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Cargo

Living the American dream

It has been in bankruptcy proceedings, is merging with another carrier, and is on its third head of cargo in less than two years. Yet, despite this, volumes are growing, the integration has so far been smooth, and American Airlines Cargo’s cherished customers are happy. Alexandra Lennane asks new president Jim Butler if it’s time to lead the carrier into more innovative territory
 

It was just 18 months ago that Airline Cargo Management interviewed the new kid on the block in freight, Kenji Hashimoto, successor to the much-admired David Brooks, as president of American Airlines Cargo. Even then, it was clear that this was not a man who would be hanging around the bellies of the world’s largest passenger carrier for long. Perhaps it was a personality thing – heads of cargo are usually of a different type. Maybe they are more relaxed. Maybe they are less concerned with career progression and more interested in logistics. Either way, nice as he was, Hashimoto, now head of regional carriers for AA, seemed destined for the passenger world. “Keeping the seat warm,” is how Des Vertannes, outgoing global head of cargo for IATA, describes the trend.

 

But Jim Butler, the latest to take on AA Cargo’s top job, appears to be a different kettle of fish. His first ‘public’ appearance, at the World Cargo Symposium in Los Angeles in March, revealed him to be approachable, interested, enthusiastic and ready to warmly embrace his new industry, jumping in with both feet.

 

Regardless of whether Hashimoto was a cargo man or not, he has clearly bequeathed Butler a division, which is at the top of its game. When Airline Cargo Management’s interview with Butler revealed no cracks, we cast the net a little wider. But customers, colleagues and even competitors have only got praise for this belly-only airline; which is surprising, not least because it is undergoing significant structural change, first through its Chapter 11 bankruptcy proceeding, filed in November 2011 and exited in December, but also through its integration with US Airways – a process that has taken many twists and turns since it was first announced on Valentine’s Day, 2013.

 

“I think the AA sales staff has made a special effort to avoid displaying signs of being overly internally focused during the course of the merger activities,” acknowledges Richard Zablocki, vice president air products for CEVA Logistics. “They remained visible and dedicated to their customer activities. Their operations never faltered – but of course they haven’t made many changes as yet in that area. Surprisingly, I believe that US Airways has been equally as good in minimising the effects of the merger so far. Of the three major US mergers, I would say these guys are handling it the best.”

 

What AA Cargo’s customers say is significant because, ever since the Brooks era, the carrier has emphasised customer relations far more than most airlines do. And this focus isn’t changing under Butler.

 

“I think what is very positive in cargo is the strength of the relationships with our customers,” Butler says. “We are very pleased with the open relationship that we have with them and I am pleased with our day-to-day relations. It’s one of our best assets and creates a healthy business for us.”

 

As a result, AA has been very careful to minimise the impact of, and even the noise surrounding, the merger.

 

“What you are hearing – or not hearing – is by design,” admits Butler. “We have a plan laid out to have the least customer impact, and that’s on track. We are holding back on giving specific dates so there is some flexibility. We are keenly focused on making sure that customers don’t have a negative experience, so we need some flexibility in case of hitches.

 

“The good news is that the challenges that have popped up so far have been minor and didn’t impact our customers. They haven’t seen anything different,” he says.

 

AA and US Airways should have a single air waybill by the end of this year. JFK and Phoenix have already been co-located and there are six more major hubs to go.

 

As anyone who has been involved in a merger will know, it can be a long, drawn out and complex process. Tony Randgaard, formerly of Northwest Airlines and later marketing manager for Continental/United Cargo, before retiring in April, knows the potential pitfalls of mergers well. >>


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