ARC’s "Bob Crandall Story"

ARC’s "Bob Crandall Story"

The American Airlines legend sat down for an intimate, “Anything Goes” interview with PlaneBusiness Banter’s Holly Hegeman.

There are a few transcendent figures in air travel whose legacies will be remembered for generations to come. Robert L. Crandall, former president, chief executive officer and chairman of American Airlines, is one of those visionaries. As Holly Hegeman, publisher of PlaneBusiness Banter, likes to put it: "Everyone has a Bob Crandall story."

At TravelConnect 2018, attendees had the unique opportunity to hear straight from the legend himself during a special one-on-one "Anything Goes" interview with Hegeman. Crandall offered frank commentary on a number of milestones throughout his legendary career including Sabre, deregulation, AAdvantage and his management style.

The SABRE Automated Reservation Platform

Crandall helped oversee the introduction of the Sabre system at American Airlines. Implementing the transformative technology was no small feat, and Crandall ran into a few roadblocks along the way.

Before even getting off the ground, the project faced an early demise when Crandall was called before the American Airlines board to present his idea. His competition: None other than EDS founder, billionaire and former two-time presidential candidate, Ross Perot. Crandall won out, and Sabre would go on to revolutionize the reservation process, help American achieve unrivaled financial success at the time and become a cornerstone of the future global air travel distribution ecosystem.

To say that Crandall’s “computer project” had an impact on the industry would be the understatement of aviation history.

Deregulation and Modern Aviation Infrastructure

It's no secret that Crandall was adamantly opposed to the Airline Deregulation Act of 1978, and he remains opposed to it 40 years later. From Crandall's perspective, deregulation had a large influence on regional inequality, driving populations and businesses to large hub cities when they could no longer access frequent or affordable service in smaller cities and less populous regions. While he admits that "we can't go back," Crandall still believes that the United States needs, "Some modicum of regulation, which would moderate behavior in of the industry in some respect," even if it means his remains the unpopular opinion.

Regarding the Unites States' air travel infrastructure, Crandall couldn't have been clearer: Major investment needs to be made in both the physical and technological theaters, and that investment needs to be made now, as interest rates continue to climb.

Crandall specifically called out the current state of the United States' air traffic control system, saying, "If we had an [Air Navigation Service Provider] ANSP in the U.S., we could use the air space much more intensively, operate a lot more flights and make room for a lot more passengers."

How does the industry affect the changes needed to accomplish such an audacious set of goals? It’s simple, he says: “We change it by voting.”

AAdvantage: A Revolution in Loyalty

While many credit Crandall with creating AAdvantage, the world's largest travel loyalty program, he made it a point to insist that, "Any great thing is not the product of one person. There was a whole team of people who created Advantage," adding with a smile, "I happened to be the head of that team."

"Any great thing is not the product of one person. There was a whole team of people who created Advantage"

The early 1980s were a hypercompetitive era in the air travel industry. Deregulation had opened up the market to new entrants and routes, and airlines were seeking every possible advantage.

At American, Crandall and his team were asking a simple question in their own quest for growth: "What does the consumer want most?" The answer, it turns out, was pretty simple: More travel. So, they set out to find a way to deliver on that desire and "make travel available as a prize." Leveraging Sabre to keep track of miles flown, the team at American could automate the rewards process. In previous models, it had been up to a manual customer-driven process. Upon its launch on May 1, 1981, AAdvantage was a massive success, with competitors immediately matching the program within 48 hours. But, American had an ace up their sleeve: AAdvantage had a calendar limit -- miles were only accumulated over the course of a year. So, as Crandall put it, "Every time you flew, you flew American."

When asked if he had ever envisioned the path that loyalty programs would take over the next several decades, including card partnerships, Crandall modestly said, "Nobody that's got something that burgeons beyond its original size can imagine all the downstream ramifications. I thought I was being pretty bold."

Reflecting on His Leadership and Legacy

When asked what made him a good airline executive, Crandall gave a simple answer than most would probably expect, but none were overly surprised to hear: He likes operational complexity.

"I like the fact that to run an airline properly, you have to do a zillion little things right every day," he said. As an operationally oriented person, Crandall is a self-admitted micromanager. "I want to know everything that's going on and when and why, and if it doesn't work, I want to know why and I want it fixed tomorrow." Grinning, he added, "I enjoyed that part of the job immensely."

"I like the fact that to run an airline properly, you have to do a zillion little things right every day"

Getting a little more philosophical about American's success under his leadership, he added, "People who want to do good respond affirmatively to a challenge. People want to do well; give them a chance to do well."

It was this mindset which led to his success, the success of his airline and the success of his employees. As was espoused throughout his tenure and in the years after his retirement, if you wanted to be an airline executive, train at American Airlines under Bob Crandall.

In a way only Crandall could put it, he emphasized: "If you're not the lead dog, the view never changes."

Registration for TravelConnect 2019 is now open! Join us October 3–4, 2019, at the Lansdowne Resort and Spa in Leesburg, VA, just a few minutes outside Washington, D.C. To register or for more information about the 2019 conference, click here.

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About the author

Peter Kane is a senior manager of marketing programs at ARC. A resident of Portland, Oregon, Peter is a passionate Manchester United fan and enjoys hiking in the Pacific Northwest during his free time.


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