Since taking over 15 months ago, Carty’s tenure has been remarkably star-crossed. Compounding the rough first year is the fact that Carty is following in the steps of the industry’s most revered and feared executive. Carty’s predecessor, Bob Crandall, was a notorious 24/7 command-and-control boss, but he built a winning team. Employees griped to each other, but bragged to outsiders about working for the best in the business. Carty, 53, took over in May 1998. A Canadian with a Harvard MBA, he had been at American for nearly 20 years, where he presented an affable contrast to Crandall. When Carty got the top job–in part based on his work in the early ’90s to help return the airline to profitability– he said he wanted to introduce a more gentle coaching style: happy employees would lead to happy customers, in turn creating happy shareholders. Admirable goals, but not many people are dancing in the aisles. And the company’s stock has dropped by a third since last summer, partly because higher oil prices are dragging down shares of all carriers.
Carty’s biggest misstep thus far was his decision to buy Reno Air, a small Western carrier, in December. The move infuriated the pilots, leading to their disruptive “sickout’’ in February. By many accounts, Carty should have seen the trouble coming. “Reno Air is the mantlepiece of his first year in office, and it’s not a very good one,’’ said Mike Boyd, an industry consultant. Carty was not available for comment.
Carty isn’t entirely responsible for all the headwind. American’s lousy report card for on-time rankings can be traced in part to disruptions caused by the FAA’s converting to newer air-traffic control systems in key American markets: Dallas-Ft. Worth, Chicago and New York. The weather in Dallas this year has often been better for arks than airplanes.
Still, Carty is working hard to get things on track. He recently unveiled his “Airline Leadership Plan’’ that covers everything from spending $5 billion on new aircraft to a “Multi-Rater Management Appraisal’’ system for grading supervisors on 14 measures, such as making sound decisions. If American doesn’t start fixing its troubles soon, though, Carty may have to start worrying about his own report card.
