American Airlines isn’t getting any traction on deals with any of its unions.  In the pilot negotiations, there was a push for a deal but leadership in those negotiations just kind of faded away and each party went to the press to plead their case instead.

Tentative deals are being denounced by membership in the TWU and the flight attendants are eerily quiet but some of the most militant at American Airlines.

Suddenly, not only analysts are using the “B” word but even employees seems to becoming familiar with the idea.  It’s a word that should never be used lightly.

The AMR board met last week and a few new directors were brought on board but anything else that was discussed has so far been kept quiet.  In fact, almost too quiet. 

Will the board willingly go into bankruptcy?  No, I do not think so.  Their job is to manage in the interests of shareholders.  If bankruptcy comes along, the biggest losers of all will be shareholders as their ownership will evaporate.  Creditors will get something.  Employees will get nothing additional and likely face years more of negotiations for anything.

Several current generation CEOs of airlines like to talk about how it’s a business and it should be managed as a business.  Return on investments and profits should be the focus.  We couldn’t agree more but . . .

Airlines require very strong leadership.  Leadership isn’t just providing a return on investment or earning profits.  In fact, neither of those are possible if you don’t have the interests of your large workforce aligned with those goals. 

And if the workforce is unhappy and resentful, it isn’t interested in the company goals. 

American Airlines is lacking in leadership.  It has all the management an airline could ask for but nono of the leadership it needs.  It means getting everyone on the same page working towards common goals and doing so in the best interests of everyone.  Does that sound like AA leadership?

Everyone is way too comfortable with the idea of bankruptcy.  I think the employees look upon it as almost welcome in that it almost certainly means the end of the Arpey regime.   When it’s gotten that far, it may well be time for the board to act and install a leader before that shareholder value goes poof.

Filed under: Airline News by ajax