Can new Delta CEO Ed Bastian continue the airline’s success?
Last February, when Richard Anderson announced his retirement after almost nine years as CEO of Delta Air Lines, Atlanta’s movers and shakers sang his praises for lifting Georgia’s largest employer out of bankruptcy toward record profits and for ensuring that the Fortune 100 company remained in its hometown.
“When the story of Atlanta is written, [Richard Anderson] is going to be one of the most consequential executives in our city,” Mayor Kasim Reed recently told the Atlanta Press Club.
Those words may seem more apt for a eulogy than a retirement. But on May 2 the 61-year-old Anderson will leave of his own accord—a rare occurrence in an industry that lost $54 billion during the aughts. His handpicked successor, company president Ed Bastian, will take over an airline that last year moved an industry-leading 180 million passengers among 327 cities in 57 countries while besting its closest competitors in on-time performance.
The 58-year-old Bastian, a sharply dressed number cruncher with round-rimmed spectacles, couldn’t be taking the reins at a more fortuitous time. In 2015 Delta turned an astounding $5.9 billion profit, the company’s best year ever. Of course that kind of success creates expectations. The Duluth resident, who’s married with four kids, has the unenviable task of filling the shoes of someone who’s been compared to Atlanta corporate titans like Robert Woodruff and Arthur Blank.
“You feel the responsibility, the accountability, the excitement, but also the stress and the pressure of it all,” Bastian says as he sits at the conference table in his spacious second-floor office, which is decorated with model planes and photos of jumbo jets. He acknowledges he’s a different kind of leader from his predecessor. “I’m not going to attempt to follow in Richard’s footsteps. I’ll create my own.”
Born the oldest of nine children in upstate New York, Bastian worked blue-collar jobs before joining international accounting firm Price Waterhouse. His auditing chops soon earned him a partnership, but he wanted to make decisions rather than simply analyze them. After spending much of the 1990s at Pepsi, in 1998 Bastian became corporate controller at Delta, where he headed the company’s accounting practices.
Then came the September 11 terrorist attacks, which rocked the airline industry and sent Delta into a financial tailspin. By late 2004, plagued by rising fuel prices and poor management choices, the company had lost billions. Bastian, then a senior vice president, urged his bosses to file for bankruptcy to save the airline from liquidation. When they wouldn’t listen, he quit in protest.
“The decisions, candidly, were not aligned with the values that this company stood for, and I personally stood for,” Bastian says.
Six months later, following a corporate shake-up, Bastian was persuaded to return to help guide Delta through bankruptcy. After Anderson joined the company in 2007, Bastian continued to work on the financial side, pursuing such innovative strategies as the purchase of an oil refinery as a hedge against rising fuel costs.
Delta hasn’t picked a CEO from within its own ranks since 1987. Bastian’s promotion, then, could be seen as recognition of his role in the company’s resurgence. So it’s easy to see why he wants to keep Delta on the course charted by Anderson. But Bob Mann, president of airline consulting firm R.W. Mann & Co., says Delta can’t remain on autopilot in the face of competition from large airlines like American and United, as well as from smaller discount carriers like Spirit and Frontier.
“Having the number one standing is an achievement; staying there is going to be an even more difficult task,” Mann says.
Nine days after Bastian’s promotion was announced, Delta gave $1.5 billion back to the company’s 80,000 employees—about a fifth of their 2015 wages—in the largest profit-sharing program in history. The airline also recently announced that 1 percent of its net income will fund philanthropic efforts. Bastian is focused on Delta’s international growth as well; the airline recently sought federal approval to offer service to Havana.
“The U.S. marketplace is where the largest share of our business is today, but it’s not going to grow a lot,” Bastian says. “The future is going to be outside those borders.”
Of course, many of those routes lead back to Atlanta, where Delta conducts about 1,000 flights a day at the world’s largest airport hub. One of the new CEO’s first tasks will be executing on Hartsfield-Jackson Atlanta International Airport’s 20-year lease that was renewed this week after a year of negotiations. With the contract signed, Delta will soon begin modernizing its more than 80 gates. Airport general manager Miguel Southwell says Delta’s support is necessary for both entities to thrive.
“As goes Delta, so goes Hartsfield-Jackson,” Southwell says. “And as goes Hartsfield-Jackson, so goes Delta.”
However, if Anderson’s tenure in Atlanta is any indication, Bastian’s legacy won’t hinge solely on what he does at Delta. While he was CEO, Anderson served as chairman of the Metro Atlanta Chamber, led an $80.4 million United Way campaign, and helped Mayor Reed reform the city’s pension fund.
“The expectation that Ed is going to be equally active from day one is unrealistic,” says former mayor Shirley Franklin, who serves on Delta’s board. “Having said that, Ed cares about people. He’s empathic; he’s sensitive to others’ needs. He’ll continue to do that.”
Bastian serves on the board of trustees of the Woodruff Arts Center but is relatively unknown outside of the business world. “I wasn’t actually home a lot,” Bastian says of his tenure as president. “Atlanta will be my main focus point from this point forward.” He’s got at least one pending offer: Reed recently asked Bastian to join the Atlanta Committee for Progress, the group of top executives that advises the mayor on policy issues. The mayor hopes Bastian accepts, because as goes Delta, so goes Atlanta.
Delta’s profit in 2015
Delta’s profit shared with employees in 2015
Ed Bastian’s total compensation in 2014
Total ATL flights in 2015
Total ATL flights by Delta in 2015
Delta employees in Georgia
Delta employees worldwide
A version of this article originally appeared in our May 2016 issue under the headline “Sky Chief.”
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