27th September 2023

American Airways Group Inc. AAL -0.22% Chief Govt Doug Parker will retire from that job subsequent 12 months after 20 years working airways, handing the reins to a longtime lieutenant as the corporate begins to emerge from the pandemic.

Robert Isom, who has served as American’s president since 2016, will take over as CEO on March 31, 2022, the corporate mentioned Tuesday. Mr. Parker will proceed to function chairman of American’s board.

Mr. Parker’s profession has been bookended by crises: He took the helm at America West Airways in 2001, simply 10 days earlier than the Sept. 11 terrorist assaults. Now he’s departing as airways attempt to transfer previous the Covid-19 pandemic. He has been a champion of consolidation, engineering mergers that remodeled the {industry} and constructed American into an {industry} big.

Mr. Parker was fast to acknowledge final 12 months that airways would wish monetary assist to keep away from disaster throughout the pandemic, turning into one of the vital vocal and visual advocates for a $54 billion authorities payroll help program. American was significantly weak, having entered the pandemic with extra debt than rivals.

That support helped avert hundreds of layoffs, nevertheless it has been referred to as into query currently by lawmakers who’ve change into annoyed that some carriers, together with American, have struggled with staffing and different issues as they’ve emerged from the pandemic.

Individuals who have labored with Mr. Parker have described him as good-natured and easygoing—a big-picture thinker who doesn’t shrink back from taking dangers. He charted an bold course for American by means of the pandemic, sustaining an even bigger schedule than many rivals in hopes of capturing extra income.

That has at instances contributed to stumbles. American needed to trim again flights in July because it struggled with pilot staffing, and extra just lately suffered a cascade of cancellations in late October.

Mr. Parker stored the airline from going bankrupt, an consequence that some analysts and {industry} observers had feared was doable because the pandemic started to roil the journey {industry}.

In an interview Tuesday, Mr. Parker mentioned the airline wasn’t at risk of going bankrupt final 12 months.

“We by no means obtained near it,” he mentioned. Nonetheless, he might need handed over the reins to Mr. Isom sooner if not for the pandemic.

“We had been in disaster mode and now we’re not anymore,” he mentioned. “We’ve obtained the corporate on sound monetary footing, demand’s coming again, and placing all that collectively, it feels precisely the proper time.”

Shares of American Airways turned detrimental Tuesday afternoon, falling 0.2% to $17.89, however are up about 13% 12 months up to now, increased than lots of its U.S. rivals.

American isn’t the one main U.S. airline going by means of a transition. Gary Kelly, Southwest Airways Co. ’s longtime CEO, can be set to retire early subsequent 12 months. United Airways Holdings Inc. Chief Govt Scott Kirby took the reins of that airline in Could 2020, following the retirement of Oscar Munoz.

American had confronted challenges even earlier than the pandemic decimated journey demand, the airline’s labor relations had change into strained and the service continuously lagged behind rivals when it got here to on-time efficiency and cancellations.

A few of Mr. Parker’s projections have proved to be overly rosy. In 2016, when American shares had been buying and selling at round $40, he wager an analyst a bottle of wine that American’s share value would hit $60 earlier than the analyst’s 60th birthday. He misplaced that wager in 2018.

Mr. Parker additionally predicted in 2017 that the airline {industry}’s days of booms and busts had been over: “I don’t assume we’re ever going to lose cash once more,” he mentioned on the time. “We have now an airline that’s going to be worthwhile in good and dangerous instances.” These phrases got here again to hang-out him final 12 months when the pandemic brought on journey to break down. American misplaced $8.9 billion final 12 months and has but to return to constant profitability.

It is going to fall to Mr. Isom to chart American’s course because it recovers from the pandemic and to grapple with the mountain of further debt the airline has taken on to outlive. Mr. Isom has been the airline’s inheritor obvious for years, for the reason that ouster of then-American President Scott Kirby in 2016.

“He’s the proper chief to hold American ahead into its subsequent interval of development,” John Cahill, American’s lead impartial director, mentioned in a press release.

A gaggle of just about 300 airways have dedicated to “internet zero” carbon emissions by 2050, however simply how are they going to get there? WSJ’s George Downs explores among the strategies the Worldwide Air Transport Affiliation has steered for emissions discount. Illustration: George Downs

Mr. Isom mentioned Tuesday that American had labored throughout the pandemic to place itself to thrive.

“In 2022, that’s actually ensuring we ship a dependable product as prospects come again and returning the airline to profitability as quickly as doable,” he mentioned. Mr. Isom mentioned the airline’s operations went easily throughout the busy Thanksgiving interval and vacation journey demand stays robust, regardless of the emergence of the Omicron variant.

Messrs. Parker’s and Isom’s careers have overlapped for 20 years.

Mr. Parker, the son of a supermarket-industry government, joined American in 1986 after getting his M.B.A. from Vanderbilt College. He left American in 1991, first becoming a member of Northwest Airways then heading to America West Airways, turning into that airline’s CEO in 2001.

Mr. Parker’s profession has been marked by huge swings, as he has seized probabilities to create bigger airways by means of mergers with larger rivals in moments of economic weak spot. In 2005, he led a merger between America West and US Airways Group Inc. because the {industry} struggled within the wake of Sept. 11 and US Airways was in Chapter 11 chapter safety.

A couple of years later, with American in chapter proceedings, Mr. Parker as soon as once more noticed a chance to mix two airways to create an {industry} big. American and US Airways merged in 2013, creating the world’s largest airline by visitors, with Mr. Parker on the helm. Because the merged firm’s first day of buying and selling, the inventory value had fallen about 27% by means of Monday, worse than lots of its U.S. rivals. Between the 2 offers, there have been setbacks: Mr. Parker’s US Airways failed in a 2006 hostile bid to take over Delta Air Strains Inc. and was rebuffed in merger talks with United.

Mr. Isom served as chief working officer of US Airways and led its operation following the America West merger, and later led the mixing with American after that mixture in 2013. He beforehand held positions at America West and Northwest Airways.

In a lawsuit this 12 months difficult a partnership between American and JetBlue Airways Corp. struck in 2020, the U.S. Division of Justice portrayed Mr. Parker in ominous phrases, saying he had been dubbed the “godfather of consolidation.”

Mr. Parker has argued that the tie-ups have resulted in a extra steady {industry} that has benefited each firms and shoppers. There are fewer airways immediately however every has larger attain, offering extra options for vacationers, higher service and decrease fares, he mentioned in a current interview.

Write to Alison Sider at alison.sider@wsj.com

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