Chief Executive Officer of American Airlines Group Inc. Robert Isom fired the airline’s chief commercial officer after a critical Bain & Co. report. on a controversial new marketing system that has alienated corporate clients, according to a person familiar with the matter.
Isom was asked to fire Vasu Raju within the last few days following a report the American commissioned from Bain. That highlighted corporate travel consultants’ concerns about a recent change in the airline’s sales strategy that contributed to lower earnings over the past few quarters, a source said Wednesday.
Raja could not be reached for comment. American announced its departure late Tuesday and also cut its earnings forecast, 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,” was aimed at driving customers away from booking agencies in favor of shopping directly through American. As part of the transition, the airline’s sales department was reduced.
But the shift has angered some corporate clients and travel management firms, and Raja recently acknowledged that its growth in managed corporate travel is lagging behind that of its rival United Airlines Holdings Inc. and Delta Air Lines Inc.