American Airlines Group Inc. Chief Executive Robert Isom fired the airline’s commercial chief following a critical report from Bain & Co. on a controversial new marketing system that alienated corporate customers, according to a person familiar with the matter.
Within days of the release of the report, commissioned by American Airlines and written by Bain & Company, Isom was prompted to fire Vasu Raja. That’s a sign corporate travel advisers are worried about the airline’s recent shift in sales strategy, which has led to revenue lagging in past quarters, the person said Wednesday.
Raja could not be reached for comment. American Airlines announced the departure late Tuesday night and lowered its profit forecast, causing its stock price to fall 14% the next day, the largest drop in nearly four years.
The new system overseen by the CCO, called “Modern Retail,” is designed to nudge customers away from booking agencies and instead buy directly through American. As part of the transformation, the airline’s sales department was cut.
But the shift has angered some corporate clients and travel management companies, with Raja recently acknowledging that growth in managed travel volumes lags behind that of rivals United Airlines Holdings Inc. and Delta Air Lines Inc.).
