ANALYSIS: Client Profile - American PR returns to its upright position/American Airlines, desperate to distance itself from the legacy of its irascible former CEO, has tightened its PR ship considerably Sherri Deatherage Green samples the added leg room.

In the always competitive, often troubled airline industry, American wants to be leaner but not meaner.

In the always competitive, often troubled airline industry, American wants to be leaner but not meaner.

In the always competitive, often troubled airline industry,

American wants to be leaner but not meaner.



American’s parent company, AMR, has embraced divestiture to focus on

core airline service. Sabre, its widely used IT subsidiary, became the

latest spin-off in April. Concurrently, American is trying to shake

confrontational vibes left over from a brilliant yet abrasive CEO. Bob

Crandall, who retired in 1998, helped pioneer innovations like frequent

flyer programs and the hub-and-spoke route system. While the industry

recognizes Crandall as one of its most influential figures, no one ever

accused the native Rhode Islander of being warm and fuzzy.



Tense labor relations mark the highly unionized airline world, and

Crandall played hardball when dealing with well-paid but temperamental

pilots.



During the turbulent years after deregulation, American’s salary schemes

created significant pay inequities between new hires and those with

seniority.



Dr. Adam Pilarski, SVP of aviation consulting firm AVITAS, recalls

requesting a drink aboard an American flight and being told to ask

another attendant who made more money. ’Conflict with employees destroys

the morale and destroys your reputation as a service provider,’ he

says.





Exorcising old demons



Crandall doesn’t necessarily deserve his autocratic reputation, claims

Christopher Chiames, AMR’s managing director of PR. Decision making was

and still is collegial and participatory, he claims. ’Where there was no

consensus, (Crandall) never hesitated in making a decision.’



Under Crandall’s rule, AMR became known for stating its positions

forthrightly.



Dan Reed of the Fort Worth Star-Telegram described AMR as a

’free-speaking, perpetual MBA management seminar.’ ’It was a very

stimulating environment to be around as a reporter,’ he says. ’You could

choose to play devil’s advocate and they’d debate you.’ Now,

spokespeople stick closer to message.



While Reed ranks AMR’s PR team among the best, he notes, ’They have

tightened up in the last three or four years on making their executives

available to the press.’



The new CEO, Don Carty, seems intent on a kinder, gentler management -

which shouldn’t be too difficult, given his predecessor’s record. ’On

his worst, most angry day, he can’t hold a candle to Bob Crandall on his

happiest day,’ jokes Mike Boyd, president of the Boyd Group, a Colorado

aviation consulting firm.



Carty’s first concern was improving employee relations. He shifted

oversight for corporate communications to the SVP of human resources.

Realigning internal PR based on changing company direction is nothing

new at AMR, says Tim Doke, VP of corporate communications. In the last

eight years, Doke says his department has reported to HR once, general

counsel once and the chairman three different times. During the

litigious early 90s, AMR was involved in congressional debates on

international aviation and several high-profile lawsuits.



Efforts to improve workers’ lives included a 24-hour employee assistance

program, publicizing 1998’s record profit-sharing totals and offering

low-cost computers and Internet service. But the jury is still out on

whether employee morale is improving. Those with a long memory still

recall Carty’s role in AMR’s questionable purchase of Reno Air, Boyd

says.



In January, corporate communications shifted yet again to the marketing

and planning division under EVP Michael Gunn, a move that reflects the

company’s heightened emphasis on customer satisfaction. ’I have the

feeling that this is the home we’re going to have for a while,’ Doke

says. He notes that corporate communication has always worked closely

with the CEO and is recognized as an integral business function: ’We

don’t suffer from being left out of decision making.’



Tough decisions are part of everyday life in American’s PR department

these days, as service complaints against airlines led to congressional

hearings last year. American faced added hurdles with pilot problems in

February and flight delays caused by weather and new air traffic

systems.



’We were clearly making our customers unhappy,’ Chiames says.





Increased leg room



So in early February, AMR announced at a Washington, DC press conference

that it would eliminate two rows of coach seats to give passengers more

legroom. The PR team’s work on the ’More Room’ campaign garnered

widespread positive coverage and praise from consumer groups. ’It takes

guts, and it may be a brilliant move,’ Pilarski says. American is

gambling that the extra seats would have been empty anyway in a cooler

economy, and that passengers would prefer more leg room to lower fares,

he explains.



Burson’s Washington office helped the in-house staff make the

announcement.



AMR doesn’t have an agency of record, but it works frequently with

Burson, BSMG Worldwide in Dallas and JGR in Miami as well as several

international firms. Burson pitches in on public affairs and issues

management and provides ’surge capability,’ says Richard Mintz, managing

director of the Washington office. ’I’ve never seen a busier corporate

communications office,’ Mintz says.



Forty-five PR pros and over 80 publication staffers report to Doke. The

in-house operation includes PR, community, employee and labor relations,

charitable giving and museum management. Chief spokespeople are Chiames

and Al Becker, who hasn’t missed a day of work in 30 years.AA Publishing

is a dollars 60 million business that produces American Way and other

magazines for outside clients, including crosstown rival Southwest

Airlines.



’On the days we get bored doing corporate communications, we can go play

in the magazine world,’ Doke quips.



Those days are few and far between, since the skies aren’t always

friendly to American. ’We joke that we work in the ER of PR,’ Chiames

says. It takes quite a lot to faze the corporate communications staff.

’We deal with issues on a daily basis that most staid corporate offices

would consider a crisis,’ Doke says. ’We really don’t have a crisis

unless a plane is involved.’



That happened last summer when nine people died aboard an American plane

that landed badly in Little Rock. American’s frequently drilled crisis

communication plan kicked in. ’The biggest problem we had after Little

Rock was getting people to go home and get some sleep,’ Chiames

says.



The staff went to three shifts for 24-hour coverage, Doke recalls.



In the government relations arena, American is putting lots of energy

into convincing Congress to pick it over UPS and Delta as the new air

carrier to China. To that end, the company sent 150 employees to

Washington in April to lobby lawmakers on free trade with China.

Meanwhile, the Justice Department is deposing witnesses in a predatory

pricing lawsuit against American. Burson assisted the company by quickly

establishing a Web site to refute various claims in the government’s

case.



In Washington as elsewhere, CEO Carty is distancing himself from

Crandall’s confrontational and aggressive behavior. ’He wants to work in

coalitions,’ Mintz observes. ’He wants to be a partner.’ Some added

legroom will make that distancing process a lot easier.





AMR



PR chief: Timothy Doke, corporate communications VP



Corporate PR team: Christopher Chiames, PR; Al Comeaux, international

PR; Barbara Hawkins, community relations; Marty Heires, employee

communications; Andrea Rader, labor communications; Kathy Anderson, AMR

Foundation; Rick Morrison, AA Publishing; Jay Miller, C.R. Smith Museum;

Mike Lenz, IR (reports to CFO)



PR Staff: 45, plus more than 80 employees in the publishing division



External agencies: No agency of record but uses Burson-Marsteller in

Washington, BSMG in Dallas, JGR in Miami and several international

firms.



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