David Sunde, a co-founder1 and the CEO of the bus company Landline, is an airline network nerd at heart. When he started the company in 2018, he had a simple thesis that he formed after leaving his job as a planning director at Surf Air: as regional airlines retired 50-seat jets, the Big Four2 would want to replace airplanes with buses on the shortest routes, allowing them to retain much of their hub feed at considerably lower cost.

I’d say he was half right. As CRJ200s and ERJ 145s have disappeared, smaller communities have lost service. But, with a few exceptions, airlines balked at the bus-as-an-airline thing — even though at some facilities, Landline passengers clear TSA screening before the bus leaves for the hub airport, allowing it to pull into an airside gate, much like a plane would. Unfortunately, Sunde’s radical idea — that a bus could operate like United Express or American Eagle (under contracts with similar terms) — hasn’t gotten much traction. In the United States, only American sells bus journeys as if they were flights.

Now, Landline is changing its target market. While Sunde will take more capacity-purchase deals with airlines, Landline is increasingly selling seats directly to consumers on what’s perhaps the most the convenient airport shuttle ever created. Rather than pairing the journey with the airline fare, passengers purchase a standalone bus ticket to the hub, where they transfer to a flight operated by one of several airlines.

This week, Landline announced its most ambitious move so far. On Nov. 17, it will launch service at Sonoma’s airport with eight daily trips to and from SFO. The model is similar to Landline’s operation to and from Boston Logan, though in Massachusetts, buses depart and arrive in Framingham, about 25 miles away from Logan.3

In Sonoma, customers can arrive at STS 15 minutes before the bus departs to SFO. They check in at STS, drop checked luggage (bags are stored securely in the bus luggage compartment), and clear security.4

The bus, which has Starlink, deposits them airside at SFO about two hours later. As passengers walk to their gates, Landline will deliver their bags to one of four airlines — United, American, JetBlue, and Alaska/Hawaiian — all for just $55 each way.5 Kids 15 and under are free.

“You tell us what Alaska flight you’re on,” Sunde said. “We tell you which Landline fits your needs the best with the tightest connection. You book your ticket, and then when you show up, we have a common use system. We print your bag tags for you, take your bags, we pass them to Alaska in the hub, and you’re on your way.”

Did something go wrong?

Long-time readers may remember that I did an unpaid-for-credit project for Landline while I was in business school in 2022. I signed an NDA, but Sunde said publicly then what he wanted Landline to be: a quasi-regional jet replacement.

It made so much sense. Airlines still operate many very short flights to preserve hub connectivity, like Chicago-to-South Bend, Chicago-to-Milwaukee, and Los Angeles-to-Palm Springs. A bus can handle these routes in 2.5 hours or less, at a tiny fraction of the cost. If that bus arrived and departed airside, allowing passengers to skip the more time-consuming aspects of air travel, few people would be materially inconvenienced. And if the Landline bus could depart from a population center (say, downtown versus the airport) passengers might even prefer it.

Just as Sunde predicted, regional airlines retired many 50-seat jets, leaving some smaller markets with less service. Unfortunately, at the same time, nearly every U.S. airline promised Wall Street that it now had a premium product (even in economy) for premium-hungry passengers.

That second trend made things difficult for Landline. Buses don’t rank very high in the U.S. transportation pecking order. If you’re an airline executive charged with building a premium product, you might not take a chance with a bus company just because it’s cheaper than Skywest, since it wouldn’t mesh with your bosses’ premium vision.

When I asked how the premium trend affected business, Sunde told me that he considers Landline a premium product, and for a bus, he’s right. With 1-by-2 leather seats and fast WiFi, a Landline bus is not a Greyhound bus.

But airlines didn’t bite as he hoped. Landline has had few airline deals over the past seven years, with United (no longer a customer), Air Canada, Sun Country, and American. Yet among them, American is the only carrier to fully buy into the bus-replaces-plane shtick, with airside service and all. It has offered that in several markets, including Wilmington, Atlantic City, and South Bend.

While I don’t know about the P&L of American’s Landline experience, I can tell you (at least from the outside) that it probably wasn’t the greatest idea for the carrier, assuming American really wants to be a global premium airline.

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Brian Znotins, who led American's network planning team for the past seven years, lost his job this week, sources told The Airline Observer. Nick Andersen, American’s vice president of commercial planning and performance, replaces him.

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I enjoyed Alaska's product showcase last week in Seattle at its investor day, during which the airline showed off new premium seats, renderings of future lounges, and detailed plans for a four-class Boeing 737 Max to fly between the West Coast and New York.

Of course, I wonder if Alaska only spent a fortune on those cabin mockups (which by now you’ve seen all over social media and on blogs) to sway our attention from its mediocre near-term financial outlook.1

Now that I’ve made that dig, I’ll remind you this is not a newsletter for investors. When I attend events for investors, what I’m looking for is the next micro-trend, even if it's not as sexy — nor as lucrative — as premium products. I love that Alaska is adding flatbeds to a bunch more airplanes, but that’s not a new trend; it’s the airline following a very established path.

Today, I will share with you a new micro-trend. Well, scratch that: it’s not new. In another installment of what’s old is new again, Alaska again is excited about the debit card business.

Weird, right? More than a decade after Bank of America canceled its Alaska co-brand debit card blaming crummy economics, Alaska will return to the business next year when it launches a new card managed by a different partner. According to Brett Catlin, Alaska’s senior vice president of network, loyalty, & partnerships, this new deal should be very profitable.

“For the next five years or so, when we hit run rate, we see this as being a nine-figure opportunity,” he told me in an interview.

Wait, what? Aren’t debit cards bad business?

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Earlier this month I criticized Southwest for its lounge plans, arguing that it erred by making them more luxurious than the egalitarian brand that the airline has cultivated for decades. I wonder if CFO Tom Doxey read my story, because he spoke last week about why he’s not concerned about the potential mismatch, telling investors that Southwest hasn’t lost its connection with its history as it has changed its model.

“We’ve done [it while] maintaining the things that have been core to Southwest for 50-plus years now around hospitality and the culture and the customer centricity,” he said.

So far, he’s probably right. I don’t know that assigned seats and an extra-legroom section put Southwest’s brand equity in peril. Lounges are a different story, and I’ll be watching closely to see how customers that don’t have access handle them.

But that brand stuff isn’t Doxey’s problem. He’s the money man,1 an executive who leads the team that calculates NPV. As he explained last week at Morgan Stanley’s Laguna Conference, the economic reasons behind lounges make them a slam dunk — a rare airline decision that pretty much cannot fail, so long as access is paired with a premium credit card. Alaska, United, American, Delta and even JetBlue have proven the model. Mostly, Southwest is just copying them.

“We’re not going to do things unless we feel that they would be accretive to the business,” Doxey said.

As it moves upmarket, Southwest had other products it could have introduced, including first class, but nothing else is as much of an economic no-brainer as lounges, especially because the airline isn’t taking on that much risk.

As recently as 15 years ago, Southwest probably would have had to build lounges on its own, at great expense, and then try to sell memberships to road warriors — the model most airlines used for decades.

Now it has a very skilled partner. Chase helps design and build the lounges, and issues the premium credit card that customers will need to access them. So far, Southwest has said passengers only will get in if they have that card.

“We haven’t built lounges before, but they have, and they do a great job with it,” Doxey said. “There’s this great synergistic partnership.”2

Southwest plans to open its first four lounges next year — in Austin, Baltimore, Honolulu, and Nashville. It plans to open three more soon after, and Doxey said the locations should not surprise industry insiders. “It’s going to appear very logical as we continue to announce more and more of these locations,” he said.

Next, Southwest might try more products. “We’re not done — we’ve just announced lounges and there’s more to come,” Doxey said, sounding a lot like his boss, who loves to tease analysts about enhancements that may or may not be coming. But if lounges are as successful as management hopes, I bet we’ll see Southwest try other premium products.

How much money will these lounges make?

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Today’s post is sponsored by:

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Dear readers,

No long-time subscribers should have been surprised last month when Qantas said it will begin retiring its 10 remaining Airbus A380s in 2028, about four years ahead of schedule. Besides Emirates, few airlines like it much anymore — even if they rarely say so publicly, lest they draw the ire of the traveling public.

Cam Wallace, CEO of Qantas International and Freight, telegraphed this move two years ago when he conveyed his (at best) lukewarm feelings for the aircraft in this newsletter. “Our customers really enjoy flying on the aircraft,” he told me.

Wallace is a loyal subscriber to this business-focused publication, and he knows my readers would be far more impressed with tidbits about the airplane’s commercial success. When the nicest thing he had to say about the plane was ‘people like it,’ I suspected something was amiss.

Competitors know this too. A commercial executive at another airline told me a couple of weeks ago after Qantas’ announcement: “It’s loved by customers, but it’s not loved by anyone who has P&L responsibility.”

Like most of you, I’m an aviation romantic, and I saw great promise two decades ago in the A380. But that time is gone for all but one airline. As someone who likes to see airlines make money, I say good riddance to the superjumbo. It is easy to blame high fuel prices for the quicker retirement schedule, but to his credit, Wallace didn’t hide behind that fig leaf. “It’s not the primary reason,” he told me.

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I’m back to writing about brand today, an often-overlooked portion of the airline experience.

To be successful, airlines must differentiate themselves to attract customers. A few have truly differentiated networks, so that’s their competitive advantage. But most airlines, competing against each other with similar seats and amenities for basically the same customers, have to find and commit to another thing that makes them special.

That is brand, or more specifically, brand promise. Faced with choices, I think consumers will choose not the best airline, but the one that most often delivers the experience they have come to expect.

Successful airlines are self-aware — clear about what they are, and what they are not — and consistent in delivering on their promises. This must happen through the whole travel experience, from booking to check-in to the airplane. And while they can make tweaks to these brand promises, many of the best airlines stick to their overarching strategy through good times and bad.

But this takes clarity, discipline, and commitment. As the industry as a whole has moved up-market in response to post-pandemic customer preferences, there has been this tendency for every airline to start chasing “best-in-class,” or something like it, all under the banner of “premium.” Of course, we all know that budget airlines have their versions of premium products — I’m not saying that premium products have no place on LCCs. But the tone, the spirit, the vibe of premium on any given airline has to be the right fit for that airline.

Take too big a swing on your premium product, create something too aspirational for your base — or worse, strike a weird balance between premium and budget-conscious — and you risk muddying your identity, confusing (and potentially losing) your customers and damaging your brand.

This is a big reason I harp on American. It offers a fine product with the bones to compete with Delta and United1, but I fear its mid-level executives for so long served two masters: a debt-focused CFO, and commercial leaders who know a premium airline has to spend money to make it.

That’s enough about American. I want to discuss two other airlines that have made major product announcements recently. Each is seeking to match premium trends and increase revenues.

One airline designed a product that matches its brand promise — the new offering isn’t the world’s best, but it aligns with customer expectations, and I think that makes it the right move for its target market. The other airline’s new product is more luxurious than the first carrier’s, but I don’t think it matches its brand promise. I think that mismatch makes for a weaker product.

Can you guess the two airlines I’m talking about today?

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Something weird is happening at United Airlines when it comes to how customers interact with the brand online.

United, which is very familiar with being the main character on social media,1 might now be the coolest airline online.

Granted, it’s a low bar. Many premium airlines (Emirates and Singapore among them) take what I consider a hands-of…

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Arguing that Chicago should be a one-airline hub market, Scott Kirby says United someday will operate at least 1,000 departures from O’Hare, making it a fortress hub, akin to what Dallas/Fort Worth is to American and Atlanta is to Delta. And, on Wednesday, he doubled down: he told the audience of Chicago-area business leaders at Crain’s Power Breakfast that even though two airlines laying claim to O’Hare keeps prices lower in some markets, they should want United to win.

Before I get to Kirby’s reasoning, let’s discuss his latest estimate of American’s O’Hare losses. Almost a year after telling me that American likely was losing $800 million per year on a run-rate basis (a number American disputed), Kirby has now upped his estimate.

“In the 12 months into Q1, American lost $1.1 billion in Chicago,” he said Wednesday. “That number is going to be bigger for the full year because that’s before their growth push started and before oil prices went up. You can’t do that in the long run, but you can do it in the short term.”

Kirby used to leave his argument there — perhaps he would say that American will fold in Chicago after its CEO (or perhaps its board) tires of the losses and gives up. But this week, Kirby had more to say to the business community about American’s demise: it will be a good for you.

Here’s his argument. American and United fly to too many of the same tiny markets, duplicating each other’s efforts in a way that does nothing for the local economy. Chicago is the nation’s third largest city, but other airports in smaller cities provide far more destination options for local businesses, because they have only one hub carrier, not two. For United to be more effective in Chicago and offer the same schedule breadth as, say, Delta in Atlanta, American needs to get out of the way.

“Chicago should be bigger, but United needs to be at 1,000 flights a day to make that happen,” he said.

It’s a sound argument, I think. In the short term, the FAA is holding United back after it installed movement caps at the airport. But that’s probably a short-term issue. The bigger impediment is American. As long as American maintains it sizable number of O’Hare gates, United will not be able to reach anything close to 1,000 departures.

It should not surprise you that American pushed back on Kirby’s comments.

“We’ve ​heard our competitor ​make a ​lot of predictions ​about our ​presence in ​Chicago,” the airline said. “But ​the ​reality ​is American is growing, investing, and competing for ​Chicago customers and will ​be for years ​and years ​to ​come. ​Our ​competitor’s vision ​for ​O’Hare appears to ​be ​one airline ​with ​less ​competition. That’s ​not ​going to ​happen.”

The statement makes no mention of how much money American is losing in Chicago. Perhaps it does not matter, assuming American wants to maintain its competitive position at any cost.

If American goes, won’t that be bad for Chicago?

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We've reached August, and like many of you, I'm taking a vacation.1 Before I go, I’ll share some of the more interesting things I have learned recently from earnings reports.

Now that airlines have digested and accepted the reality of higher fuel prices, U.S. carriers are once again discussing more prosaic topics in earnings calls, such as th…

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If Scott Kirby’s mantra is “no excuses, sir,” Robert Isom’s must be “any excuse will do.” But like any experienced teacher, parent, or industry observer I see right through it — and I bet you do, too.

The excuse offered last week — for the airline’s dismal guidance for the third quarter (a loss between 10 and 70 cents per diluted share) and a possible loss on the year,1 depending on fuel prices and demand — was that if only the second quarter earnings call had been held three weeks earlier, they would have had better news to share.

If only!

You could hear variations on this theme at least three times and from at least two executives (presumably with serious faces). CFO Devon May told analysts that as recently as July 2, American would have shared that it could make as much as $1.5 billion in pre-tax profit this year.

And here’s Isom: “If we reported earnings just a few weeks ago, our forecast for the remainder of the year would have been potentially to produce results ... four times better than last year,” Isom said.

As you can probably tell, I don’t think highly of this argument and I can’t see why you would either. I know Isom wants to keep his job, but good CEOs don’t cherry-pick data from the few days when President Trump seemed to tire of the conflict with Iran and Iran loosened its grip on the Strait of Hormuz. Good leaders discuss the situation as it is — not how it was a few weeks ago, or how they hoped it would be.

It’s too bad, because I thought Isom’s crummy excuse overshadowed an otherwise reasonable earnings call effort (at least considering the poor guidance). Isom mostly stuck to his talking points, with fewer cliché-riddled answers than usual. He even shared a four-point plan that he said would close the margin gap between American, United, Delta, and the newly resurgent Southwest. All three competitors reported that they’ll be firmly profitable in the third quarter and for the year.

Was something missing from American’s plan?

Yes. I’ll get to that in a moment. First, the good news.

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Today’s post is sponsored by:

Dear readers,

As I followed United’s second quarter earnings call last week, I think I heard Scott Kirby obliquely share a warning with fellow CEOs: keep prices up, even when fuel prices fall, or you may lose your job — just like Ted Christie, who “stepped down” from Spirit in April 2025 between the airline’s first and second bankruptcies.

Kirby wasn’t that direct, of course. He’s too smart to utter such an inflammatory remark in a public forum. And since only he knows what he meant, I need to be careful as I analyze his words.

But I am a noted Kirby-watcher, and I think I can make the case that Kirby intended to remind competitors what can happen to CEOs who fail to correctly read industry inflection points.

I’ll share what Kirby said, verbatim, and then I’ll discuss what I think it means.

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I don't have much to quibble about from Delta’s second quarter earnings report. Despite very high fuel prices, Delta produced an adjusted operating income of $1.6 billion with an operating margin of 8.8 percent.

Executives promised continued momentum in the third quarter, predicting an operating margin of 11-13 percent, and teased investors with the prospect of even better future results if fuel prices drop and fares remain high. Ed Bastian called sustaining the high fares an “important step towards improving the industry's financial health and earning sustainable returns over time.”

Maybe so, but we won’t know if airlines can keep prices high for some time, because as the old saying goes, you’re only as strong as your weakest competitor.

So today, let’s examine some of the commercial strategies that Delta executives highlighted on their earnings call last Friday, including their future international growth plans, their interest in Los Angeles, and their bullishness on new basic fares for premium cabins.

Oh, and I’ll hit Bastian for some overly patriotic comments.

Growth mostly will come in growing economies. And that’s not the United States.

Even in the best of times, U.S. GDP typically grows in the low single digits per year. Because well-run airlines don't seek to grow capacity faster than GDP in a mature market (unless they have a strategic reason), Delta is looking for other places to put airplanes.

"We think longer term, the domestic market will move with the economy," chief commercial officer Joe Esposito said. "International for us will grow faster than average just because there's a lot of economies that we still don't serve."

One new route will be Atlanta-to-Riyadh, beginning in October. Another should be the long-teased Los Angeles-to-Manila service. There will be others, too.

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When WestJet unveiled its new LOPA last year for some Boeing narrowbodies, I thought the airline made a reasonable decision to shrink legroom in some seats to Wizz Air levels. Even though some passengers would have limited (or perhaps no?) knee room, I considered it a rational solution to an old problem – how to compete with ULCCs that pack seats on airplanes and undercut other carriers on price.

U.S. airlines have had great success with their basic economy products by adding pre-flight restrictions — including limits on flight changes, baggage, and seat selection — while leaving the in-flight experience untouched. All coach passengers receive complimentary drinks and snacks, access to TV and movies, seats with reasonable legroom, and (sometimes) free internet. Why fly Spirit (RIP) if the Big 5 could give them a better experience at the same price?

But WestJet thought that might not be the best approach for its customers.

Last year, as it redesigned the cabins on some previously all-economy aircraft to add premium seats, WestJet decided to slice and dice the coach cabin, effectively ensuring that many basic economy travelers would have a worse onboard experience than others. These airplanes had four versions of coach seats: extra-legroom economy, along with three types of economy class seats, at 30, 29, and 28 inches of pitch (with the tightest room at the back of the aircraft).1

If passengers wanted the old WestJet economy class standard of 30 inches, they’d have to pay extra for it.

“It’s all about segmentation,” WestJet CEO Alexis von Hoensbroech told me last month in an interview in Miami at the World Aviation Festival. “We increased the number of premium seats in front, and we also thought that we need to deliver a product that is primarily servicing price-sensitive people so we introduced a product that is pretty standard at many other airlines, just in the back part of the plane.”

It looked like a possible a win-win. The airline could add more premium seats, while maintaining excellent unit costs. Passengers (at least in an ideal world) could benefit too; the theory was that WestJet could offer more cheap inventory to compete with discounters. “It was generally to allow for very affordable ticket prices for people who just want a seat,” von Hoensbroech said.

Passengers did not see it that way. Many grumbled quietly, but not Amanda Schmidt, who posted a video on TikTok in January showing her 6’3” father (barely) wedged into the seat on a nearly four-hour flight from Edmonton to Toronto. In the original TikTok, Schmidt jokes: if you wanted to put two legs under the seat in front of you, you’d have to pay for the second leg. Global media soon poked at the airline, including the New York Post, which headlined a story: “Infuriated WestJet passenger shows sardine-can seating in new planes”.

Initially, WestJet punched back on social media, saying “these pitches are in line with what you’ll find across North American airlines.” But 10 days later, WestJet aborted its plan; it removed one row to ensure all standard economy seats would have roughly the same (more generous) legroom.

“It’s not just because of the public noise that it created — that’s usually not what drives us — but we also looked at the data,” von Hoensbroech. “We saw that people who were traveling were less likely to buy new tickets, and we thought: that’s not good.”

In hindsight, WestJet’s executives may not have properly weighed how far it flies these aircraft compared to the European low-cost carriers with similar seat pitch.

“We ride those 737s really long, especially during winter,” von Hoensbroech said. “We fly to the Caribbean. We fly four-, five-, six-, seven-, sometimes even eight-hour flights on a 737. That’s tough on the 28-inch seat pitch, and we got the feedback right away. We always knew it was risky. But if you never try, you never find out.”

“I always say: ‘if you never revert a decision, you're not pushing hard enough.’”

Here’s some other news von Hoensbroech and I talked about.

The U.S. demand problem is old news. Now, Cuba is a pain.

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Airlines outside the United States often salivate over the revenue American, Delta, and United capture from their loyalty programs — you’ve read that in this newsletter many times. Yet at an investor day last month, executives from International Airlines Group expressed no envy. In fact, they argued that by one important metric they’re doing better than the Big 3.

That metric is not absolute revenue, because of course, the Big 3 do make a lot of money from loyalty. Delta earned about $8.2 billion last year from its American Express relationship alone, and United and American likely aren’t that far behind. IAG Loyalty1 — which says it has the world's fourth most valuable loyalty business —reported £2.64 billion in loyalty revenue (about $3.5 billion U.S.).

The metric isn’t percentage of total revenue either. On that, IAG earns about 9 percent of its revenue from loyalty, roughly 3 points less than the combined average of Big 3.2

So what is this mysterious metric, and why is IAG Loyalty so bullish?

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Dear readers,

When network planners join JetBlue, Marty St. George likes to play them a scene from “Glengarry Glen Ross,” the film adaptation of the David Mamet play about a group of competitive, big-city real estate agents. In St. George’s favorite part, one of the main characters is explaining the rules of a sales contest.

“The punchline is: ‘First prize is a new Cadillac, second prize is a set of steak knives, and third prize is ‘you’re fired,’” St. George said.

St. George isn’t suggesting he’ll fire planners for proposing losing routes (though given the airline’s tenuous financial position, cash-negative routes are not ideal). Instead, he’s reminding them that the No. 3 position in an airline market is worthless, while No. 2 is just OK. In a scale business, the top dog wins a disproportionate portion of the profits — and that’s what JetBlue seeks. Anywhere, really.

“We have never had a focus city where we were reliably No. 1 by a big number,” St. George said. “The joke I said in the meeting was the only place we were reliably No. 1 in the market was in Presque Isle, because we’re the only guy that flies there.”

Now, JetBlue has its chance.

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Between sessions at last week’s IATA General Meeting, in the lobby of the Grand Hyatt in Rio, almost all the attendees were asking me (and others, too) the same two questions:

Will Robert Isom survive the year at American? And when he goes — whether soon or in the future — who will replace him?

I learned more about the who than the when1. The executives I spoke to said the list of candidates is an open secret, at least among the most plugged-in insiders. They said American’s board is likely aware of all of these candidates, if only because members have a duty to plan ahead, whether or not they expect a quick regime change.

I'll share that list with you today, but first I want to touch on the two most common theories about when Isom might go.

The first theory is that Isom will be gone by the end of the year. Many insiders say Isom has failed and probably won’t materially improve American’s profitability any time soon, despite copying Delta and United in a late shift to premium. This group believes that the new passenger experience improvements that Isom recently approved — Starlink internet, the Bollinger champagne and Lavazza coffee — were eleventh-hour attempts to save his job, but they won’t work.

The second theory is more complicated. Here’s the gist: at any company, insiders have healthy egos; they want to remain in control, and they fear reputational damage. To protect themselves, they may prefer not to admit mistakes. Sometimes this makes them fallible, irrational, and incapable of seeing the bigger picture.

Isom has been the board’s guy for a long time. By my count, four board members (of today's 12) remain from 2016, when the board asked Scott Kirby to leave. It's old news, but it’s been clear that Kirby — not Isom — should have been the heir-apparent to Doug Parker. In addition, nine independent directors remain from 2023, the peak of American's post-pandemic self-imposed strategy blunders. Either implicitly or explicitly, the board must have endorsed those moves.

In this theory, insiders wonder whether board members want to give Isom more time to succeed in order to protect their legacies, and perhaps their board positions. As you may recall, some of United's board members (outside of Oscar Munoz) did not fare well after they fired Jeff Smisek in 2015, because at least two major investors started asking questions about the board’s ability. In a Reuters story that year headlined "United Airlines faces board fight over poor performance," the news outlet quoted a research firm expert: "This situation is really all about shaking up what Altimeter/PAR thinks is an entrenched and ineffective board."

Ok, enough theories. Here’s the list.

These four are top candidates. One may not be able to take the job.

Doug Parker

Don't act so surprised.

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If you were following news reports from the IATA Annual General Meeting, you’d think executives spent hours in Rio de Janeiro discussing rising fuel prices, the war in Iran, future mergers and acquisitions, and supply chain woes.1 That stuff matters, but let me assure you: these serious conversations are a tiny part of what happens at this meeting every year. So what does happen?

Well, there’s the serious and sober part, when executives engage — often in dreary, windowless rooms at a convention center — with partners and potential partners about alliances, codeshares, interline agreements, and frequent flyer tie-ups. Then, at night, many executives enjoy happy hours and boozy dinners,2 perhaps with former colleagues or maybe with leaders from their airline’s closest joint venture and codeshare partners.

Sadly, airlines never invite me to those bilateral meetings (I hear they can be quite boring), and a carrier only once invited me to a boozy dinner, though just for dessert. But I do participate in what many consider to be the best part of the AGM: the gossip, when executives freely share industry chatter as if they’re characters from “Mean Girls.” The fodder is what you would expect: job openings, people they don’t like, and competitor executives they view as incompetent.3

I’m not going to betray what I learned in off-the-record discussions, but there is a topic that executives will discuss with me “on background” (that’s what you say to me when you’re telling me something I can use so long as it can’t be traced to you). They love to chat about big open jobs — specifically, who is going to get them.4

This year, the favorite topic was: who will replace Robert Isom and when?5 I’ll cover that soon, but since we think Isom has time, I’ll focus on a more urgent personnel matter: who will lead Air Canada no later than Sept. 30 after Mike Rousseau, who does not speak French, retires. Here’s what I heard in Rio about Rousseau’s likely successors.

The top three

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By now you should know the top headlines from last week’s Bernstein Strategic Decisions Conference. I won’t repeat them. You should come to The Airline Observer for the insider-y stuff that others don’t cover.

What they didn’t cover is how Robert Isom once again proved he is both bland and seemingly incapable of selling a compelling narrative about American’s future to investors.

I almost feel bad for the guy. As usual, Scott Kirby — Isom’s former boss and current public antagonizer — soaked up most of the attention at Bernstein with inflammatory comments on JetBlue’s losses. (Kirby was clear he’s not interested in a pre-bankruptcy JetBlue, though he’d gobble up American, should the opportunity arise.)

Kirby likely delights in making Isom look like an amateur. But other CEOs know how to play this rhetorical game too. Even Bob Jordan, whom I once considered the most vanilla man in aviation,1 has learned how to tease investors with enough nuggets to win extra press coverage. (This time, he said Southwest might add first class seats, as well as long-haul flights to as many as a dozen destinations.)

So while Kirby and Jordan played offense at last week’s conference, Isom mostly played defense, just like usual. And not a particularly effective version of it.

Perhaps I should let it go, and admit that’s who Isom is. A former operations chief, Isom is cautious, long preferring controlling costs over investing in cabin interiors, branding, and lucrative (but risky) long-haul flights. Still, I’ll note that, perhaps because I think he wants to retain his job, Isom recently embraced the promise of premium revenues and international flying. There have been improvements; now he must do a better job of communicating it.

Today, I will share with you four things Isom told investors in hopes of changing how investors think of the airline (and his leadership). I respect that Isom no longer views an airline seat as a commodity product, but I still don’t think he fully gets what it will take to turn American around.

Let’s get into it.

Isom used a hockey metaphor. It was incorrect.

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“We’re putting in an overlay that’s not letting the system overreact to a drop in bookings,” chief commercial officer Sophie Dekkers told analysts last week on EasyJet’s FY2026 first half results earnings call.

Even as more airlines trust A.I. and machine learning to give them concrete answers, how to price in an uncertain environment remains a dilemma. With August bookings down 7 percent compared to expectations, EasyJet had two choices – lower its prices (as the machine would suggest), or pray for better times while managing for yield.

EasyJet opted for the second option, because its executives bet they know information about consumer behavior that the revenue management system does not. CEO Kenton Jarvis told analysts that demand is robust, just delayed compared to historical norms, because customers have been spooked by “unhelpful comments” from European politicians who fear potential fuel shortages.

Airlines now know fuel won’t be a problem, but it’s not clear that all travelers have received the message. Some have been taking a wait-and-see attitude for late-summer trips.

”People are just leaving that decision to later,” Jarvis said. ‘We don’t yet know what the fare environment will be for July, August, and September."

‘A game of chicken’

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It should not surprise you which style I prefer. While I h…

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