American Airlines: Challenges Ahead Include Merging Systems, Changing Alliances, and Aligning In-Flight Service

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MANAGEMENT TEAM APPOINTED

Maya Leibman, currently American’s CIO, will continue in that role at the merged airline.  Elise Eberwein, of US Airways, will function as executive vice president for people and communications, the same role she currently has at US.  Beverly Goulet of American Airlines will be the chief integration officer, responsible for overseeing the merging of the two airlines.  Robert Isom of US Airways will take on the duties of chief operating officer of American Airlines Group and CEO of US Airways, which will continue to operate as a separate airline following the merger until full integration is accomplished.

Other appointments include Stephen Johnson, also of US Airways, as executive vice president for corporate affairs that deal with legal, governmental, and regulatory issues, and Derek Kerr of US Airways as chief financial officer.  William Ris will become senior vice president of government affairs, a position similar to his current one at American.

The style that the US Airways executives will bring to the table is quite different from that which is found at the much larger airline.  Indeed, the merger may well cause a culture clash between the very button-down managers at American and the open-collar, more off-the-cuff team at US Airways.    US Airways employees, following the cue from their CEO, Doug Parker, are less formal and might not always toe the corporate line, while American’s are far more process driven, prone to dotting all the i’s and crossing all the t’s before pulling the trigger.

AMERICAN AIRLINES’ TO-DO LIST

The US Airways brand will linger for quite some time after the merger.  American Airlines Group will have to obtain a single operating certificate from the Federal Aviation Administration. This can take quite some time as United and Delta discovered after their mergers.

In addition, American’s management team will have to decide if it will keep the new livery adopted by the airline in January of this year.  As of the middle of last month, American had painted 148 planes or 25% of its current fleet with the new livery, including 20 767-300s, 26 777-200s, and nine of its new 777-300ERs.

Regardless of the decision on the new livery, American will have to repaint most of US Airways’ aircraft, except for planes that will soon be retired, either with the new American livery or with yet another livery.

Other tasks include relocating its gates at many airports (US Airways moved to American’s terminal at JFK last month), changing and updating airport signs, and ordering new uniforms for many employees.

American will migrate US Airways’ operations over to the reservation system it currently uses, Sabre.  The software acts as a nerve center for everything from actual flight bookings to managing frequent-flyer accounts and checking passengers in.  US Airways senior vice president of planning and marketing Andrew Nocella said the airline would “look for where the least disruption would be” in a system conversion and this influenced the decision to opt for the larger airline’s system.

Another hurdle is in labor relations.  While many employee workgroups accepted transitional merger agreements early in the process, combining workforces and merging seniority lists may not be as easy and tensions are already growing between the American Airlines flight attendants union and its counterpart at US Airways.

Lat week, American acknowledged what lies ahead in an internal newsletter.  “While it is exciting to prepare to close our merger, we know there is much work to be done.”

(Photos: Accura Media Group)

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