American Airlines names Robert Isom to replace retiring CEO Doug Parker

American Airlines named president Robert Isom to replace Doug Parker as chief executive officer early next year, a sign of stability after the COVID-19 pandemic ignited a chaotic period for the industry.

Parker, who has led the airline since 2013, will step down as CEO on March 31 but stay on as chairman of the board, according to a statement Tuesday.

American is the dominant carrier at Philadelphia International Airport.

Isom, 58, has been the heir apparent since he was appointed president in mid-2016, and his selection signals that a steady hand is intended for the airline’s first leadership transition in eight years.

He and Parker have worked together for more than two decades, joining American after engineering the $11 billion merger with US Airways.

As CEO, Isom faces several immediate challenges beyond the pandemic.

American posted a profit of $169 million in the third quarter, thanks to nearly $1 billion in federal pandemic relief that covered most of the airline’s payroll costs. Yet its debt has ballooned to more than $36 billion as it borrowed to get through the worst of the pandemic, the most among major U.S. carriers.

Airline officials say they will be able to pay down debt once business and international travel recover.

American struggled through most of the summer with high numbers of canceled and delayed flights. The disruptions were due in large part to staffing issues after American persuaded thousands of employees to leave last year, only to be caught short when air travel recovered faster than expected from the depths of the pandemic.

American also is facing off with the Justice Department over the carrier’s planned Northeast Alliance with JetBlue Airways.

American, like airlines worldwide, was shaken by pandemic-related lockdowns in 2020 and more recently has struggled with staffing issues and passenger behavior as business picked up.

The airline said in October that it expects costs to continue to pinch profit as revenue remains below pre-pandemic levels.

“We are well-positioned to take full advantage of our industry’s recovery, and now is the right time for a handoff we have planned and prepared for,” Parker said in Tuesday’s statement. “I feel extremely fortunate to hand the reins to this clear and capable leader.”

The CEO transition “likely would have happened sooner” were it not for the coronavirus crisis, Parker said in a letter to employees. “While we still have work to do, the recovery from the pandemic is underway and now is the right time to make the transition.”

American shares closed the day at $17.89, down 0.22%. American opened the year at $15.85.

“American Airlines’ succession announcement appears to be orderly and well-telegraphed,” Stephen Trent, an analyst at Citigroup, said in a note to investors. “With both individuals joining the board, this could help ensure open communication and an alignment of strategic interests.”

Parker, 60, is the longest-serving CEO among major U.S. carriers on an ongoing basis, starting at America West in 2001, then US Airways. He started his airline career at American under Bob Crandall, who led the company in the 1980s and 1990s.

Parker has led consolidation in the industry, starting in 2005, when America West merged with US Airways. He failed in three attempts at major deals before securing the combination that created in 2013 what was at the time the world’s biggest airline.

Based on flights scheduled, seat counts and how many passenger miles it has planned, American regained the rank of the biggest carrier in the world in April, according to airline schedule tracker Diio by Cirium.

Parker is the latest CEO of a major U.S. airline to announce his retirement this year. In June, Southwest Airlines’ Gary Kelly said he would step down, with longtime executive Robert Jordan taking over. Alaska Airlines’ Brad Tilden was succeeded by Ben Minicucci in April.

This article includes information from the Associated Press and the Dallas Morning News.