American Airlines gave some top industry execs their start in 1980s

30 Dec

In an office at the end of a Dallas/Fort Worth Airport runway in the 1980s, the modern airline business was born.

There in cubicles with thin, gray carpet and shared computers, young graduates of top business schools were tasked with making sense of deregulation — a new era when the government no longer dictated routes or prices.

 

Under American Airlines’ then-CEO Robert Crandall, they issued the first frequent flier miles, developed the hub system and found a way to fill empty seats with deeply discounted fares. Standards were high. Perfection was demanded. Those who excelled were quickly promoted regardless of how young or new to the company they were. At the time, being a financial analyst on the second floor of American’s headquarters was unlike any other job in the industry.

Today, four of them are running airlines — including American.

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“It was a magical time,” said Virgin America CEO David Cush, 51. “You didn’t know where these guys were going to end up, but you knew you were hanging around with a bunch of smart guys.

“US Airways CEO Doug Parker, 50, and Spirit Airlines CEO Ben Baldanza, 50, got their start alongside Cush.

Tom Horton, the other member of this airline Brat Pack, arguably hit it even bigger — taking over as CEO of the airline where they all started. But the job that he inherited is a long way from American’s glory days under Crandall.

The 1980s “was sort of a golden moment for American,” said Michael Useem, director of the Center for Leadership and Change Management at the University of Pennsylvania’s Wharton School.

Today, American is struggling with old jets and high labor costs. Once the largest airline in the world, American is now in third place, behind Delta Air Lines and United-Continental Holdings, which became bigger and more efficient through mergers. But the most painful jab for the carrier came last month when American’s parent, AMR Corp., sought Chapter 11 bankruptcy protection — the same day it promoted Horton, 50.

Horton and Parker declined requests for interviews.

American didn’t just create CEOs. Dozens of its young financial analysts from the 1980s went on to become top executives at most of the major airlines. Others held senior roles at travel companies including Orbitz and Royal Caribbean.

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They all came to American because it was the center of innovation in an industry on the verge of a revolution. There were challenges found nowhere else. For instance: How do you create a curbside check-in system? These young analysts were driven by their bosses and one another. And nobody pushed harder than Crandall.

“The most competent got promoted very rapidly,” said Crandall, who retired in 1998. “That made American a very good place to work. And the consequence of that is we attracted a lot of very, very bright people.

“Crandall required major initiatives in other departments — from marketing to flight planning — to be vetted by the finance department, exposing the analysts to all aspects of the industry. “They didn’t care if you were too young or didn’t have enough years of experience. All they cared about was if you were competent and able to do a good job,” said Bernie Han, who worked at American from 1988 until 1991. He later became chief financial officer at America West and then Northwest. He is now chief operating officer of Dish Network.

American’s headquarters was an energetic place. Competition was fierce but friendly. The analysts often bounced ideas off one another while playing Nerf basketball in a cubicle.

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“If somebody did good work, the other guy wanted to do better work,” said Jeff Katz, an American alumnus who went on to become CEO of Swissair then led the online travel company Orbitz before landing the top job at Nextag, an online shopping website

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