Former American Airlines CEO visits School
September 10, 2003
2003-09-10 - An enthusiastic round of applause signaled students’ appreciation at the end of Queen's alumnus Don Carty’s forthright and candid remarks to a Commerce marketing class.
The former CEO of American Airlines’ parent company, AMR Corporation, spent two packed days at Queen's School of Business, meeting with faculty and speaking to students from three of the School’s programs. This was his first visit back to Queen's since receiving an honorary degree in May 2001.
“I'm very glad to be back at Queen's,” was Carty’s opening remark to the Commerce class. “It's a great place to learn. A good place to grow. I hope your experience here contributes as much to your lives as it did to mine."
He went on to talk about the challenge of business transformation, using American Airlines’ recent history as an example. He gave a fascinating recap of the series of challenges the airline faced, starting with the economic downturn in 2001. The tragedy of September 11 followed that year, then the November 12 AA crash in New York City. The economy took a massive downturn that fall, with customers fearing terrorist attacks, and then fearing to fly the particular jet that crashed. After the “shoe bomber” incident from Europe to the US on American Airlines, business dropped off even more dramatically.
“People were afraid of flying, but especially afraid of flying a carrier named 'American'.” Added to dropping consumer demand was the rising cost of fuel because of uncertainty in the Middle-East, then the lead-up to the Iraq war. Increased security drove costs up, as did the hailstorm in Dallas that grounded 100 aircraft.
“A perfect storm" was how Carty described the conditions to students. In a letter to the AMR Board of Directors after the Dallas hailstorm, in jest he likened recent events to a biblical plague. “The confluence of circumstances would have been unbelievable if this was the plot of a Hollywood film,” he told students.
Carty discussed how American Airlines dealt with these challenges – the importance of communicating with employees to clearly spell out the gravity of the situation, and to engage their support for the drastic measures required – which led up to his resignation in April 2003. Carty’s candid remarks prompted many student questions, several of which Carty complimented.
Generous with his time, Carty also spoke to Queen's MBA for Science & Technology students on issues of leadership, as well as to participants in the week-long Leadership program at Queen's Executive Development Centre.