In a surprising turn of events, former American Airlines Chief Commercial Officer Vasu Raja has secured a lucrative separation deal after his recent departure. Despite losing his executive role, Raja, 47, will enjoy extensive travel perks and a substantial financial package.
Key Highlights of Vasu Raja’s Separation Deal:
- Unlimited Reserved Travel: Raja, along with his spouse or companion and children, will have unlimited reserved travel in any class.
- AAdvantage Executive Platinum Status: This status includes free upgrades, complimentary food and drink, three free checked bags, and a dedicated line for flight changes and reservations.
- Admirals Club Lounge Access: Raja will have unrestricted access to Admirals Club lounges, enhancing his travel experience.
- Financial Compensation: Raja will receive $1.4 million in payments and career transition services.
Career at American Airlines:
Raja joined the predecessor of American Airlines in 2004 as an analyst and worked his way up to the position of Chief Commercial Officer in 2022. His total compensation in 2023 was valued at $12.2 million, which included his salary, cash bonus, stock, and various perquisites.
Future Travel Benefits:
The separation agreement stipulates that in February 2025, Raja will transition to the company’s 65-point travel plan for retirees with at least 10 years of service. This plan allows retirees to fly for free while paying taxes and fees for their tickets.
Company’s Response:
American Airlines announced Raja’s departure in May, with CEO Robert Isom stating the need for a “reset” in the company’s strategy. Feedback from Bain & Co. highlighted issues with a new booking system implemented by Raja, which directed companies away from booking agencies and towards American’s website and app. This move resulted in departmental cuts and dissatisfaction among corporate clients and travel management companies.
Impact on American Airlines:
Following the announcement of Raja’s departure, American Airlines adjusted its profit outlook for the year, leading to a 20% decline in its stock price year-to-date.
