Management Turnover as Change Agent

Monday, April 28, 2008

CEO Watch - Robert Fornaro - AirTran

As the airline industry continues to reel under skyrocketing fuel prices and a weakening economy, AirTran  AAI (NYSE) appears to be another carrier at risk or so might be the company's CEO, Leonard Fornaro.  In a recent Atlanta Journal Constitution article,
AirTran Airways reported a $34.8 million loss during the first quarter as record fuel costs prompted the discount carrier to stomp on the brakes and suspend its growth plans for late 2008 and 2009.
The company's stock performance has been abysmal.  It is possible Leonard, an untraditional airline CEO, might come under pressure with regard to his position despite his recent efforts to sell a number of the firm's airlines to get additional cash.  

According to a USA Today story by Marilyn Adams back in 2004,
Leonard, 60, has been climbing the airline industry's ladder his whole life. Unlike many airline executives who are groomed at Ivy League schools and rise through the elite ranks of finance, Leonard came up through operations — the engines-and-rivets side of the industry.

In previous jobs at Northwest, American and Eastern, he learned the business from the inside. At Eastern, where he was president in its final years, he also learned what happens when costs and labor-management hostility spin out of control. But from watching things go so wrong, Leonard learned how to do many things right.
Airline stock watchers or investors in AirTran should keep a close watch on the company and the moves it makes. It is a difficult time for airlines in general and AirTran will need to walk a tight rope to handle the current situation.

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