July 25, 2005 |
Posted By Diane Pfadenhauer |
American Airline's Employee Focused Turnaround
An article in today's Christian Science Monitor discusses the fact that American Airlines recently posted a profit for the first time in 5 years, despite ever-increasing fuel prices which are adversely affecting airline profits. The article attributes the airlines success to ruthlessly seeking ways to cut costs. While this sounds great and many airlines are doing the same thing, their success is further attributed to engaging employees in the effort to reduce costs. For example,
- Rather than close maintenance facilities and outsource aircraft maintenance like other airlines, American is expanding it's facility in Tulsa and engaging employees in a goal to save $500 million at the facility.
- American's pilots were the ones who suggested that the planes could taxi with one engine, instead of two, saving fuel costs.
- And the list goes on.
Compare this to cost reducing strategies of some of the other major carriers:
- While United Airlines is scrapping its pensions, the unions consider a strike.
- Delta airlines, with similar financial difficulties, joined the fray of several international carriers by spending a ton of money on new uniforms. The Marketing to Women Blog points out the obvious: how great employees will look in their uniforms while they contemplate whether there will be a pension plan when they retire....
It appears that American is making strides by transforming its culture under new leadership, engaging and empowering employees, and beginning to turn the company around.