American Airlines Former Indian CCO: Airbus A350 Great but Cheap

FORT WORTH- The Indian origin, Vasu Raja, a former Chief Operating Officer (CCO) of American Airlines (AA) shared his story of meeting with Airbus executives on A350s with Brian Sumers, aviation analyst.

American Airlines told Mr Raja to leave the airline in June 2024 after some big decisions didn’t perform well.

Photo: Credits to Its Creator

American Airlines A350 Story

Well, Brian in his paid newsletter wrote that American Airlines’ former vice president Vasu Raja shocked Airbus executives by rejecting a highly discounted A350 deal. Raja’s unconventional approach disrupted the typically formal negotiations between airlines and manufacturers.’

Raja explained his decision using a metaphor: “You are selling a great lawn mower. Actually, you’re giving it away for free. Here is the problem. I live in a high-rise penthouse.”

American Airlines historically maintained a conservative corporate image, once requesting media to avoid publishing photos of executives in casual attire. However, the airline’s culture evolved, allowing Raja to adopt a more direct and colorful communication style.

Despite rejecting the A350 aircraft, American Airlines did acquire an A350 simulator. The airline primarily rented simulator time to competitor Delta Air Lines (DL), indicating a strategic approach to asset utilization even without operating the aircraft type.

This incident recalls a similar cultural misunderstanding in the 1990s when Chinese airline executives mistook Airbus for a bus manufacturer.

During a meeting with Airbus Chief Operating Officer John Leahy, Chinese representatives declined Airbus products, believing they no longer needed buses due to the installation of jetways at their airports.

Vasu Raja | Photo: American Airlines

Why Vasu Raja was Fired?

Brian Sumers after interviewing Vasu Raja reported that he made several mistakes that allowed its rival carriers to take edge over it.

Vasu Raja’s 20-year career at American Airlines culminated in a high-profile role as the company’s chief strategist and commercial leader. Raja gained attention for his bold thinking, aggressive communication style, and distinctive fashion sense.

During his tenure as network planner from 2016 to 2019, Raja proposed ambitious expansion plans to India and Africa. These plans, however, never materialized, marking an early disconnect between vision and execution.

As chief commercial officer, Raja championed digital innovation in ticket distribution. He advocated for direct sales through American’s website, criticizing traditional intermediaries for their outdated technology and commission-based model.

Raja also spearheaded a controversial strategy focusing on fierce competition in select markets while maintaining a less premium product compared to rivals Delta and United Airlines (UA). This approach contrasted sharply with competitors’ emphasis on product differentiation and long-haul route expansion.

American Airlines pursued a commodity-based approach for short-haul flights under Raja’s leadership. This strategy diverged from industry trends towards premium offerings and global network growth.

The airline’s financial performance lagged behind Delta and United during Raja’s tenure, leading to his eventual departure. A lucrative exit agreement prevents Raja from disclosing specific details about his time at American or directly criticizing the company.

Raja’s legacy at American Airlines remains complex. His innovative ideas and bold strategies sparked industry debate, but their implementation and outcomes fell short of expectations.

So what’s next for Raja? He now intends to begin his second innings with another airline or aviation company.

What are your thoughts on Executives like Vasu Raja? Should they speak freely instead of in textbook language? Let us know in the comments below.

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