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Crandall exits cockpit
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April 15, 1998: 11:52 a.m. ET
American's maverick CEO will retire in May after 25 years with company
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NEW YORK (CNNfn) - AMR Corp., the parent of American Airlines, announced Wednesday that its long-time maverick captain, Robert Crandall, will retire on May 20, closing out a quarter century tenure that reshaped the airline industry from the boardroom to the bulkheads.
Charles Fisher III, AMR's longest serving board member said the decision by its 62-year-old chairman and chief executive officer to step down, announced after the board's regular April meeting Wednesday, had been discussed for some time and was "not entirely unexpected."
The company named Donald Carty, 51, the current president of American Airlines, to succeed Crandall. AMR also said it expected Carty to succeed Crandall as chairman of Sabre Group Holdings, an airline reservations systems operator in which AMR owns an 82 percent stake.
Crandall's announcement coincided with a banner earnings report from AMR, which said first-quarter profits had soared by 91 percent.
Net income rose to $290 million, or $3.24 a diluted share, from $152 million, or $1.65 a share in the year-ago period. The latest earnings handily beat Wall Street consensus estimates of $2.54 a share.
The airline attributed the growth to "sensible pricing" and favorable fuel prices.
The company also said it planned a 2-for-1 stock split.
Whatever changes may ensue from Crandall's departure, the succession is expected to lay the groundwork for a smoother style of leadership.
Among Crandall's more notable achievements, he is credited with devising frequent-flyer programs, so-called "Super Saver" fares, and the yield management pricing system, the now ubiquitous practice of selling seats on a single plane at varying prices to extract a premium from high-paying business travelers.
In a statement, Fisher extolled Crandall as "a great industry innovator" and said he leaves AMR "strong and well-positioned for the future."
"Moreover," Fisher added, "we share his enthusiasm for the capabilities of Don Carty and the AMR management team and we are confident the transition ahead will be a smooth one."
In inheriting the nation's number-two airline, Carty will also assume command of a time-tested juggernaut that weathered the turbulence of deregulation and labor unrest to emerge in its present form.
Carty is responsible as well for some of American's recent efforts at alliance-forging. Those include a transatlantic partnership with British Airways and secret partnership talks reportedly underway with US Airways.
Crandall started at American in 1973, rising to president in 1983. He has held his current titles since 1995. Today, American is cruising along in its fourth-straight year of record passenger traffic and profits.
Carty served as senior vice president and controller of American Airlines before he left in 1985 to become president and chief executive officer of Canada's CP Air. He returned to American in 1987.
Over the past year, shares of AMR Corp. (AMR) have catapulted more than 80 percent. AMR stock was trading up 4-3/4 Wednesday at 152 in composite trading on the New York Stock Exchange.
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American Airlines
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