Don Carty – plucked defeat from jaws of victory


On the face of it, Sir Richard Branson has made a strange choice of a man to get his stalled plans for Virgin America off the runway.

Don Carty, who has been named non-executive chairman of the US start-up, was the former chief executive of American Airlines forced to resign in 2003 amid uproar over a multi-million dollar executive compensation plan he failed to disclose after negotiating a $1.6 billion rescue package of pay cuts with the unions.
As Business Week commented at the time: “…….Carty’s megablunder is so appalling. …….because of his ineptitude or arrogance……”

He later explained it this way:  “The mistake we made is on the timing of the disclosure of that information and explaining it to the employees. It became public almost coincidental with the vote they all took to accept these very substantial changes to their contract. Letting that coincidence happen has to be the responsibility of management. I’m the CEO, so I’m the most responsible party.”

Sir Richard has planned the new airline for more than three years, funding and a strong management team are in place but has been frustrated by the US regulators who have demanded more information about the business plan and foreign ownership interests before giving its approval.

Carty, a 57 year old Canadian with a lifetime in the airline industry, has been brought in to unblock the blockage.  He will certainly need a more sensitive touch than he showed at American Airlines where he paid the ultimate price for snatching defeat from the jaws of victory.Thanks for reading Big Business.

David Davis


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