General Lee
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- Aug 24, 2002
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From the Feb. 24, PlaneBusinessBanter
2003 PlaneBusiness Ron Allen Airline Management Award
Since 1997, PlaneBusiness has awarded the Ron Allen Airline Management Award to those members of airline management who exemplify what is not good about this industry.
The award is named in honor of Ron Allen, the former chairman and CEO of Delta Air Lines. Ron, as many of you no doubt remember, was known for many things. Playing golf was one of them. Not being able to send an email message was another.
But one thing he will not be remembered for is his managerial excellence, much less his leadership ability.
In what was actually a rather short period of time, Allen essentially dismantled the airline's existing culture that was present at the time, along with its then-excellent reputation for passenger service. This was done as part of the quest for his self-imposed holy grail -- a 7.5-cent-per-mile CASM. Oh, and yes, in his zeal to "cut costs," he didn't improve the airline's financials either -- as he forgot that it takes a maximization of revenue, along with lower costs, to make an airline profitable.
Then there was the Delta debacle in Europe. Here, the parochial management mindset in Atlanta never stopped to think that no one in Europe would know who the heck Delta was -- as they took over Pan Am routes. Luckily, the airline eventually recovered from that part of the story -- but not without a cost.
I could go on, but you get the picture.
In case you are new to PlaneBusiness, here is a list of the past recipients of this somewhat dubious honor.
1997: Ron Allen, CEO Delta Air Lines
1998: Robert Ayling, CEO, British Airways
1999: Stephen Wolf and Rakesh Gangwal, US Airways
2000: Bill Franke, CEO America West Airlines
2001: Jim Goodwin, CEO United Airlines
2002: The Board of Directors of United Airlines
As you can see, last year the recipient of the award was not an individual, but a group of individuals.
This year, we change the mold again, as we name two airline executives who we feel are certainly worthy of the award -- but, unlike 1999 -- these two men are not from the same airline.
However, just an additional mention. Subscriber sentiment for Leo Mullin to win this year's award was also exceedingly high. So high, in fact, that this year, we also award an honorable mention to former CEO Leo Mullin from Delta Air Lines.
What's really scary is that while Leo's transgressions would have normally locked up the award in his name this year, we found two other airline CEOs who were even more deserving.
Don Carty
Don "Ooooh, I must have forgotten to mention that" Carty is the first recipient this year. As one subscriber wrote, "This one is a no-brainer, although Leo 'What Compensation Problem?' Mullin deserves honorable mention."
The overwhelming favorite of subscribers for the award this year, we feel that yes, Don is certainly worthy of being included in the prestigious list of Ron Allen award recipients.
And before you think that Don is here only because he did not think to mention certain important items to union officials last spring, no, Don was suspect long before then.
Remember that American had a long time to sit on the sidelines in 2002 and the first part of 2003. As I discussed here at the time, while the airline talked about how it was trying to cut costs, we really did not hear any constructive information from the airline at all in terms of structural or cultural changes that would attempt to change the flow of red ink.
In fact, the joke going around in some circles was that the airline was merely sitting on its hands, waiting for United to file for bankruptcy.
As though this act, in itself, would then serve to leave the domestic airline world to American on a silver platter.
Not.
United did finally file for bankruptcy, but American was, by that time, not that far behind them. The smug attitude the airline had been giving off previously was now gone.
In February of last year, I wrote a column highly critical of the prevalent management culture at American. I am convinced that Don Carty was a firm believer in that culture, and saw nothing wrong with it.
In fact, however, it was exactly this mindset that set Carty up for his eventual demise.
While it was bad enough for Carty to have done what he did last spring, it is even more amazing to read comments from him that have been made after the fact. As you may recall, I discussed two of the more widely circulated post-event interviews with Carty this past year here in PBB.
The overriding truth that comes out in both of these interviews is that the man simply does not understand. He still doesn't get it.
He blames the media. He says that people "overreacted." He fails to understand problems that were there with the management of the airline, prior to his rather theatrical demise last year, that made what happened -- happen.
No, Don, you screwed up. And the seeds of your final screw-up were planted long before last April.
Dave Siegel
This year's co-winner of the Ron Allen Award is Dave Siegel, CEO of US Airways.
In the case of Siegel, we feel the award is justified because of a lack of management intelligence.
And oh, what hopes we had for Mr. Siegel.
Going into the US Airways bankruptcy process and even as the airline prepared to come out of the proceedings, Siegel and his management team continued to say the right things. They had a plan. They were going to restructure the airline. Things were going to be different. They worked well with creditors, attempting to restructure agreements.
And?
And nothing.
Bankuptcy came and went. And nothing happened.
As I pointed out in August, when I publicly asked Dave to tell us just what the heck his plan was for the airline, there had been no major changes made to the route structure, no changes to aircraft usage, no significant changes in the airline's pricing structure -- no changes to much of anything.
It would almost appear now that the management team took the position from the beginning that business was going to be "as usual." Competitors were not going to smell blood and turn up the competitive pressure. Revenues were simply going to improve for no reason at all, and the airline's fortunes would just suddenly, for some mysterious reason, change. Overnight.
I guess Dave and company believe in the tooth fairy too.
In the latest installment of the US Airways soap opera this past week, we saw the "good cop, bad cop" method being employed by the airline's chairman, David Bronner, as he convinced the airline's pilots to support him, as the airline now begins yet another round of concession seeking.
This performance, however, was not attended by Mr. Siegel -- begging the question, "Where's Dave?"
The airline continues to lose top talent, and the employees at the airline feel that once again, they have been lied to.
I don't blame them. They have been.
I feel betrayed and I don't even work for the man.
But, I believed him when he said he was going to do what it took to make the airline profitable.
The sad thing? There were things that could have been done, and should have been done. But way before now.
While Mr. Bronner was meeting with the pilots this past week, pulling out all the stops with his down-home Alabama humility routine, one had to stop and wonder.
Okay, the wonder kid from Harvard has done nothing.
And now the pilots are going to back the pension fund administrator from Alabama, who readily admits the investment in US Airways is only 1% of his portfolio. The same man who knows nothing about running an airline.
The sad thing here -- what's the pilots' alternative?
No, I believed you Dave Siegel. I thought you had the answers. I thought you, if anyone, could pull this thing off. You had convinced me. And others. But you didn't. And you aren't going to.
It's too late now.
For this, you too are a worthy recipient of the Ron Allen Award.
Bye Bye--General Lee
2003 PlaneBusiness Ron Allen Airline Management Award
Since 1997, PlaneBusiness has awarded the Ron Allen Airline Management Award to those members of airline management who exemplify what is not good about this industry.
The award is named in honor of Ron Allen, the former chairman and CEO of Delta Air Lines. Ron, as many of you no doubt remember, was known for many things. Playing golf was one of them. Not being able to send an email message was another.
But one thing he will not be remembered for is his managerial excellence, much less his leadership ability.
In what was actually a rather short period of time, Allen essentially dismantled the airline's existing culture that was present at the time, along with its then-excellent reputation for passenger service. This was done as part of the quest for his self-imposed holy grail -- a 7.5-cent-per-mile CASM. Oh, and yes, in his zeal to "cut costs," he didn't improve the airline's financials either -- as he forgot that it takes a maximization of revenue, along with lower costs, to make an airline profitable.
Then there was the Delta debacle in Europe. Here, the parochial management mindset in Atlanta never stopped to think that no one in Europe would know who the heck Delta was -- as they took over Pan Am routes. Luckily, the airline eventually recovered from that part of the story -- but not without a cost.
I could go on, but you get the picture.
In case you are new to PlaneBusiness, here is a list of the past recipients of this somewhat dubious honor.
1997: Ron Allen, CEO Delta Air Lines
1998: Robert Ayling, CEO, British Airways
1999: Stephen Wolf and Rakesh Gangwal, US Airways
2000: Bill Franke, CEO America West Airlines
2001: Jim Goodwin, CEO United Airlines
2002: The Board of Directors of United Airlines
As you can see, last year the recipient of the award was not an individual, but a group of individuals.
This year, we change the mold again, as we name two airline executives who we feel are certainly worthy of the award -- but, unlike 1999 -- these two men are not from the same airline.
However, just an additional mention. Subscriber sentiment for Leo Mullin to win this year's award was also exceedingly high. So high, in fact, that this year, we also award an honorable mention to former CEO Leo Mullin from Delta Air Lines.
What's really scary is that while Leo's transgressions would have normally locked up the award in his name this year, we found two other airline CEOs who were even more deserving.
Don Carty
Don "Ooooh, I must have forgotten to mention that" Carty is the first recipient this year. As one subscriber wrote, "This one is a no-brainer, although Leo 'What Compensation Problem?' Mullin deserves honorable mention."
The overwhelming favorite of subscribers for the award this year, we feel that yes, Don is certainly worthy of being included in the prestigious list of Ron Allen award recipients.
And before you think that Don is here only because he did not think to mention certain important items to union officials last spring, no, Don was suspect long before then.
Remember that American had a long time to sit on the sidelines in 2002 and the first part of 2003. As I discussed here at the time, while the airline talked about how it was trying to cut costs, we really did not hear any constructive information from the airline at all in terms of structural or cultural changes that would attempt to change the flow of red ink.
In fact, the joke going around in some circles was that the airline was merely sitting on its hands, waiting for United to file for bankruptcy.
As though this act, in itself, would then serve to leave the domestic airline world to American on a silver platter.
Not.
United did finally file for bankruptcy, but American was, by that time, not that far behind them. The smug attitude the airline had been giving off previously was now gone.
In February of last year, I wrote a column highly critical of the prevalent management culture at American. I am convinced that Don Carty was a firm believer in that culture, and saw nothing wrong with it.
In fact, however, it was exactly this mindset that set Carty up for his eventual demise.
While it was bad enough for Carty to have done what he did last spring, it is even more amazing to read comments from him that have been made after the fact. As you may recall, I discussed two of the more widely circulated post-event interviews with Carty this past year here in PBB.
The overriding truth that comes out in both of these interviews is that the man simply does not understand. He still doesn't get it.
He blames the media. He says that people "overreacted." He fails to understand problems that were there with the management of the airline, prior to his rather theatrical demise last year, that made what happened -- happen.
No, Don, you screwed up. And the seeds of your final screw-up were planted long before last April.
Dave Siegel
This year's co-winner of the Ron Allen Award is Dave Siegel, CEO of US Airways.
In the case of Siegel, we feel the award is justified because of a lack of management intelligence.
And oh, what hopes we had for Mr. Siegel.
Going into the US Airways bankruptcy process and even as the airline prepared to come out of the proceedings, Siegel and his management team continued to say the right things. They had a plan. They were going to restructure the airline. Things were going to be different. They worked well with creditors, attempting to restructure agreements.
And?
And nothing.
Bankuptcy came and went. And nothing happened.
As I pointed out in August, when I publicly asked Dave to tell us just what the heck his plan was for the airline, there had been no major changes made to the route structure, no changes to aircraft usage, no significant changes in the airline's pricing structure -- no changes to much of anything.
It would almost appear now that the management team took the position from the beginning that business was going to be "as usual." Competitors were not going to smell blood and turn up the competitive pressure. Revenues were simply going to improve for no reason at all, and the airline's fortunes would just suddenly, for some mysterious reason, change. Overnight.
I guess Dave and company believe in the tooth fairy too.
In the latest installment of the US Airways soap opera this past week, we saw the "good cop, bad cop" method being employed by the airline's chairman, David Bronner, as he convinced the airline's pilots to support him, as the airline now begins yet another round of concession seeking.
This performance, however, was not attended by Mr. Siegel -- begging the question, "Where's Dave?"
The airline continues to lose top talent, and the employees at the airline feel that once again, they have been lied to.
I don't blame them. They have been.
I feel betrayed and I don't even work for the man.
But, I believed him when he said he was going to do what it took to make the airline profitable.
The sad thing? There were things that could have been done, and should have been done. But way before now.
While Mr. Bronner was meeting with the pilots this past week, pulling out all the stops with his down-home Alabama humility routine, one had to stop and wonder.
Okay, the wonder kid from Harvard has done nothing.
And now the pilots are going to back the pension fund administrator from Alabama, who readily admits the investment in US Airways is only 1% of his portfolio. The same man who knows nothing about running an airline.
The sad thing here -- what's the pilots' alternative?
No, I believed you Dave Siegel. I thought you had the answers. I thought you, if anyone, could pull this thing off. You had convinced me. And others. But you didn't. And you aren't going to.
It's too late now.
For this, you too are a worthy recipient of the Ron Allen Award.
Bye Bye--General Lee
