Management Layoffs Coming at American Airlines

When American Airlines and US Airways merged four and a half years ago many legacy American Airlines executives departed. Several management level staff that were holdovers from American before the merger left two years ago, presumably eligible for bonuses based on the length of time they had stayed on.

In any merger of this size there are initial promises of cost savings, and personnel is one area where those need to be delivered.

Last fall airline CFO Derek Kerr shared that they planned to “further eliminat[..] post-merger redundancies” and that we’d begin to see those in 2018.

Today American announced to its employees that those are coming at the Director level and above. Now that most (but not all) of the merger integration work is done they’re looking at their management staff count. Doug Parker’s letter to employees says that the airline “has more director and above leaders than we require for the long term.”

Over the next few weeks each ‘director and above’ employee will learn their fate as some face “involuntary exits” and those being let go who have two or more years with the company are offered the chance to leave voluntarily with severance. We can also expect some other management positions to be eliminated as well.

Here’s the letter that was shared with American employees today:

None of this is surprising. If I were placing a bet I’d expect more legacy American Airlines employees to be let go than US Airways management veterans, however we’ll have to see in the comings weeks what happens.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. You say you “bet” more AA will be let go than US…but, in reality, you have absolutely no idea, right?

  2. Doug “Buffoon” Parker did not write that letter.

    Ever hear him talk? He sounds drunk and and disoriented.

  3. Well there are more legacy AA folks than legacy US, so the assumption is probably accurate that more of the AA people will be removed

  4. How about shaking up the PSA team too?

    Did we ever get a ruling on what really happened?

  5. It would be great IF Parker is the next to go next month. I quit flying AA last year due to Fat Pig Parker. Most of my trips are now on Alaska, JetBlue (and Delta once in a blue moon) for domestic travel. For international, I jet on JAL, CX, QF, LH, AirAsia, Garuda, Singapore.

  6. @mark: “If I were placing a bet I’d expect more legacy American Airlines employees to be let go than US Airways management veterans, however we’ll have to see in the comings weeks what happens.”

    “If…” “however we’ll have to see…”

    Your comment was a real swing and miss this time. You’re stretching to criticize, right?

  7. I think the layoffs are a superb idea. The only problem is that the wrong people are getting laid off. The company should start with Parker, then anyone on the board who thought that bringing in Parker was a good idea, then anyone who thought the new 737 configuration was a good idea. Then any executive who has not flown economy on the new plane for 4+ hours. That would be a great start.

  8. I want you to know being called fat, clueless and dispensable really hurt my feelings. Just for that I’m going to put in 3-4 seating in the 737’s

  9. Hmmm… I am scratching my head. He has said many times, the fundamentals of the industry have changed. Reading this, sounds like it’s the same old airline industry.

  10. I’m not sure I’d want to be a AA director level or above and living in PHX but that’s just a “bet” on my part I “really have no idea”

  11. @ Dug Parker

    Go big or go home. You can fit 9 across if you eliminate armrests, force people to walk down the aisles sideways, and make each seat 14.4″ wide. Think “domestic tour buses in Japan.”

    Now go! Live your dreams and don’t let anyone tell you that the customers matter!

  12. Sadly, most of middle mgmt that had a clue how to run a legacy carrier were already let go, now the remaining ones will be gone. We will be left with those who are trying to run a legacy carrier like a regional. Next move will be another BK. Cleaning house should start at the very top.

  13. Been expecting this. They should be able to get rid of a lot. After the merger the incoming LUS management added so many positions at the senior levels it boggled the mind. AA was super lean after the bankruptcy before the merger. My level 6 manager reported directly to a VP for example. After the merger LUS brought back the level 7 management position (Director) that had not existed at AA since the 1990s (Managing Director could be either level 7 or 8 then). Now you can’t swing a dead cat without hitted 3 or 4 directors at HDQ. At the lower worker bee levels I expect many project manager individual contributer types (levels 3-4) to be let go. HDQ is overrun with those types as well.

  14. I think any LAA employee at or above “director” level, especially NYC based employees, should start preparing their resumes.

    I also think layoffs should include whoever decided the 737MAX configuration, whoever gutted AAdvantage program, and any customer facing employees who are consistently rude to customers.

  15. Note the obvious parallel in the transportation industry by those at the top hollowing out the most experienced, competent layers; and creating an unresolvable vacuum of knowledge and leadership to flounder until the next deep recession.

    Amtrak is in crisis mode from the buy-outs and re-organizations that have depleted its ranks of those who knew how to run passenger trains, understood the relevance of customer experience in food & beverage services, on-board services, etc. Just like AA wrongly relying upon RJs to inappropriately serve markets, Amtrak has let out its thoughts of breaking up the long distance routes into runs of 750 or less miles to be equipped with suburban-type trains! Of course, this is just a cute way of dumping the costs of those routes upon the states.

    It appears the travails of the transportation business accelerated when the “bean counters” and investors took over from those skilled in operations and marketing. Amazing how a total industry, but for a few players like Alaska and Jet Blue, dives into the toilet at full speed.

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