Barreling high-speed through the airport terminal, Bob Crandall is cutting it close, as usual. The head of American Airlines boards the plane just seconds before the door swings shut. “Hey, kiddo,” he rings out to the slightly flummoxed flight attendant and charges down the isle to his favorite seat on the last row of the first-class section, a skinny man in a black suit and an old-fangled frat-row haircut. But he needn’t have hurried: Flight 509 to Los Angeles isn’t budging. Outside, blackish rain has turned the runways at Dallas—Fort Worth International Airport into a monstrous traffic jam. Silver-bodied American jets are backed up to the horizon, burning fuel while they wait for the weather to clear. So there he sits—the tireless, ruthless, brilliant, infuriating, and intimidating airline titan, whose bare-knuckled tactics have made his American the most envied and loathed airline in the world—trapped on a rain-pummeled runway, going nowhere.
He is stuck in more ways than one. American Airlines and its parent company, Fort Worth—based AMR Corporation, have been hemorrhaging money for three years—including a stupendous $935 million last year alone. Incapable of enduring more losses, furious at the unwillingness of the federal government to follow his advice, Crandall is switching course, reversing a decade of nonstop expansion by shrinking the airline: shutting down hubs, selling off planes, firing employees—indeed, changing the very nature of the company. Now he is on his way to Los Angeles to explain his actions to his employees. But how could a man who has staked his career on the philosophy that in order for some to win, others have to lose, admit that this time, winning might not be an option? How could a man who loves to dominate stand before an auditorium of a thousand employees and explain that American Airlines is in a tailspin because of forces entirely beyond his control?
To begin with, Crandall could have passed out copies of an article from that day’s newspaper, which reported that American’s rival, Southwest Airlines, was about to expand into San Jose, California. Even as American was shrinking, Southwest was charging ahead, opening new routes, hiring new workers, and last year, chalking up record profits of $91 million. Unable to compete, American would announce that afternoon that it would slash its own service to San Jose by nearly 40 percent. In a stroke, the gleaming San Jose hub that Crandall had spent $50 million to open five years ago would be abandoned, and with it, any hope Crandall had of making money on the West Coast.
Seemingly invincible just three years ago, American Airlines has become one of the bloated behemoths of corporate America. In vast segments of the domestic market, the airline no longer stands a chance against short-haul rivals like Southwest, Reno Air, and UltrAir. American is not alone: All of the big, full-service carriers are trapped between soaring costs and slackening revenues. In the past four years, U.S. airlines have lost more than $10 billion. Since the summer of 1990, Continental, American West, and Trans World Airlines have all filed for bankruptcy. Three more—Eastern, Midway, and Pan American—ran out of cash and closed up shop. Continental restructured and emerged from bankruptcy in the spring, but now Northwest Airlines is teetering on the verge of bankruptcy. The future of both airlines may depend on the outcome of an antitrust lawsuit against American that is scheduled to be heard in Galveston this summer. Northwest (represented by Joe Jamail) and Continental are claiming that Crandall’s 1992 price-cutting fare war was intended to put them out of business.
But there is no trace of gloominess about Crandall this morning as he whips through his newspapers and stuffs them into a paper sack at his feet. “More of the same,” he says breezily about the San Jose debacle, before hauling out a stack of papers from his briefcase. Even sitting still, Crandall is pumped up, full throttle, ready to pounce. The only hint that anything might be amiss is the appearance of his fingernails, which are almost completely shredded, as if they have gone through a grater. Yet even the condition of his fingernails suggests a high-voltage determination. Crandall does not merely nibble at his nails: He gnaws them all off.
Nearly an hour behind schedule, flight 509 finally stirs to life, taxis onto the runway, and rises through the storm clouds. At that moment, what Crandall really wants is a cigarette. For thirty years, he had been an unrepentant two-pack-a-day smoker. Then last November, after one of his vice presidents had surgery for lung cancer, Crandall quit, and when he did, so did nine of his executives at American. I ask him about his father, who died at age 54 from emphysema. He turns toward the window and the white clouds below. “You’d have to be a moron to keep smoking after you’ve seen someone like that who can hardly breathe, with two oxygen tanks hooked up to his back,” he says, and for a moment silence overtakes him and the only sound is the engine of the MD Super-80 thrumming above the cloud bank. A few seconds later he corrects himself, smiling. “I should never have quit,” he says. “Nobody lives forever—we’re all just ants on a marble.”
To understand how Robert Crandall triumphed over the airline industry—and how the airline industry might very well triumph over him—requires a little education, and Crandall is ready to provide it. Flight 509 has been aloft for an hour, he has plowed through his paperwork, and the flight attendant has refilled, again, his mug of black coffee. “Let me show you something,” he says, and with a Cheshire smile, he seizes my notebook and begins to scribble furiously: circles with little lines poking out of them (hubs and spokes), small boxes connected to bigger boxes (feeder routes), and a series of small arcs and overarching lines (short- and long-haul flights). By the time he is through, he has traversed the industry’s major ailments: soft