It’s an uncertain moment for the airline industry, as COVID-19 vaccines offer hope of renewed travel even as new variants of the disease threaten that progress. American Airlines President Robert Isom, for one, is optimistic.
“Right now it does look like domestically we’re on a sustained, gradual improvement,” Isom told a Yale School of Management audience on March 30. “I see this summer as one of still rebuilding.”
The pandemic decimated business at American Airlines, just as it did at all commercial carriers. American saw customer demand drop 90%, and revenue drop even lower, Isom said. “The last year has been clearly the worst experience I’ve had in my long career in the airline business, and at other places, too.”
But, Isom added, the pandemic also forced the airline to recommit to its core calling. “We care for people on life’s journey,” he said. “We are a people business. That’s helped us get through this, knowing that we’re in this together.”
The virtual discussion with Isom was part of the school’s Leaders Forum lecture series, which business leaders from all sectors to Yale to share their experiences. Isom discussed his airline’s response to the pandemic, its priorities for 2021, and the future of air travel.
Jeffrey Sonnenfeld, senior associate dean for leadership studies and Lester Crown Professor in the Practice of Management, made opening remarks, and Kevin Williams, associate professor of economics, served as moderator.
Three strategies have helped American weather the past year, Isom said: having enough liquidity on hand, reassuring the public about the risks of flying, and ensuring the safety and wellbeing of both passengers and airline employees. Government funding and emergency negotiation with unions helped.
“It was an opportunity for us to show we really care for our team,” Isom said. “We’ve had to be incredibly transparent and increase communication as never before.”
To help cut operating costs, the airline offered various early-leave programs to employees. It also ramped up benefits, including additional paid leave for employees impacted by illnesses or contact tracing, and, now, on-site vaccinations.
Guided by medical research and data on transmission, the airline also launched stringent sanitary and air-quality measures in all aircraft, such that Isom said he is confident that the risk of catching the disease on a plane is relatively low. “We’ve been able to create a safe environment for customers,” he said.
While domestic travel has ticked up somewhat, demand for international flights remains low. Increased vaccination rates will hopefully make customers more comfortable flying, Isom said, and encourage countries to ease border restrictions.
While seats have been empty this year, the cargo hold in the belly of the plane beneath them have been fuller than ever, Isom noted. Chartered cargo flights to move goods around the world is one revenue stream that’s increased for American Airlines during the pandemic.
And COVID-19 has provided an opportunity for the airline to ask itself the question every business should be asking these days, Isom said: “How can we help the country, as much as possible, keep the wheels moving?”
About the Event
The Dean's Office invites you to join a Leaders Forum lecture with American Airlines President Robert Isom. Isom will discuss American's response to the pandemic, the airline's priorities for 2021, and the future of air travel.
Opening remarks will be provided by Jeffrey A. Sonnenfeld, senior associate dean for leadership studies and Lester Crown Professor in the Practice of Management. The moderator will be Kevin Williams, associate professor of economics.
The Leaders Forum brings the heads of organizations from across all sectors to SOM for discussions about the challenges and opportunities of leadership.