Partying hard at the wake for American Airlines, celebrating death of honest business, forcing job losses and dancing to bankruptcy tunes will be insolvency master Doug Parker and Tom Horton, skilled at playing the system to huge personal financial gain.
The latter, caretaker CEO of American Airlines now merged with US Air, has made out like a bandit. He is supposedly going to be rewarded a paltry severance of $17 million; considering he had demanded $20 million. That would come to about $10 million for each of the two years he was CEO, for which he was already paid several million dollars in salary any way.
His only task, or goal, was to fly the company into the ground. To make the deal work almost all employee groups, pilots, baggage and ground workers and flight attendants have been offered raises and shares, and all seem quite happy. This makes it look like a win-win deal, at least for now. But corporate leaders have a habit of going back on their word.
So, for now, who will be the loser ? Purchase a ticket in a few months and you will know who.
Apparently one of the biggest losers in this game of greed will be the Pittsburgh
airport, where 700 people could lose their jobs due to US Air’s planned pullout. Actual job losses will most certainly be much higher because of the negative multiplier effect for abandoning an airport which not long ago was reconfigured to the airline’s needs at great cost to taxpayers; changes that made it more difficult for other carriers to use. But if anyone can walk away from it, Doug Parker (5 year compensation $21.4 million at US Air) can. Now the region is stuck with a billion dollar dead asset like Montreal’s (Canada-Quebec) ill conceived Mirabel airport.
If Allegheny County can’t sue the merged American then they should get out of the County business altogether; perhaps start an albatross airline like AA and drive it into insolvency. If it works for others it might work for them too.
So, how is the job market for an executive whose resume shows he drove his company into the ground? It might surprisingly be pretty good. That should not come as a surprise to anyone.