American Airlines chief commercial officer makes surprising exit

Vasu Raja, American Airlines’ chief commercial officer, will depart the company in June, the airline said Tuesday.

Word of Raja’s exit comes a week after the airline denied that he was planning to leave the company, amid rumors that he was not present in the airline’s office and had been ousted by a board that was unhappy with American’s revenue strategy.

In a statement to the Airline Observer newsletter last week, an American Airlines spokesperson said that Raja was working remotely “for a few weeks while he takes care of some personal matters,” but was “not leaving.”

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The airline did not elaborate on the reason for Raja’s departure, nor what had changed since last week. It was not clear whether the departure had been decided on since last week, or otherwise.

In a filing with the Securities and Exchange Commission on Tuesday, American also lowered its financial outlook for the second quarter, saying it now expects revenues to decline as much as 6% compared to the same quarter last year. It previously projected a drop of up to 3% compared to last year.

The airline has trailed major competitors Delta and United in recent months as it has struggled to translate new distribution strategies into improved revenue performance. The airline has recently introduced new policies aimed at incentivizing customers to book tickets directly with the airline or with preferred vendors, rather than through various third-party booking platforms and channels.

During the airline’s first-quarter earnings call in April, CEO Robert Isom said that the airline was still “fine-tuning” the strategy, saying that during the first three months of the year there was “likely some benefit that our competitors received because of some of the changes that we’ve made.”

Isom is expected to present at a Bernstein investor conference on Wednesday, along with executives from United Airlines.

United on Tuesday reaffirmed its previous fiscal guidance for the quarter, which projects earnings of $3.75 to $4.25 per share.

It was not immediately clear what Raja’s departure will mean for consumers, although he was the main driver behind the airline’s new distribution strategy. One way or another, industry observers will likely keep a close eye on a potential change of direction for American.