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April 2019

typewriterPlaneBusiness Ron Allen Airline Management Award

 

In 1997 PlaneBusiness Banter awarded the first PlaneBusiness Ron Allen Airline Management Award to.....Ron Allen. Ron was then Chairman and CEO of Delta Air Lines.

We felt that Ron so well embodied those traits that an airline CEO should not possess -- that he had been such a detriment, or perhaps impediment, to the financial success and innovative progress of Delta Air Lines while at its helm -- that his moniker should grace each successive award.

And just what were our complaints with Ron?

Remember Allen's "Leadership 7.5" program?

The goal of this program was to slash costs at the airline to 7.5 cents/mile. As though this alone would solve the airline's problems. You know the drill. Keep Wall Street happy. Tell them you're cuttin' costs. Meanwhile the company suffered as cuts implemented were not the cuts that should have been made. Oftentimes they were cuts that affected passenger service and customer relations, for example. Short-sighted and ill-planned.

As management at the airline chose not to cut executive salaries or other perks associated with the high-cost airline's structure, and the airline started slashing costs on items that directly affected its abilty to provide its legendary excellent passenger service -- Allen's reputation was put into motion.

What the airline embarked on was nothing less than a suicidal mission. Not only was the company's mission to "cut costs" horribly executed, and ill-thought out, but there was little attention paid to improving the airline's revenue management performance. In fact, at best, revenues were flat during this period--when they should have been improving markedly.

Innovative thinking? Cutting edge technology? It wasn't to be found at Delta.

Meanwhile, one thing Ron did do well was play golf. As one of our subscribers said to us not too long ago, "Ron was a great guy. He just wasn't CEO material. I can't count the number of times he'd just shut down a management meeting so we could catch 18 holes before the sun went down."

Yeah, he was a great guy. He just wasn't a great CEO.

Ron's legacy at Delta Air Lines endures today, as a result of our bestowing him the honor of having his name associated with the most coveted award in the airline industry -- the PlaneBusiness Ron Allen Airline Management Award.

Since 1997 the award has continued to be awarded to that group or individual who, in our opinion, did more financial harm than good, for their respective airlines during the preceding year. Or, in one case, to the airline industry as a whole.

Other PlaneBusiness Ron Allen Management Award Recipients:

1997 Ron Allen, Delta Air Lines' Chairman and CEO
1998 Robert Ayling, British Airways' CEO
1999 Stephen Wolf and Rakesh Gangwal, US Airways' Chairman and CEO
2000 Bill Franke, America West Chairman and CEO
2001 Jim Goodwin, United Airlines Chairman and CEO
2002 United Airlines' Board of Directors
2003 Don Carty - American Airlines' Chairman, CEO and Dave Siegel, US Airways' CEO (tie)
2004 General Electric Commercial Aircraft Services (GECAS)
2005 Kerry Skeen, CEO Independence Air

Click here to read our column on the PlaneBusiness Ron Allen Airline Management Award's most recent recipient, Kerry Skeen.

 

 

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