US Airways Reshuffles Operations Management

[CallawayGolf]

Good day Calloway,

What would the financial impact be to USAirways if one of their pilots kicked the incorrect rudder during an engine failure on takeoff in a fully loaded 321? Give me a best guess estimate. Let's base our pay on that shall we?.

Pilots have an enormous responsibility not following procedures could be costly, deadly and devastating to the airline. No one doubts that. However, while all that is true, pilots aren’t expected to make the same type of decisions that have the same kind of impact to the company, its employees, its customers or the communities in which it operates as does an executive. A pilot following established procedures and protocols makes (or loses) perhaps a few thousand dollars for the company for each flight. By contrast an executive can make multiple decisions in a single day that might have 10s or 100s of millions of dollars worth of direct impact to the company with no procedures, protocols or checklists by which to go by.

There is a big difference and the comparison between the two is apples and oranges to the extreme. I’m not at all diminishing the responsibility and contribution of pilots, FAs, MX, or any other workgroup. I’m simply saying that the executives carry a very different kind of responsibility and can easily sink the company and put all 30K employees on the street if they get it wrong. Should a $50k/year employee be making $1B decisions for the airline as a normal course of his/her job? I say no because the risk is not commensurate with the salary earned. It’s relatively easy to go and get another $50k/year job if you bankrupt the last company you work for. It’s not so easy to go and get another CEO, COO, CFO type job at a Fortune 500 company if you fail as an executive because of poor management decisions.

BTW - how long do you think US would be in business if the average pilot made $1M/year?

 

[BoeingBoy]

Likewise, I doubt the promotion of someone to his staff would be forced on him if he didn’t believe it was a good idea or if he didn't make the final decision himself.

Well, as you say the "final decision" for this level of promotion rests with the BOD. And personally, I don't consider someone going from 3 or more lto 2 evels below Isom to be his staff any more than the pilots or FA's are his staff. The one that really stuck out to me was the OCC/FAA function. Important admittedly, but even including scheduling it's a small group. Does it really need it's own VP to operate when the new VP is doing what seems to be the same as he did as Director or whatever title? Or is the title and commensurate salary/bonus/stock option increase a "pat on the back" for doing the job well?

Maybe US could have a VP of flight numbers 0-250, another for 251-500, etc. Probably need a VP of pushback too...

Jim

 

[CallawayGolf]

Well, as you say the "final decision" for this level of promotion rests with the BOD. And personally, I don't consider someone going from 3 or more lto 2 evels below Isom to be his staff any more than the pilots or FA's are his staff. The one that really stuck out to me was the OCC/FAA function. Important admittedly, but even including scheduling it's a small group. Does it really need it's own VP to operate when the new VP is doing what seems to be the same as he did as Director or whatever title? Or is the title and commensurate salary/bonus/stock option increase a "pat on the back" for doing the job well?

Maybe US could have a VP of flight numbers 0-250, another for 251-500, etc. Probably need a VP of pushback too...

Jim

Isom has a sizable organization and you may be right about the VPs who don't report directly to him. However, I would say it is equally likely that he views all VP and SVP positions as being part of his "staff". He may not meet with them as frequently as his direct reports, but you can bet he knows them and what they do very well.

I'm taking a wild guess here, but I would think that Isom/Management wanted to have a VP residing in PIT given the importance of the OCC. So the promotion of Maloney may have been a way of correcting that. I don't recall if Brad was working FT in PIT or PHX. If it was PHX perhaps the possibilty of him moving to PIT was the reason for his departure.

 

[SparrowHawk]

Isom has a sizable organization and you may be right about the VPs who don't report directly to him. However, I would say it is equally likely that he views all VP and SVP positions as being part of his "staff". He may not meet with them as frequently as his direct reports, but you can bet he knows them and what they do very well.

I'm taking a wild guess here, but I would think that Isom/Management wanted to have a VP residing in PIT given the importance of the OCC. So the promotion of Maloney may have been a way of correcting that. I don't recall if Brad was working FT in PIT or PHX. If it was PHX perhaps the possibilty of him moving to PIT was the reason for his departure.

Perhaps it's because Brad actually gave a rat's rear end about customers. I've met Brad on several occassions and his focus was always on the customer.

We've seen it time and again from Parker/Kirby and their open contempt for customers and employees. So pardon my lack of exuberence. Good luck Brad, keep fighting for the customer. This is the beginning of a life free of poop heads like Kirby.

 

[Dog Wonder]

Robert Isom’s operational performance record is impeccable and he should be commended for putting systems, procedures and people in place to run reliable and top performing airline. I find no fault in that.

Ironic that Kerry Hester's first week on the job finds her answering questions in USA Today about a #12 ranking (out of 12) in airline quality, in light of an impeccable operational performance record.

If Operations are impeccable, which of the other VPs are missing the boat?

After reading the 'perception hasn't kept pace with reality' argument I have to ponder. Is perception reality? Reality perception? Truth lies? Dogs cats? Honchos janitors?

 

[john john]

I’ve never used the Res system other than the ETC so I can’t offer an opinion

Your input is insignificant unless you were/are in involved with the process of the POS SHARES/QIK being on the property.
I hope you get call upon and get involved and concerned and give the agents native SHARES

 

[SS255]

Ironic that Kerry Hester's first week on the job finds her answering questions in USA Today about a #12 ranking (out of 12) in airline quality, in light of an impeccable operational performance record.

If Operations are impeccable, which of the other VPs are missing the boat?

After reading the 'perception hasn't kept pace with reality' argument I have to ponder. Is perception reality? Reality perception? Truth lies? Dogs cats? Honchos janitors?

Kudos to US on their operational performance. It is well deserved. But US has a history of making decisions based upon the findings of the number crunchers, not on what customers really want.

2 cases in point:

1) Ripping out the overhead IFE systems and not replacing them with something more lightweight was a horrible decision. Do you know what the first thing people say to me when they fly US transcon and I ask them how their flight was? "They didn't show any movies." Yes, IFE systems add weight, and yes, content costs money.......but IFE is a customer expectation which cannot be ignored. US is the only major carrier which does not have any IFE on domestic and Caribbean routes. That is a huge strike against them, considering they also charge for bag, (and their only other major domestic competitor which does not have IFE does not charge for the first 2 bags).

2) Installing wifi (on one aircraft type, leading to customer confusion), and not installing 110V power ports or re-activating the existing Empower ports makes no sense whatsoever. No wonder the usage is below their expectations. There is no way I would ever allow my company to pay $13 for inflight wifi when my battery life is 90 minutes tops. I'm sure I am not alone in my thinking.

There is a cost to doing business. I would highly recommend that US direct a portion of some of their profits this quarter (before the economy tanks again, which I'm almost certain it will) to what I call the "passenger experience." The investment might actually pay off. Just a suggestion from a customer who does not just buy the cheapest ticket. 😉

 

[ebwgs]

Kudos to US on their operational performance. It is well deserved. But US has a history of making decisions based upon the findings of the number crunchers, not on what customers really want.

2 cases in point:

1) Ripping out the overhead IFE systems and not replacing them with something more lightweight was a horrible decision. Do you know what the first thing people say to me when they fly US transcon and I ask them how their flight was? "They didn't show any movies." Yes, IFE systems add weight, and yes, content costs money.......but IFE is a customer expectation which cannot be ignored. US is the only major carrier which does not have any IFE on domestic and Caribbean routes. That is a huge strike against them, considering they also charge for bag, (and their only other major domestic competitor which does not have IFE does not charge for the first 2 bags).

2) Installing wifi (on one aircraft type, leading to customer confusion), and not installing 110V power ports or re-activating the existing Empower ports makes no sense whatsoever. No wonder the usage is below their expectations. There is no way I would ever allow my company to pay $13 for inflight wifi when my battery life is 90 minutes tops. I'm sure I am not alone in my thinking.

There is a cost to doing business. I would highly recommend that US direct a portion of some of their profits this quarter (before the economy tanks again, which I'm almost certain it will) to what I call the "passenger experience." The investment might actually pay off. Just a suggestion from a customer who does not just buy the cheapest ticket. 😉

I have to agree 100% with this post.

 

[SpinDoc]

Robert Isom’s operational performance record is impeccable and he should be commended for putting systems, procedures and people in place to run reliable and top performing airline. If he wants to shuffle his executive team to further refine and improve the airline’s operational performance stats, he of all people should be given the benefit of the doubt that his decisions are sound. One day of operational mismanagement would likely cost more than the combined annual salaries of all the executives on his team. As such, executive pay should be aligned with the level of responsibility and financial impact he/she brings to the organization – the more responsibility and more money at risk from good/bad decisions a person has should equate to more compensation. I find no fault in that.

Amen brother. Robert Isom was brought onboard specifically to shore up operations, and he has proved his ability to organize and direct the entire company to exceed the goals that were set forth. He is truly a class act and is an excellent, down to earth motivator who knows how to work with people. As such, he should have the ability to pick and choose his team to maximize planning and keep US Airways on top in operational performance. Sadly, people of his caliber don't stay around long because sooner or later, he will realize that his value is much higher on the open market because Dougie and his crew will stymie his professional and financial growth.