DALLAS — American Airlines (AA) today announced that Vasu Raja, Executive Vice President and Chief Commercial Officer, will depart the airline in June. The sudden exit coincides with the announcement from the carrier that it would cut to its financial outlook for the year.
Raja joined AA 20 years ago and has served as its Chief Commercial Officer since April 2022. He has held a variety of roles in Sales, Planning and Revenue Management.
Most recently, Raja held the role of Chief Revenue Officer and Senior Vice President of Network Strategy, where he was responsible for Network and Alliances.
Why the Sudden Exit
Compounded with the failed attempt at establishing the Northeast Alliance with JetBlue (B6) last year, AA remained marginally profitable in Q1 2024, with operating and net margins of 0.6% and -1.8%, respectively. Delta Air Lines (DL) led the pack, posting a modest operating margin of 5.1% and a net margin of 2.3% for the quarter.
United Airlines (UA) obtained an operating margin of just under 1%, though its net margin slipped to -0.4%. UA would have achieved a 2.5% operating margin if not for the impact of the Boeing 737-9 grounding in Q1, which was not a commercial or network strategy blunder.
Skift notes that another reason for the sudden exit of the CCO is that he oversaw AA’s controversial direct selling changes to its ticket distribution channels. "The move resulted in the American Society of Travel Advisors (ASTA) making a formal complaint about the carrier’s distribution processes."
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Early Summer Shuffle
As the summer travel season kicks off, the Fort Worth-based carrier has not ben able to capitalize on long-haul travel to Europe and Asia as its counterparts DL and UA. Perhaps this explains the sudden management shuffle. However, the airline did not state specific reasons for the surprise departure of its CCO.
The airline states that "In addition to his current responsibilities and effective immediately, Stephen Johnson, Vice Chair and Chief Strategy Officer, will assume leadership of the Commercial organization and help lead the search for a new Chief Commercial Officer."
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Exploring Airline History Volume I
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December 2024
