DEFINITION of Robert Crandall
Robert Crandall is a former president, CEO and chairman of AMR Corporation, the holding company for American Airlines, from 1985 to 1998. Crandall is known both for his executive leadership and for his innovations, including a computer reservation system for travel agents that revolutionized the industry.
BREAKING DOWN Robert Crandall
Born in 1935 during the Great Depression in Westerly, Rhode Island, Robert Crandall attended 13 high schools before graduation as the family moved a lot to follow his father’s career in life insurance. Upon graduation, Crandall attended the University of Rhode Island and eventually earned his MBA from the Wharton School at the University of Pennsylvania.
Crandall began his career with Eastman Kodak in 1960 as a credit supervisor and later worked for Hallmark, Trans World Airlines, and Bloomingdales before joining American Airlines in 1973 as its senior vice president of finance. In 1985, Crandall took over the company as President and CEO of AMR, the holding company which owned American Airlines. While in that position, Crandall developed a reputation as a legendary leader with maverick-style positions regarding the company and in general on issues that affect the industry as a whole.
The first of these was his opposition to the Airline Deregulation Act of 1978, which Crandall believed would drive down the quality of experience for US customers throughout the US airline system. The second was his bearish attitude on the value of US airlines stock prices, and he admitted publicly that he didn’t believe that airlines were a sound investment, particularly for employees of the company.
'Robert Crandall' and Innovation
Some of the innovations that American introduced under his tenure as president and CEO included cost-cutting measures that went from the common to the sublime, such as his famous decision to place one less olive in a customer’s free salad on in-flight meals, defending his actions by blithely stating that customers would never notice the missing olive and the company would save $40,000 a year on that one less expense.
Crandall also helped oversee the introduction of the SABRE system, a computer automation innovation that eased the process of booking an airline ticket. Previous to SABRE’s implementation, every ticket purchased would require multiple employees to determine whether or not any given seat had already been sold. Crandall's booking system became a key component of American's financial success. The system made it easier to book travel, made last-minute reservations possible and allowed consumers to purchase tickets in advance at a discount, which benefited airlines by improving their cash flow.
Also implemented during Crandall’s tenure with the company was AAdvantage, the industry’s first frequent flyer program and a model for those companies and programs that came later after it.
In an interview in 2010, Crandall was able to point out that the industry had dealt with increased turbulence as a result of deregulation, by pointing out how every major carrier except American had filed for bankruptcy at least once. American Airlines ultimately did file for bankruptcy in 2011 and later underwent restructuring later in a merger with US Air in 2015.
Today, Crandall sits on the board of AirCell, a company which was awarded the contract for bringing a broadband signal to in-flight passengers and crew. He is the winner of the Horatio Alger Award and also is featured in the Hall of Honor at the Conrad Hilton college.