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July 2008

PlaneBusiness Wild Turkey Award: US Airways' CEO Doug Parker

 

In 2004 PlaneBusiness awarded its first award for airline management excellence. That award is the PlaneBusiness Wild Turkey Award.

Says something when we never are at a loss for potential candidates for the PlaneBusiness Ron Allen Airline Management Award -- but in nine years of publishing we have only found one soul worthy of extra special mention.

Hopefully that track record will improve.

This award pays homage to Herb Kelleher, Chairman of Southwest Airlines -- and legendary Wild Turkey guzzler. As many of you are aware -- there are few around who can drink Herb under the table. But what is even more scary is that after everyone else is under the table -- Herb is just as coherent as he was when the first shot of Wild Turkey was put on the table.

All kidding aside, Herb's business model at Southwest Airlines is not just one that other airlines should bookmark. It's a business model that stands up across any sector you want to throw at it. Management at the airline has, from the start, put an emphasis on employee empowerment. Employees understand that they are a crucial part of the airline's success. More importantly, they are given the authority to do their jobs -- without meaningless management interference.

This plan works because the airline consciously attempts, from the time someone is hired, to bring those folks onboard who fit in with the "open common-sense style management" that starts at the top.

Southwest's marketing, branding, and advertising for the airline is second to none. The airline has clearly succeeded in branding itself the "lowfare airline" in passenger's peabrains over the last 35 years. Even if that is not always the case.

Doesn't matter. The airline is the lowest cost alternative more times than not.

For small business owners, the airline represents a business-friendly low fare alternative.

From a financial perspective, the airline still has the strongest balance sheet in the industry -- and the company continues to churn out profits while most of the rest of the industry continues to struggle.

You won't find Herb or CEO Gary Kelly being driven around by a driver in a black sedan. Country Club memberships? Keep looking. Excessive compensation plans, enhanced by out-of-the-park stock option grants? Not here.

The PlaneBusiness Wild Turkey Award was created to honor those airline CEOs who show this same type of leadership ability, and attempt to run their airline utilizing a similar business model.

In 2004, PlaneBusiness awarded the first Wild Turkey Award to then America West Chairman and CEO Doug Parker.

Oddly enough, we'd been watching Parker even as we had awarded his predecessor, Bill Franke, the PlaneBusiness Ron Allen Airline Management Award a few years earlier -- back in the dark days of America West.

Just goes to show that you shouldn't give up on a hopeless case.

Which is one of the reasons we were so impressed with Parker in 2004.

A few years earlier, Parker had taken over control of an airline, America West, that was, admittedly, a horrible mess.

The airline had alienated passengers for years with horrible service brought about by internal operational failures. It kept trying to play with the big boys on fares, while also attempting to position itself as a low fare airline. It's advertising and marketing was rudderless. The airline's relationship with its employees even worse.

The airline, which had already gone through bankruptcy once, was headed in the same direction again.

But that was not to be.

First, Parker began to slowly work on improving America West's operational integrity. Second, and most importantly, he gutted the airline's existing fare structure -- opting instead to go with a more flat-based low-cost structure.

Analysts were shocked. None thought the airline had made the right decision at the time. Most predicted a horrible fare war between the airline and its competitors. Those who felt Parker had made the right decision were few and far between.

But we were behind the change. We were one of the few who said publicly that we believed in what the airline was doing. We thought the change made sense.

Not only that, but it was one hell of a ballsy move.

From that point on, Parker began, slowly, to work on improving the airline's relationship with its employees -- not an easy task. He also sought to improve the relationship of the airline with members of the media. To say that media relations with the Franke regime had not been particularly pleasant would be an understatement.

But our award to Doug was also based on Doug as a person.

Doug is one of the most approachable and unpretentious individuals you will ever meet. He's not concerned with raping the company for stock options and obscene compensation packages. No, and he doesn't have a driver and a black sedan either.

While other CEOs bore us with corporate speak and twist words in an attempt to appease employees -- Doug just talks. Just like a good writer writes, Doug speaks to everyone the same way -- in his natural conversational, no bullshit way.

Finally, in a nod to what Parker told us when we awarded him the award, it's not just him. He stressed that it was all of the people at the airline who had worked so hard to turn America West around.

We concurred. But we also knew who had been responsible for putting that team together.

Doug Parker.

Editor's Note: Our thanks to Southwest Airlines' Chairman Herb Kelleher, who was extremely gracious in his acknowledgment of our PlaneBusiness Wild Turkey Award. Not only did he send Doug Parker a case of Wild Turkey Rare Breed, upon hearing of him having received the award - but he promised us that any future award winners would receive the same.