Robert Crandall

Last updated
Robert Crandall
Robert L. Crandall 01.png
Robert Crandall in 2015
Born (1935-12-06) December 6, 1935 (age 88)
Alma mater University of Rhode Island
University of Pennsylvania
Occupation(s)Former President and CEO of American Airlines (1985-1998)

Robert Lloyd "Bob" Crandall (born December 6, 1935, in Westerly, Rhode Island) is an American businessman who is the former president and chairman of American Airlines. Called an industry legend by airline industry observers, Crandall has been the subject of several books and is a member of the Hall of Honor of the Conrad Hilton college. [1]

Contents

Early life

The Great Depression forced Robert Crandall's father to leave Rhode Island to work selling life insurance, which resulted in multiple relocations. Crandall ended up attending 13 schools before his high school graduation. [2] He graduated from the University of Rhode Island, and from the Wharton School of the University of Pennsylvania, with an MBA. [3]

Airline career

In 1966, he joined TWA, where he worked for six years. In 1972, he left to become a senior financial officer at Bloomingdale's Department Stores, but he returned to the airline industry in 1973, as senior financial vice president of American. [3]

In 1982, he had a famous conversation with Braniff CEO Howard D. Putnam, in which he told Putnam that if Braniff raised their prices, American would too. Crandall has publicly expressed embarrassment over that conversation. That same year, Crandall became American's president. In 1985, Crandall succeeded Albert Casey as American's chairman and CEO. [4]

During the latter period of Crandall's tenure as CEO, investor concern over airline bankruptcies and falling stock prices caused Crandall to remind his employees about the dangers of investing in airline stocks. Known for his candor, Crandall later told an interviewer, "I've never invested in any airline. I'm an airline manager. I don't invest in airlines. And I always said to the employees of American, 'This is not an appropriate investment. It's a great place to work and it's a great company that does important work. But airlines are not an investment.'" Crandall noted that since the airline deregulation of the 1970s, some 150 airlines had gone out of business. "A lot of people came into the airline business. Most of them promptly exited, minus their money," he said. [5] [6]

Crandall is credited with creating the first major mileage-reward frequent flyer program in the airline industry, the AAdvantage program, as well as pioneering modern reservations systems through the creation of Sabre. He is also credited with pioneering yield management. [7] Crandall also serves as a senior adviser and sits on the board of AirCell, an in-flight telephony company which won the larger of two licenses for air-ground data service that provide in-flight broadband service. [8]

In 1998, he retired from American and he went on to work as director of many other companies, including Celestica, Haliburton, and Anixter.

Criticism of deregulation

Before the passing of the 1978 Airline Deregulation Act, Crandall was one of the act's loudest opponents. When asked to comment on deregulation in June 2008, Crandall stated:

The consequences of deregulation have been very adverse. Our airlines, once world leaders, are now laggards in every category, including fleet age, service quality and international reputation. Fewer and fewer flights are on time. Airport congestion has become a staple of late-night comedy shows. An even higher percentage of bags are lost or misplaced. Last-minute seats are harder and harder to find. Passenger complaints have skyrocketed. Airline service, by any standard, has become unacceptable. [9]

In 2018, he stated:

At the time when we opposed [deregulation], when I opposed it, we took the view that it was likely to result in a relatively unsatisfactory transportation network, and I think that's happened... If you look at the number of cities that have lost commercial service, you'll see there's a whole lot of places in the country that used to be part of the network that aren't anymore. I think that has accelerated the movement of people towards the big cities and has discouraged the creation of medium-sized cities... I think that's adverse to the economy and adverse to the country. [10]

Reputation for cost-cutting

While at American Airlines in the 1980s, Crandall was famed for his focus on cost-cutting. One story that has been frequently retold since is that he came up with the idea to remove one olive from every salad served to passengers. No one would notice and the airline would save $40,000 a year. [11] [12] Another story, which Crandall himself shared, involved cutting security at a Caribbean station warehouse to the point that the only guard left was a sound recording of a guard dog barking. [13]

Honors and awards

Related Research Articles

<span class="mw-page-title-main">Airline</span> Company that provides air transport services for passengers and freight

An airline is a company that provides air transport services for traveling passengers and/or freight. Airlines use aircraft to supply these services and may form partnerships or alliances with other airlines for codeshare agreements, in which they both offer and operate the same flight. Generally, airline companies are recognized with an air operating certificate or license issued by a governmental aviation body. Airlines may be scheduled or charter operators.

<span class="mw-page-title-main">Air Florida</span> US intrastate airline (1972–1985)

Air Florida was an American low-cost carrier that operated under its own brand from 1972 to 1984. During the period from 1972 to 1978 Air Florida was an intrastate airline. Until a high-profile 1982 aircraft crash in Washington DC, Air Florida was considered an early success story of U.S. airline deregulation, having expanded rapidly from its original Florida network, including internationally to Europe and Latin America. After the crash, the airline struggled for over two and a half years before finally succumbing to bankruptcy in 1984.

Pacific Southwest Airlines (PSA) was a low-cost US airline headquartered in San Diego, California, that operated from 1949 to 1988. It was the first substantial scheduled discount airline. PSA called itself "The World's Friendliest Airline" and painted a smile on the nose of its airplanes, the PSA Grinningbirds. The Los Angeles Times called PSA "practically the unofficial flag carrier airline of California for almost forty years."

<span class="mw-page-title-main">Braniff International Airways</span> Defunct airline of the United States (1928–1982)

Braniff Airways, Inc., operated as Braniff International Airways from 1948 until 1965, and then Braniff International from 1965 until air operations ceased, was a United States trunk carrier, a scheduled airline that operated from 1928 until 1982 and continues today as a retailer, hotelier, travel service and branding and licensing company, administering the former airline's employee pass program and other airline administrative duties. Braniff's routes were primarily in the midwestern and southwestern United States, Mexico, Central America, and South America. In the late 1970s it expanded to Asia and Europe. The airline ceased air carrier operations in May 1982 because of high fuel prices, credit card interest rates and extreme competition from the large trunk carriers and the new airline startups created by the Airline Deregulation Act of December 1978. Two later airlines used the Braniff name: the Hyatt Hotels-backed Braniff, Inc. in 1983–89, and Braniff International Airlines, Inc. in 1991–92.

Airline deregulation is the process of removing government-imposed entry and price restrictions on airlines affecting, in particular, the carriers permitted to serve specific routes. In the United States, the term usually applies to the Airline Deregulation Act of 1978. A new form of regulation has been developed to some extent to deal with problems such as the allocation of the limited number of slots available at airports.

Gordon M. Bethune is a retired US airline executive. He was the CEO of Continental Airlines from 1994 until his retirement at the end of 2004. He formerly served on the boards of Honeywell and Prudential Financial. Bethune was known for ensuring that he received some time as a pilot when taking delivery of a new Continental Airlines Boeing 767 from Boeing and repositioning it from Seattle to Houston.

William A. "Pat" Patterson was the President of United Airlines from 1934 until 1966.

<span class="mw-page-title-main">Herb Kelleher</span> American airline businessman (1931–2019)

Herbert David Kelleher was an American billionaire airline businessman and lawyer. He was the co-founder, later CEO, and chairman emeritus of Southwest Airlines until his death in 2019.

Howard D. Putnam is an American businessman. He was CEO of Southwest Airlines for three years, and later CEO of Braniff International Airways at the time of its bankruptcy.

<span class="mw-page-title-main">Paul Revere Braniff</span>

Paul Revere Braniff was an airline entrepreneur. Braniff was one of the original founders of Braniff International Airways. He served as a mechanic in World War I in the United States Army and then as a pilot in World War II.

<span class="mw-page-title-main">Tony Jannus</span> American pilot (1889–1916)

Antony Habersack Jannus, more familiarly known as Tony Jannus, was an early American pilot whose aerial exploits were widely publicized in aviation's pre-World War I period. He flew the first airplane from which a parachute jump was made, in 1912. Jannus was also the first airline pilot, having pioneered the inaugural flight of the St. Petersburg–Tampa Airboat Line on January 1, 1914, the first scheduled commercial airline flight in the world using heavier-than-air aircraft. The Tony Jannus Award, created to perpetuate his legacy, recognizes outstanding individual achievement in the scheduled commercial aviation industry and is conferred annually by the Tony Jannus Distinguished Aviation Society founded in Tampa, Florida, in 1963.

<span class="mw-page-title-main">Doug Parker</span> American businessman

William Douglas Parker is an American businessman who is the chairman of American Airlines Group, the parent company of American Airlines. Parker previously served as chief executive officer of the airline from 2001 to 2023.

<span class="mw-page-title-main">Robert Six</span> American businessman (1907–1986)

Robert Forman Six was an American businessman who was the CEO of Continental Airlines from 1936 to 1980. Beginning his career in the early days of commercial aviation in the United States, his time as Continental Airlines CEO saw it become one of the world's largest and most profitable legacy airlines.

<span class="mw-page-title-main">Braniff (1983–1990)</span> Defunct U.S.-based airline, 1984–1989

Braniff Inc. was a US-based airline that operated flights from 1984 until 1989 and was partially formed from the assets of the original Braniff International Airways. The domestic air carrier was originally headquartered at Dallas Love Field in Dallas, Texas, and later Orlando, Florida. The airline is sometimes referred to as "Braniff II".

<span class="mw-page-title-main">J. George Mikelsons</span> American businessman

Juris George Mikelsons was a former airline executive and airline pilot in the United States and the founder of ATA Airlines. He was born in Riga, Latvia, in 1938 on the eve of World War II. His family fled to Germany during the mid-1940s to escape the Soviet occupation of the Baltic states.

<span class="mw-page-title-main">Tony Jannus Award</span> American commercial aviation award

The Tony Jannus Award recognizes outstanding individual achievement in scheduled commercial aviation by airline executives, inventors and manufacturers, and government leaders. The award is conferred annually by the Tony Jannus Distinguished Aviation Society and was first bestowed in 1964 in Tampa, Florida, U.S. Its namesake, aviation pioneer Tony Jannus, piloted the inaugural flight of the St. Petersburg–Tampa Airboat Line on January 1, 1914, the first scheduled commercial airline flight in the world using heavier-than-air aircraft. In addition to preserving the legacy of Tony Jannus, the non-profit Society also offers financial assistance to college students pursuing studies in aviation and conducts an annual essay contest for high school students to encourage careers in aviation.

<span class="mw-page-title-main">Benoist XIV</span> Type of aircraft

The Benoist XIV, also called The Lark of Duluth, was a small biplane flying boat built in the United States in 1913 in the hope of using it to carry paying passengers. The two examples built were used to provide the first heavier-than-air airline service anywhere in the world, and the first airline service of any kind at all in the United States.

<span class="mw-page-title-main">Ed Acker</span> American businessman (born 1929)

Charles Edward Acker is an American businessman who was CEO of Braniff Airways, Air Florida, and Pan American World Airways. He is a principal at Intrepid Equity Group.

This is the history of Braniff International Airways.

<span class="mw-page-title-main">William R. Howard</span> American businessman and airline executive

William R. Howard was an American businessman and airline executive. He was best known as the Chairman and CEO of Piedmont Airlines, growing it from a small regional airline to a major US carrier throughout the post deregulation environment of the late 1970s and 1980s. He was also involved in many other business ventures throughout his career.

References

  1. 1 2 "Robert Crandall". Hrm.uh.edu. Retrieved 2010-08-06.
  2. Petzinger Jr., Thomas (1995). Hard Landing: The Epic Contest for Power and Profits That Plunged the Airlines into Chaos. River Press, New York, 594 p. ISBN 0-8129--2835-0.
  3. 1 2 "Robert Crandall (biography)". University of Houston. Retrieved 2008-04-01.
  4. "DePaul University College of Law". Law.depaul.edu. Retrieved 2010-08-06.
  5. Greenberg, Peter, Inside American Airlines: A Week in the Life, CNBC Documentary Feature, October 18, 2006
  6. Roeder, David, Stock Seer Sees No Reason Dow Won't Continue Steady Growth, sub. Fear of Flying, Chicago Sun-Times, October 22, 2006
  7. "Robert Crandall 1935— Biography". Referenceforbusiness.com. Retrieved 2010-08-06.
  8. "News Releases". Aircell.mediaroom.com. 2003-09-11. Retrieved 2010-08-06.
  9. Bill McGee, March 2008. , USA Today.
  10. Schaal, Dennis (2018-07-24). "American Airlines Legend Bob Crandall on How Mergers Led to Increased Inequality". Skift. Retrieved 2018-07-31.
  11. Deutsch, Claudia H. (6 May 2001). ". . . And to Penny-Pinching Wizardry" . The New York Times. Retrieved 20 May 2016.
  12. "How to cure an airlines' ills". NBC News. 29 October 2003. Archived from the original on July 3, 2013. Retrieved 20 May 2016.
  13. "- YouTube". YouTube .
  14. "Tony Jannus Award past recipients". Tony Jannus Society. Archived from the original on July 13, 2007. Retrieved 2008-04-01.
Business positions
Preceded by American Airlines CEO
1985–1998
Succeeded by