Integrity When Times Get Tough
- Friday, October 28, 2011
I frequently fly on the American Airlines to present the ReTooled ReFueled Essential Christian Life-Skills Seminar at churches, businesses, and other venues all over the country. Being a road warrior has allowed me to witness a lot of things that most casual fliers never see. 2008 was a lousy year for the economy. Particularly hard hit was the U.S. airline industry. It had been seven years since the vicious attacks on the World Trade Center in New York and the Pentagon in Washington D.C. However, the airline business had still not fully recovered from loses it had suffered for the next couple of years as many Americans were simply afraid to fly.
During that period, the industry lost billions of dollars. Compounding matters was the fact that, by 2008, oil prices had shot through the roof. While we were paying over $4.00 per gallon for gasoline, the cost of crude tipped $160 a barrel. Suddenly the airlines were taking it on the chin again. While possible to operate profitably with crude at $85, maybe even $100, a barrel, these new, never-seen-before prices were mind jarring.
Like the other airlines, AMR (the parent company of American Airlines) for years had fought one dragon after another. Then to add insult to injury, a terribly unfair ruling by the Federal Aviation Administration dealt another costly blow to this company in 2008.
In what I believe to be one of the most outrageous decisions a government bureaucracy has ever made, the FAA grounded nearly half of American’s fleet because of a minor wiring issue that had nothing to do with passenger safety, according to a number of industry observers.
During those horrible days the company lost millions of dollars— all at the very moment that fuel prices were skyrocketing. Passengers, not knowing the facts, blamed the airline. All over the country gate agents and flight employees stoically smiled and apologized to inconvenienced passengers for something that was not their fault—and was costing them dearly.
Over the years all five of the other major legacy carriers have filed bankruptcy in one form or another. But American has steadfastly refused to follow the trend. Instead, they watched as other companies sometimes walked away from financial obligations to venders and employees—essentially shrugging their collective shoulders and saying, “Too bad.”
Why didn’t American Airlines do what their competitors had done? There were all sorts of ways to rationalize a bankruptcy. And imagine how tough it was to watch some of their competitors emerge from bankruptcy (no longer legally liable for their original commitments) now able to offer their customers perks that American was hard pressed to match.
Another important note: Through these tough days American has never stopped paying
into its employees’ pension fund either. So again I ask, why didn’t American just follow the trend?
I have it on a good source that, while it was discussed in top level meetings at the company’s Dallas headquarters, there were a number of executives who simply had a moral problem with the entire notion. In a personal conversation with one of the company’s high-level managers, I learned how the airline’s executive suite has struggled to take the moral highroad even when they could have saved money by cutting corners. Yet through it all, AMR has elected to do the right thing. Under the leadership of Gerard Arpey, the company has fought staggering headwinds. Not all the employees have agreed with his decisions, but over the years he has built a culture of openness and honesty.
As an honest broker, Arpey and his team have slain dragons to maintain a solid coalition of customers, shareholders, and employees.
As individuals, we can learn a lot from the corporate world. Moral corporate cultures are not the product of random, do-whatever-it-takes business models. Morality in a business is the product of morality in the executive suite. In turn, that moral compass is reflected down line. Sound old fashioned? Maybe. But that is the way AMR sees things.
Recently on Career
Have something to say about this article? Leave your comment via Facebook below!
Listen to Your Favorite Pastors
Add Crosswalk.com content to your siteBrowse available content