building up on profitability whereas AA had quite a few simply average years, alienated almost their entire workforce with the anemic profit-sharing and incessant labor disputes, and are emerging from this crisis in a vulnerable state.
I don't think they'll go Ch. 11, but the thought is there, and sometimes that is enough. A downside of retiring many of your owned aircraft is giving your lessors more leverage in keeping your fleet active, so a cash crunch can be a bit more volatile. I think it's a VERY open question as to what happens with AA. If demand picks up again, great! No problem. The company bounces right back, hopefully! Otherwise, I think they are in a very tough spot.


AA is definitely playing the “high risk, high reward” game. I would argue they don’t have a choice. They’ve lagged worlds behind DL/UA for years now. If demand doesn’t pick up, it’s going to be difficult to see them not filing for bankruptcy. But if it does, they will likely emerge in a much stronger position. I would guess that’s a bet the management team is willing to take

Re: AA announces executive cuts - new COO

Posted: Fri Jun 05, 2020 2:55 pm
by NWAESC
Boda was a polarizing figure at NW, but I kind of liked her style. She had no time for BS.