Robert Crandall served as the president, CEO, and chair of AMR Corporation, the holding company for American Airlines, from 1985 to 1998. Crandall is known for his executive leadership and innovations, including a revolutionary computer reservation system for travel agents.
- For more than two decades, Robert Crandall sat as the president, CEO, and chair of AMR Corporation.
- Crandall criticized the Airline Deregulation Act of 1978 as eroding the quality of customer experiences.
- Crandall was instrumental in introducing American Airlines' automated reservation system, Sabre.
- During his time as CEO, the industry's first frequent flyer reward program, AAdvantage, was created.
- Although passionate about the airline industry, Crandall was not equally as passionate about its stock as an investment.
Early Life and Education
Robert Crandall was born in 1935 in Westerly, Rhode Island. His father worked as an insurance as the family moved a lot to follow his father's career in life insurance. After high school, Crandall attended the College of William and Mary before transferring to the University of Rhode Island, where he majored in business.
Robert enrolled in the Army ROTC program during his undergraduate years and then in the Army reserves after graduating with a bachelor's in business administration. After serving in the military for eight years, he received a scholarship to attend the University of Pennsylvania's Wharton School of Business, where he earned his MBA.
Robert Crandall attended 13 high schools before graduating from high school in 1953.
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 at AMR, Crandall earned a reputation of being a legendary leader with maverick-style positions regarding the company and issues that affect the industry.
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 U.S. customers throughout the U.S. airline system. The second was his bearish attitude toward the value of U.S. airlines' stock prices; he admitted publicly that he didn't believe that airlines were a sound investment, particularly for employees of the company.
Some of the changes and innovations Crandall introduced under his tenure as president and CEO included cost-cutting measures that went from the common to the sublime. In addition, he believed the company could save substantially from small changes. For example, his decision to place one less olive in a customer's free salad on in-flight meals saved the company $40,000 a year. He argued that customers would never notice the missing olive, therefore not detracting from their experiences.
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 any given seat had already been sold.
Crandall's booking system became a key component of American Airlines' 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 the industry model for programs implemented thereafter.
Honors and Awards
Crandall served on the board of directors at AirCell, a company which was awarded the contract for bringing a broadband signal to in-flight passengers and crew, from 2003 to 2007. He is the winner of the Horatio Alger Award and also is featured in the Hall of Honor at the Conrad Hilton college.
Why Did Robert Crandall Tell His Employees Not to Buy Airline Stocks?
Crandall believed that the airline industry was a sound investment. He called the airline industry a "nasty, rotten business," that does not make money. As a result, he discouraged his employees from purchasing stock in airline companies.
What Did Robert Crandall Eliminate From Flights to Save American Airlines $40,000?
Robert Crandall found that small changes could result in sizeable savings. He showed how reducing the number of olives in passengers' salads could save the company approximately $40,000.
Does Robert Crandall Own Any Stock in Airlines?
Robert Crandall professed that he never has owned any airline stock and never will because it is not a suitable investment.
The Bottom Line
Robert Crandall is the former CEO, president, and chairman of AMR Corporation, the parent company of American Airlines. Under his leadership, he introduced strategies to save money, boost business, and simplify processes. Some of his innovations changed the landscape of air travel and have been adopted by competitors in the industry.