scubadu

I'm not sure things are quite so binary. Do I believe the board cares about customer satisfaction, whether the stock is going up or down? I believe they would say that of course they do, and I suspect that is somewhat true.

However, the disconnect is the board likely does NOT care about customer satisfaction in the way and to the degree that FTer's seems to believe/want/hope they should.

Regards

Antarius

The board doesnt want Dr. Dao type PR disasters. Other than that, they aren't following whether AA's satisfaction rating is 82% or 79%.

That's why they hire a CEO and pay him/her a lot of money.

scubadu

Yep, agreed. Though I think that is lost on a great many FTers...

Regards

TheDudeAbides

I can see that you're an expert. AA in Chapter 13... lolz.

ryan182

yeah at first thats an epic lolz ( for those that don't know, Ch13 has exactly nothing to do with corporations and is a individual BK), except then you stop to think and reflect on how many people fancy themselves as knowledgable in how companies, specifically those that are publicly traded, work and then you quickly get sad because mobs of uneducated but strongly opinionated people with twitter accounts can and do affect decisions of major corporations. I'm waiting, impatiently, for the time that we wake up and realize that the people on the Internet who get the most upset do so because they have no job and thus no purchasing power and everyone stops giving a squat what they think.

george 3

While I'm not a board member of a public corporation, I'm a senior executive of a private one, and I'm always concerned about what my customers think about my products and how we provide service to them.

richarddd

Boards and executives are usually concerned about customer satisfaction to the extent it affects profits. No one is denying AA cares about customers to this extent.

Customer satisfaction is a means to an end, not an end in itself, at least in the case of a for-profit business. Would you increase spending on products and services so much that your business was no longer profitable, even though customers would be happier with the better products and services?

no1cub17

I would say that's true in most industries. Even McDonald's and Wal-Mart seem to care about their customers. But AA's BOD clearly feels that they don't have to care. Whether that's because the US airline industry is an oligopoly or not. Or at the very least they think it's important to make it look like they care about some customers but not others.

MiamiAirport Formerly NY George

BOD of a large public company are not going to get involved in "customer satisfaction" levels in any nuanced way. They might have some broad knowledge of summaries and would expect the management team to deal with deficiencies. The biggest issue what is "customer satisfaction"? For most flyers it's an ontime flight and if they check bags their bags show up with them at their destination. For the relatively small number of elites (and yes a Monday morning flight out of DFW might by 75% elites) it could be far beyond that.

The issue with surveys is that few customers (other those on FT) that had a good or average experience will respond, particularly to AA's long surveys. So you hear from the opposites, particularly the negative. (Just like politics).

BOD aren't warm and fuzzies. They deal with the financials of the enterprise, and are they on target/budget and to a lesser extend how to they compare to like peers. The first we do not know as we are not privy to AA's budget. The second measure AA clearly trails behind.

george 3

It makes no rationale sense to increase spending on a non-profitable segment(s) to wit, it won't be profitable in the future. In that case, you continue to do what you do badly, you sell, you negotiate with your capital base or you change your business to what you will publicly acknowledge. If AA believes a Frontier model works, then they should publicly state that that is a profitable model and we will be over time rolling towards that. To play pretend they way they are now, is a path to failure.

richarddd

A BOD's responsibilities extend well beyond the financials, budgeting and the like (at least under Delaware law). They should be aware of the general business strategy, should make sure it's coherent and achievable and should monitor management's progress. Directors must make a good faith effort to implement an oversight system and then monitor it.

Was anyone suggesting they have to be aware of customer surveys or social media chatter?

It really would be a good idea for AA to have a clear and coherent business strategy that could be explained to customers and investors, could be explained to and implemented by its employees and that bears some relation to reality. This does not appear to be the case currently.

scubadu

Well, I don't think I said anything that contradicts what you are saying and I don't think you said anything that contradicts what I am saying.

What I said is that I think/assume that AA's board likely cares (or at least believes they care) about customer experience/satisfaction.

However, what I also said, relative to this forum, is that what FTers, who often sit around in their boxers, liquored up and posting anonymously on the internet, want/believe/hope/demand/lose their minds over, is a completely different definition of customer satisfaction/experience than I believe AA's leadership or board are actually operating to. Both can be true simultaneously.

Separate from that, the fact that you, as a senior executive do care, does not mean, ipso facto, that all senior executives or board members do care. You are a data point, but not one of relevance to the performance or results delivered by AAs BOD (no offense intended, just stating a fact).

Regards

IADCAflyer

Well, United announced earnings yesterday:

United’s third-quarter net income jumped nearly 23% to more than $1.02 billion from the year-earlier period on revenue of $11.38 billion, an increase of 3.4% from a year ago, but below the nearly $11.42 billion analysts expected.

https://www.cnbc.com/2019/10/15/unit...-earnings.html

And, "{t}he Chicago-based carrier raised its forecast for 2019 earnings to $11.25 to $12.25 a share, up from its previous forecast of $10.50 to $12. Shares were up 2% after United released the results."

SS255

Well, maybe you should run an airline, then. It would be a refreshing change!!