Asked what made him most proud during the past 18 months, as the airline industry endured the lingering pandemic, American Airlines CEO Derek Kerr responded forcefully, “I’m most proud of saving the jobs.”
“I’ve been doing this for 30 years; this is something we’ve never seen,” Kerr said Thursday, referring to the pandemic. “We saved a bunch of jobs: that was key for us.”
Kerr credited the CARES Act and the unprecedented joint effort by the airline industry and its labor unions, working together to influence legislators, for the achievement. On the management side, he noted, American CEO Doug Parker was most engaged in enabling the coalition with labor.
Kerr cited “incredible work between the labor teams, Doug, A4A (industry lobbyists), working with government to show how important this industry was, to keep the airline running, and to keep the jobs here.
.“We couldn’t have done it without the labor unions. Without their help in DC, we would never be where we are today.” Kerr said.
“I’m really proud of what Doug did,” he said
Kerr, spoke at the Cowen transportation investor conference in Boston. His career in airline finance began in 1991 at Northwest Airlines: subsequently he was CFO for America West, US Airways and American, while Parker was CEO at all three. Kerr was questioned by veteran airline analyst Helane Becker.
During the pandemic, Congress provided $39 billion to pay the salaries of tens of thousands of employees at passenger airlines. For airline labor, the programs known as PSP (for payroll support programs) represented a historic achievement. Unions helped write the legislation and then advocated for it, working with management, particularly Parker,. His engagement has been acknowledged by Sara Nelson, president of the Association of Flight Attendants, and the most visible labor leader during the legislative battle.
Still, Kerr’s insight came at a delicate moment for labor relations on American, because this week, the Allied Pilots Association, which represents 14,000 American pilots, announced it is planning airport demonstrations focused on the carrier’s occasional summer operations breakdowns. Philadelphia pilots even called for management resignations.
At the conference, Becker asked Kerr if he was surprised by the pilots’ announcement, “given how well Doug seemed to work with everybody last year.”
Kerr responded, “We’ve been working very well, working hand in hand with (labor unions). Doug’s done an incredible job making sure that was a focus for the company.
“We have had some issues as we’ve grown the airline back,” Kerr said “Some of that has affected our employees.” Specifically addressing the planned pilot demonstrations, he said, “That’s their prerogative as a union.
“During the summer we did have some issues with growing the airline back, some weather issues,” Kerr said. “No one’s ever gone from a 50% airline to an 80% airline in eight weeks – we could have done it better.”
APA spokesman Dennis Tajer said Friday, “We’re grateful for the collaborative effort to secure the government investment to save jobs and our airline, but that also obligated management to make sure they were ready for the recovery and they weren’t.
“We were ready and our passengers were ready, but management wasn’t,” Tajer said. “Our CFO said management is working well with unions, but if they were working well with the pilots, we wouldn’t be picketing for their attention to repair our airline’s operation.”