If you’ve ever flown tourist class to Calgary from the Arizona-Mexican border (with a Salt Lake City layover), it’s hard to imagine how American Airlines could possibly get any leaner. Or meaner.

Try it. You’ll spend five-plus hours in the sky with only two mini-packs of tooth-busting, salt-swaddled trail mix to gnaw on.

That personal gripe aside, it’s hard not to sympathize with Don Carty, the Montreal-born CEO of the world’s largest commercial airline.

At last week’s Spruce Meadows Round Table, Carty spent two hours addressing the challenges facing the North American airline industry with the kind of forthright candour, and even humour, that’s so scarce in the corporate penthouse.

Larry MacDougal, Business Edge
American Airlines CEO Don Carty favours lean corporate model.

Believe it. Cracking a smile is no easy matter when you’re the leader of a U.S. industry that’s lost $10 billion – and 80,000 jobs – over the last 366 days.

Of course, the industry was a mess even before terrorists hijacked those four jets – two belonging to American Airlines – and created the Sept. 11 devastation now seared into our psyches.

As Carty put it, the business hasn’t made a dime since Orville and Wilbur soared over Kitty Hawk.

Terror attacks aside, it’s a labour-intensive industry at the mercy of fuel prices, high capital costs and an across-the-board trend to reduced corporate travel. Major air carriers have tumbled while adjusting to deregulation and United Airlines looks like the next to fall.

Carty believes one remedy is what he calls “globalization” – international open-skies policies which would benefit every airline with the smarts to compete in a free global
market.

WestJet’s Clive Beddoe straightened Carty out on THAT score. Beddoe said since favourable tax structures allow U.S. airlines to pay 30 per cent less for jet fuel, they’d drive Canadian competitors out of business.

“Until our tax structure is altered to allow us to compete with you, (globalization) would create an unfair playing field,” Beddoe argued.

What sets Carty apart from the run of big-league CEOs – certainly from last year’s Round Table speaker,
ex-Nortel boss John Roth – is the respect he seems to feel for every pilot, flight attendant and telephone-sales clerk in his company’s employ.

Roth spoke of the job cuts after the Nortel fiasco as though 60,000 forsaken employees were so many rusted widgets.

By contrast, Carty spoke movingly to the press about his personal reaction on Sept. 11 and about the grief and regret in the ensuing days.

“A bunch of people who thought they had full-time jobs suddenly had part-time jobs, or no jobs at all.”

AMRCorp., American’s parent company, has cut 16,000 staffers over the past year and American intends to axe 7,000 more jobs by next March.

Carty continued: “Every pilot went home with less money (post-Sept. 11) and our junior management team had hundreds of thousands of dollars in stock options washed out.”

What he didn’t mention is that Carty, who earned $4.5 million US in 2000, voluntarily waived the remainder of his 2001 salary after the attacks.

“Everybody in the company was affected (i.e. emotionally),” he said.

“There’s been a real coming together. Our employee
relations are probably better than they were before 9/11.”

Nor did Carty take the bait when Round Table delegates, such as EnCana Corp. CEO Gwyn Morgan, laid the blame for industry woes at the feet of the unions.

No doubt Carty spoke the truth when he agreed union recalcitrance has caused enormous grief at UAL, where “the lunatics are running the asylum.”

But, he also insisted that a sound and conservative
business plan makes it possible to run a profitable AND
fully unionized carrier.

“We’ve got some spectacular employees who are members of the union,” Carty said.

To prove his point, he cited Southwest Airlines, which
provided the lean, no-frills corporate model so successfully emulated by Calgary-based WestJet.

“Southwest is more unionized than American Airlines, and they pay their employees extremely well,” Carty said.

How does Southwest Airlines perform? Reasonably well, even during the last 12 months.

Last July 18, Southwest announced its 104th successive quarterly dividend and second-quarter earnings of $102.3 million.

During the same quarter, American Airlines’ parent company lost $495 million.

After refusing to make unions the scapegoat, Carty noted the primary difference between American and Southwest is “the way they run their business.

“They’re very much focused on minimizing their costs to minimize the prices paid by the customer,” he said, after vowing to pursue similar strategies.

“They offer low prices and friendly service . . . that’s pretty much all you get.”

Such clear thinking and candid disclosure should be enough to make Donald Carty the MVP of big-league CEOs in anyone’s book.

It also means we better get used to those inedible in-flight snack packs.

They’re with us to stay.