The Dallas Morning News Airline Biz Blog has THIS entry about a reader question regarding American Airlines’ management and its board of directors.  Journalist Terry Maxon explains that AA’s board of directors is full of people with a long tenure and who are reluctant to “fire” the management as it would reflect upon them.

I don’t disagree with his analysis whatsoever.  To the contrary, it is the conundrum that many companies face in AA’s situation.  However, let’s refer to the definition of insanity for a moment:  Doing the same thing over and over again and expecting different results.

No one representing the shareholders (aka the board) is challenging the management (aka the CEO) to do better and to do things differently.  Yet, that’s exactly what American Airlines is in need of.  A better plan than a focus on its existing hubs that are under attack by leaner and meaner Super Legacy airlines.  It’s also in need of a management team that has a better chance of earning the trust of the employees.

The truth is, Tom Horton may or may not be the right guy.  We really don’t know that yet.  What we do know is that Tom Horton and the rest of the team are a part of a team that has existed at American Airlines in one form or another since the late 1990s.  That would be the team that has not succeeded in any real and measurable way but which has managed to simply maintain the status quo far longer than anyone imagined.

There are a number of talented CEOs out there and available to run an airline such as American Airlines.  I’ve already more than once expressed my thoughts that the executive team at US Airways could, in my opinion, do wonders for American Airlines.  But there are others who understand that the game has changed and that the game requires an entirely different thinking to succeed in what is by any standard a very anemic economy.

American has got one chance with this bankruptcy reorganization.  It’s not just about lowering costs (although that is a significant part of things).  It’s also about improving revenues and improving the profits as a result of those revenues and that’s something that hasn’t been going on at American Airlines for some time. 

Improving revenues is going to be done with more innovation in things like cabin service, routes and partnerships.  It may even improve with more de-bundling of services and different seating.  To get that innovation in place and earning money as American exits bankruptcy is going to require someone working on that now.

Instead, the perception is that American Airlines is actually focusing on who it is going to pay for aircraft and who it is going to leave with empty hands as a function of removing aircraft from its fleet. 

In addition, to succeed, the employees will require more motivation and leadership than they’ve seen in the last 15 years.  It won’t be easy for the airline to succeed existing bankruptcy without employees who are motivated to see it succeed.  Leadership and management aren’t the same thing.  The executive team is actually very, very good at financial management.  But it is very, very poor at leadership.

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