North American carriers, with Continental Airlines and Air Canada leading the way, are keeping up efforts to reduce management headcount as they continue to cut labour costs across the board.
The first six months of 2003 has seen a further net reduction in senior level executives at the major carriers, on top of departures seen in 2002, says Michael Bell from the Miami office of executive search firm Spencer Stuart.
The latest to announce major cuts is Air Canada. As part of its sweeping reorganisation efforts, it is axing a management layer with three senior vice-presidents and one vice-president going.
Among those to depart are Ross MacCormack - one of the architects of the Star Alliance - and Doug Port, senior vice-presidents of international & alliances and customer service respectively. Both will retire.
Continental made its wholesale changes earlier this year, with the departure of four senior vice-presidents and chief operating officer CD McLean announced on the same day. The action of both carriers to announce the cuts together was to send a strong signal to the market of their cost-cutting intentions, says Bell.
At both carriers the responsibilities of the departed executives were assumed by others from within, with no external appointments, he says.
Elsewhere, there have been significant executive level changes at United Airlines and US Airways, as their chief executives Glenn Tilton and David Siegel shape their preferred top teams. Many of the changes at American have been internal promotions, following the carrier's traditional method of promoting from within.
One of the results of these changes is that there is "a significant pool of highly experienced but not-yet-ready-to-retire executives coming onto the market," says Bell. This creates opportunities for smaller carriers to pick up good managers, he notes.
Another trend Bell sees is the willingness of executives at some carriers to listen to new offers. "Fewer officer positions means some of the younger guys underneath the top management levels feel their progress has become more blocked, and they are more open to opportunities on the outside."
MARK PILLING LONDON
Source: Airline Business
