Bad Move By American Airlines

American Airlines has named a new CEO in the wake of Donald Carty's resignation. The new CEO Gerard Arpey has one trait that is really scary - and it's the one that American chose to highlight at the end of their press release.

Gerard Arpey is a pilot.

Pilots, for whatever reason, make terrible airline CEOs. There have only been a few, but three in particular: Eddie Rickenbacker, Frank Borman and Ed Acker really stand out.

Rickenbacker was the most successful of the three men. He was the only one that didn't bankrupt his airline (but the he was the only one to operate under the CAB and the regulated industry). For all his shortcomings, Rickenbacker did understand basic airline economics "put bums in seats." Some of those bums took exception and created clubs like WHEAL (We Hate Eastern AirLines), but overall Rickenbacker was fairly successful as a CEO.

Frank Borman, also an Eastern Airlines CEO, was nowhere near as lucky. He presided over all but the final shutdown of the airline, partially caused by the mechanics distrust of a former pilot. Borman had a decent relationship with the pilots, but the other unions basically hated him. That distrust lead to the mechanics not being willing to believe anything Borman said. Eventually that forced Borman to sell the airline to Texas Air and Frank Lorenzo.

Ed Acker was another great failure as a pilot CEO. He ran at one time or another Pan Am, United Airlines and Braniff Airlines and did nothing to help the labor situations at any of those airlines. He cultivated the pilots while alienating the other labor groups. Eventually, all three of those airlines had to use Chapter 11 (or 7) to attempt to recover from the messes that Acker left behind.

The stories of all three men are much more complicated than what little bit I mentioned here, but the fact stands. As pilot CEOs they were terrible with labor relations.

American is changing CEOs because of labor problems. And the new CEO is a pilot. Doesn't seem like the best idea in the world if we are to learn from history.

If history is to be our guide, American has just ensured their eventual trip through Chapter 11.