American Airlines Group Inc. CEO Robert Isom fired the carrier’s sales chief following a critical Bain & Co. report on a controversial new marketing scheme that alienated corporate customers, according to a person familiar with the matter .
Isom was prompted to fire Vasu Raja in recent days after the report American commissioned from Bain. It revealed corporate travel advisors’ concerns about a recent change in the airline’s business strategy, which contributed to lagging revenue in recent quarters, the person said Wednesday.
Raja could not be reached for comment. American announced his departure late Tuesday and also cut its earnings outlook, sending its shares down 14% the next day — the biggest drop in nearly four years.
The new system overseen by the CCO, dubbed “modern retail,” sought to move customers away from reservation agencies in favor of direct purchases through American. The airline’s commercial service has been reduced as part of this change.
But the move has angered some corporate clients and travel management companies, and Raja recently admitted that its growth in managed corporate travel volumes was lower than that of its competitors. United Airlines Holdings Inc. and Delta Airlines Inc.
