American Airlines Keeps Canceling Flights and Its CEO Is Taking the Heat
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September 4, 2019 - by Mary Schlangenstein for bloomberg.com
- Operational snarls add to investor gloom as shares tumble
- Parker sees 'absolute urgency' to correct the shortcomings
American is underperforming Delta Air Lines Inc. and United Airlines Holdings Inc. on profit margins and on-time arrivals. Investors are punishing American's stock, sending the shares to the biggest decline this year among U.S. transportation companies. And to add insult to injury, a plague of summertime flight cancellations has angered passengers and sullied American's brand.
It's far from the outcome Chief Executive Officer Doug Parker envisioned when, as head of US Airways, he engineered a merger with American in a New York bankruptcy court and took the reins of the combined company.
While Delta and United reap the rewards of a decade of airline consolidation and greater pricing power, American's declining performance has solidified its status as the industry laggard.
"I get the question, 'At what point does the board say enough is enough and we need more drastic change?"' said Jose Caiado, an analyst at Credit Suisse Group AG. "I get that question a lot these days."
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