American's two largest domestic competitors have steadily gone ahead and gone a little further over the years and the gap just keeps widening. Delta is in a strong position and United has been closing the gap strongly you have to think that they've been getting their hands in more and more often on the money on Delta. In the middle sits an airline that has been buffeted by more basic problems than any one operational challenge has been, a lack of a consistent strategic direction.

But in the airline industry world, it's been rumored that the next chapter at American might be the same face. Aviation journalist Brian Sumers reported that at IATA's Annual General Meeting in Rio de Janeiro, where the real decisions are usually made in hallways and hotel bars, the top contender among the industry executives to replace Isom with the job is former American CEO Doug Parker.

It is uncertain if that rumour will turn into reality. It is important to consider, however, both why this concept is becoming popular and why it may not be an adequate solution to the problem it's hoped to solve.

How the question of American's leadership is continually being asked

The financial performance of American has been lagging behind Delta and United for years, and the fact that the problem is a lack of strategy, and has been for years, has become an industry joke. Premium travel has been a fleeting aspect of the airline's strategy over the last few years, with a shift from investing in it, to retrenching from it, only to invest in it again without ever coming up with a clear, long-term positioning. This type of whiplash is bad for employees to share a mission and bad for customers to know what American is trying to be.

The leadership issue has been in the back of the board's mind for some time and industry watchers are wondering if American's board has been too late to act. Part of the problem is structural: The same board members who decided to replace Kirby with Isom with the CEO position, years ago, have the same problem in mind today. It's not that a board would readily concede that it made the wrong move, but there may be some part of that that's why they don't seem to be willing to make a change even as performance differences grow larger.

So, what is the Doug Parker Rumor all about?

Parker's name is a household name in the industry. He's currently one of the longest tenured CEOs in commercial aviation, having served as CEO of America West, then US Airways following its merger with American and now American. At 64, he's a little younger than Delta's chief executive, Ed Bastian, and still stays in the industry via his role on a Qantas board.

This case industry executives make for Parker is one of experience and credibility: a steady hand who could garner respect from the rest of the airline industry and, in theory, offer the stability that American's board is seemingly looking for. From a governance point of view, it is a very natural instinct to replace someone whose expertise they know, trust and have used before with some new face that they haven't yet met.

Why Parker May Not Be the Savior of Anything

If one isn't more so than the other, Parker and Isom are effectively parallel strategic leaders. Both are well-respected as individuals fair, personable and respected among industry peers. Especially in a field where labor relations often go sour, Parker has a real knack for labor relations, and it's no surprise. He was also a strong and persuasive presence in the bleakest of the pandemic times, working to ensure that America and its peers continued to function, through federal aid.

But being liked and crisis management is not the same expertise as building and executing a coherent, long-term strategic vision which is where both the Parker and Isom tenure have been the same. 

What American Actually Needs

The most lacking attribute in American's leadership equation is not industry experience or relationship capital it's the capacity to describe a vision that has the power to truly inspire employees who have been confused and demoralized by years and years of strategic flipping. If that sort of galvanizing leadership isn't present, then no operational changes will turn things around.

There's also a good case for picking the next leader from outside the company altogether. A promotion from within, at least a promotion to the executive positions from the America West leadership network that has long dominated American's executive ranks, is a signal of continuity not change even if the quality of the candidate is high. 

The Outsider Alternative

If American really wanted to make a massive move, it would be a very different message if it did it by hiring a proven outsider to spearhead change in another airline company in the business world around the world. The leader who's managed to build and implement a coherent strategy not one who's just been tinkering around the edges at a major international carrier is the kind that brings real change to a workforce that's grown weary of the familiar.

That much could come as a surprise for American's board, and that's another story altogether, but it seems like a risk they have taken in the past and they would be wise to be skeptical. As an airline, it has a strong culture of 'promoters from within' which is advantageous in the sense that they have institutional knowledge, but it has also arguably been responsible for the 'group think' that has been the hallmark of the current strategic drift.

The following is a summary of the Key Points

• IATA executives at its AGM are rumored to be mulling over replacing Robert Isom with Doug Parker as American's CEO.
• Parker has been the leader of American, US Airways and Parker's old boss, America West, and is a member of Qantas's board.
• Parker and Isom have both a leadership style that is well-liked but short of being the strategic visionary that the country needs.
• The board of American had already selected Isom over United Airlines executive Scott Kirby, who had been the leader of the resurgent United.
• To really turn things around, you need an outsider CEO who can inspire the demoralised workforce to join a cause with a clear vision.

The Bottom Line

There's real, growing pressure on the board of American Airlines to make a move as pressure grows on the company to finally solve a problem that has long plagued it compared to Delta and United: under-performance. Of course, replacing one popular, wily chief executive with another who's equally afflicted with the same basic problems is not a plan for a turn around it's a lateral move in business garb.

What American really needs is a leader who can create real internal momentum and get people on board with a clear, consistent vision who will not come from the company's internal leadership pipeline. But more important is whether the board wants to take the leap, instead of going for the familiar and comfortable name, and that doesn't seem to be the case right now.