I wasn't comparing AA to Southwest or any other airline or any other company.
You're right to do so would be comparing apples to oranges.
I was comparing AA(Pre 2002) to AA(2010). Smaller company (fewer Indians) same number of executives (same Chiefs). And I'll repeat the same question: How does that make sense?
Oh, where to start....
To draw a parallel, whether you're a local with 200 members or 2500 members, you still need officers, right? How many locals have been closed down in the past 10 years? How many have been consolidated?...
When AA starts closing down entire hubs or divisions that have a VP associated to it, that's when you'll see VP's go away. When STL was de-hubbed in 2003, the hub VP position associated with it was eliminated, and the GM position became a Level 8 MD. In this next round of cuts, the GM position gets reduced to a Level 5 IIRC.
But while AA has cut back their operations, they can't necessarily eliminate functions like marketing, reservations, revenue management, fleet planning, purchasing, accounting, IT, HR, or most other non-operational departments.
They clearly got rid of *people* in those departments, but still need someone to run it and be accountable.
As AA's fleet shrunk, capacity planning (scheduling) lost a bunch positions associated with creating scheduling. They still need a VP of capacity planning as a department head. There's a lot of responsibility associated to balancing the mix of flights with maintenance needs, marketing initiatives, etc. and yes, a VP is warranted for that responsibility.
Revenue management has also reduced the number of market analysts and managers, but they control the pricing. That's where AA's cash flow comes from, and yes, there's a huge amount of responsibility with that, and a VP is warranted for heading up that responsibility.
Close 10 cities, you get rid of ten general managers, and thirty to fifty supervisors. You might get rid of a regional manager as well. But there isn't always a way to get rid of the division VP in that process.
I think you also lost one or two VPs in M&E with MCIE closing down and Romano retiring.
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To be totally fair in the discussion on VP's, you have to look at what AA did prior to 2003.
A week before I started at the ticketing help desk in 1992, there was a management layoff.
First one anyone could recall, and it was brutal. One of the guys in the department had just had a heart attack days before the pink slips showed up, and his manager had to deliver the news to him about his layoff while he was still in his hospital bed...
Every 18 months or so for the next 14 years, there was a round of management reductions/layoffs. During that same timeframe, HDQ shrank from being in CP1, CP2, CP4 and CP5 to just CP4 and CP5.
In 1993, there were three VP's covering what was then Domestic Field Services -- one in NYC (Jerry Jacob), one in BNA (Bill Wallace?), and one in LAX (Joe D'Ambrosio). All those positions got whacked and replaced by a single VP over US/Canada. A lot of manager and analyst/specialist positions got whacked in the process of closing down the Eastern Div office at the Chrysler Building, Central in Nashville, and Western on Sepulveda.
That's just a few examples, but as someone with a ringside seat to all this, when 2003 came around, there honestly wasn't a lot of fat left to cut in HDQ. I won't bother addressing field supervisory management or M&E -- they're slightly different beasts, and few people on the front line believe they need to be supervised...
As an aside, the same holds true for agent and res staffing during those timeframes. The cutbacks in 2003 weren't as severe for res or agents, mainly because management already had the power to slash headcount during the prior decade...
Some of this was simple cost control, but a lot of it was driven just as much by technology...
At the airports, they'd already outsourced baggage service as early as 1994.
Thanks to AA.Com, in the past ten years, just about every City Ticket Office around the country was shuttered, as were Res offices in LAS, RNO, ORF, STL, DAL, SAT, BDL and CVG. I might have even missed one or two...
AA used to have 50 people or so associated with "Tickets By Mail". E-ticketing eliminated the need for that in 1996, and everyone in the department associated with the physical ticketing got whacked.
When kiosks and web check-in made their debut in the late 90's, ATO staffing was slashed, and EGR's helped scale back gate agent staffing to one per departure (used to be two agents per flight, guaranteed), and ACARS and centralized loads pretty much eliminated the need for a dedicated ops agent in outstations...
As telco costs dropped and VOIP started coming into use, local Res offices thru-out Europe and Latin America got closed and were either replaced by small centralized offices (e.g. DUB) or started forwarding calls to the SRO, SWRO and SERO. A few years back, I had to rebook a complex itinerary while in Munich. During the day, I spoke with agent in DUB, and when I called back that night, an agent in DFW finished up the transaction...
Bringing it back to the topic.... I'm sure Res will continue to be decimated as AA.Com grows, but as long as they remain as a corporate function, you're still going to need a VP over that area. Likewise for ramp and passenger service.
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Where I do think there's room for debate is whether or not the person running the department deserves a corporate VP title.
Personally, I think too much emphasis gets placed on the titles. The difference between a MD and a VP is negligible. They both get reserved space travel, the benefits are similar, and frankly, it wouldn't surprise me to find some MD's making as much if not more than VP's in unrelated areas...
