American Airlines CEO fired top exec after controversial ‘modern retailing’ strategy infuriated corporate clients

American Airlines CEO fired top exec after controversial ‘modern retailing’ strategy infuriated corporate clients

American Airlines Group Inc. Chief Executive Officer Robert Isom dismissed the carrier’s commercial chief in the wake of a critical report from Bain & Co. about a controversial new marketing system that alienated corporate clients, according to a person familiar with the matter. 

Isom was prompted to fire Vasu Raja within the past few days after the report, which American commissioned from Bain. It revealed concerns by corporate travel advisers over a recent shift in the airline’s sales strategy, which contributed to lagging revenue over the past few quarters, the person said Wednesday.

Raja could not be reached for comment. American announced his departure late Tuesday, and also cut its profit outlook, sending its shares down 14% the next day — the biggest drop in nearly four years.

The new system the CCO had overseen, dubbed  “modern retailing,” sought to push customers away from booking agencies in favor of buying directly through American. The airline’s sales department was cut back as part of the switch. 

But the shift angered some corporate clients and travel management firms, and Raja acknowledged recently that its growth in managed corporate travel volumes was trailing that at rivals United Airlines Holdings Inc. and Delta Air Lines Inc.

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