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Investing.com – American Airlines stock (NASDAQ:AAL) traded 3% higher in Tuesday’s premarket after the carrier said chief executive Doug Parker will step down at the end of March.
He’ll be replaced by Robert Isom, currently the company’s president.
Parker had gained fame for claiming to have broken the grip of the business cycle on the air travel business, using that argument as the pretext for a rapid increase in stock buybacks and dividends in the last five years. That left the company short of capital and dependent on government handouts when the pandemic struck in early 2020.
Isom will also join the airline’s board of directors on the same date, while Parker, who led the airline for 20 years, will continue to serve as chairman.
Named president of the airline in 2016, Isom has more than three decades of experience across finance, operations, planning, marketing, sales, alliances, pricing and revenue management.
Isom takes over at a juncture when the entire industry is still reeling from the pandemic. A nascent recovery, marked by the lifting of restrictions on inbound transatlantic flights, has been threatened in the last week by the discovery of the new Omicron strain. That has prompted many countries, including the U.S., to bring back restrictions on air travel, albeit in a more limited way.
American Airlines returned to profit in the third quarter and said it will add capacity to cater to rising demand.
Third-quarter profit was $169 million compared to a loss of $2.39 billion in July-September last year. Excluding special items, the company posted a third-quarter net loss of $641 million.
The airline said in October that it expects its fourth-quarter capacity to be down no more than 13% from the fourth quarter of 2019. It expects fourth-quarter revenue to be down around 20%.
