New York, Tuesday, June 3, 2021 – American Airlines Group Inc. was facing turbulence in its executive ranks after the dismissal of its commercial chief officer, Vasu Raja, Bloomberg reported on May 30. 1
This move follows a critical report by Bain & Co., a consulting firm, that cast doubt on the effectiveness of the airline’s new marketing strategy.
Raja, a 20-year veteran at American Airlines, had recently overseen a shift in the company’s sales approach. This strategy reportedly aimed to steer customers away from booking flights through traditional travel agencies and towards direct bookings on the airline’s website or app. However, according to a person familiar with the matter, the Bain report revealed concerns from corporate travel advisors regarding this shift. These concerns likely stemmed from potential difficulties for companies managing their travel arrangements under the new system.
The report’s findings, presented to CEO Robert Isom just days before Raja’s dismissal, painted a concerning picture. The airline’s new strategy was believed to have contributed to lagging revenue in recent quarters. This revelation coincided with American Airlines revising its profit outlook downwards for the year. The news sent the company’s stock price plummeting by 14% the following day, highlighting investor anxieties.
Raja’s departure marks the first major crisis encountered by Isom since taking the helm at American Airlines in early 2022.
The incident casts a shadow on his plans to boost revenue and represents a critical juncture for the airline.
It remains to be seen whether American Airlines will revert to its previous sales strategies or embark on a course correction to address the concerns raised by corporate clients.
- American Airlines: https://www.bloomberg.com/news/articles/2024-05-29/american-air-fired-commercial-chief-after-critical-bain-report[↩]
