In a way, Richard Anderson owes his new job as CEO of Delta Air Lines, the USA's No. 3 airline, to his 20-year-old daughter.
Had that daughter, Katy, never been conceived, Anderson might still be a prosecutor in Houston. But she was, and her expectant mother, Sue Anderson, then a civil attorney at a large Houston law firm, wanted to give up her practice to raise a family.
"So, I had to get a better-paying job," Anderson recalled in a recent interview at Delta dal headquarters here. Then 32, he walked in cold into Continental Airlines' Houston headquarters and was hired for a bottom-of-the-ladder opening on the legal staff. He didn't know anything about airlines.
Now 52, Anderson leads a major international carrier with bold plans for expansion. Last week, Delta announced both its best quarterly results in years and a ground-breaking agreement with Air France that will give Delta a potentially lucrative foothold at London Heathrow airport while vastly expanding trans-Atlantic travel options for customers of both airlines.
Delta directors last summer hired Anderson, former CEO at Eagan, Minn.-based Northwest nwa Airlines, to succeed Gerald Grinstein, who retired after guiding Delta through a 19-month restructuring in Chapter 11. The Delta board passed over two internal candidates.
From Pan Am's sophisticated founder Juan Trippe to Southwest's luv long-time chairman and funnyman Herb Kelleher, airlines have been magnets for outsize CEO personalities. Even Delta's personally conservative, understated founder, C.E. Woolman — whose old executive desk Anderson uses in hopes that "some of his vibe rubs off on me" — came to be viewed as the "Delta Family's" almost saintly patriarch. But Anderson never has fit the mold of flamboyant, outspoken, larger-than-life airline chieftain.
"I was just going to be a prosecutor forever," Anderson says rather sheepishly. "I was pretty naive."
The son of hard-working parents who both died of cancer while he was in college, he never really had time as a young man to plot any career path, much less one that would put him in the top jobs at two major U.S. airlines. He focused on more immediate matters: raising his two younger sisters, working full time and finishing his education.
Anderson still takes a bit of pride in calling himself "B.O.I.," a Texas term meaning "Born On the Island." It's a designation reserved for the mostly working-class year-round inhabitants of Galveston, differentiating them from well-to-do mainlanders who spend part of the year there.
His father, Hale, was an office worker for the Atchison Topeka and Santa Fe Railway. His mother, Frances, worked as a medical receptionist and typist. His Italian grandmother, Mariana Faustina Biagini, lived with the family for years to help with the cooking and child-rearing. Richard was the only boy, sandwiched between two older and two younger sisters. A fifth sister, Patty, died of brain cancer at age 7.
The family moved from Galveston to Dallas with the railroad when Richard was in the 5th grade. They moved to Amarillo when he was in high school.
Anderson was so close to his parents and sisters that he chose to attend Texas Tech University in Lubbock, the closest big state university to the family's home in Amarillo.
"Back then, I thought kids went to places like Yale and Harvard because those schools were close to where they lived," he says. "I really enjoyed my time there, but I missed my family a lot."
So it was devastating for Anderson when he got a call at school in the spring of his freshman year telling him that his mother was dying of cancer. Weeks later, word came that his father, too, had cancer. His grandmother also was dying, from heart failure.
Anderson finished the school year and went home to Amarillo, in effect, to watch his parents and grandmother die. His father died first, and Anderson's mother moved the family to Texas City, a gritty town along the Houston Ship Channel near Galveston. In a short time, his mother and grandmother were dead.
With his older sisters, Carolyn and Francie, married and living elsewhere, it fell to Richard, at age 19, to take responsibility for raising his other sisters, Joan, five years younger and Laura, seven years younger.
"It was not easy," he says now. "But it did slow down the beer drinking" of the boy who had been a carefree college freshman.
"Other people have had tougher things to overcome in their lives, but we did have some real challenges," Anderson says. "You just do what you have to do."
To complete his undergraduate studies, Anderson enrolled at a University of Houston satellite campus. To keep things together financially for himself and younger sisters, he also worked part-time as a plumber's assistant for one uncle, and in construction for another. Then he landed a full-time job as executive assistant to Houston's district attorney.
John Holmes, who won election to that office not long after Anderson was hired, quickly took a liking to the young, hard-workingcollege student.
"One of the things I always admired about Richard was his sense of responsibility," says Holmes, now retired in Bellville, Texas. "To take care of his sisters that way and sacrifice the way he did as a young man says a whole lot about him."
Holmes also appreciated Anderson's ability to laugh and enjoy life despite his tough circumstances.
"He never felt sorry for himself or complained."
After graduation from college in 1977 with a political science degree, Anderson enrolled as a night student at the South Texas College of Law. After earning his law degree in 1982, Anderson moved from DA's assistant to Holmes' team of about 225 prosecutors. His first case: prosecuting a man for fishing without a license. But he progressed to major felony cases.
While Anderson's first job at Continental cal represented a big pay raise, it wasn't glamorous. He handled mostly the grunt work.
But in November 1987, something happened that would set him on a course for airline management stardom. Continental Flight 1713, a McDonnell Douglas ba DC-9, crashed on takeoff at Denver, killing 28 of the 82 people onboard. The legal staff quickly gathered, and Anderson's boss asked, "Who did we send to the crash investigation seminar this summer?" Anderson raised his hand.
Days after his daughter's birth, Anderson was dispatched to Denver to serve as Continental's legal representative at the crash site. He also represented the airline in the crash investigation of the National Transportation Safety Board.
He worked in the aftermath of the crash to understand the complexities of flight, aircraft maintenance and human performance issues so he could properly defend the airline. As he did so, Anderson was gaining an invaluable education that would drive his career to unexpected heights.
In 1990, Ben Hirst, who had hired him at Continental before leaving to become general counsel at Northwest, asked Anderson to join him as deputy general counsel at the Minnesota-based carrier.
But it wasn't his legal acumen that put Anderson on the fast track at Northwest. It was his unusually deep understanding of technical matters, his intellect, and his ability to motivate co-workers, says Northwest's then-president, John Dasburg. "Richard has a hands-on, roll-up-your-sleeves, let-me-see-how-this-thing-really-works kind of approach," says Dasburg, now CEO at Astar Air Cargo.
Dasburg, who eventually rose to CEO, put Anderson in charge of Northwest's labor relations, then maintenance and technical operations. And he kept giving Anderson more responsibility until he became executive vice president and chief operating officer in 1998.
Three years later, in early 2001, when Dasburg left to lead a turnaround at Burger King, bkc he recommended Anderson as his replacement there.
At 46, a guy who'd never planned on being anything other than a prosecutor was running an airline. The timing, though, wasn't great.
The U.S. economy was sliding toward recession. The airline industry, burdened by expensive labor deals signed during years of record profits in the late 1990s, was beginning to buckle under the financial pressure. Then came the Sept.11 terror attacks. A serious industry downturn turned into a near-death experience for Northwest and for the industry.
Dave Stevens,head of the Air Line Pilots Association unit at Northwest, was a union board member during Anderson's years there. Anderson got "excellent operating experience" there, and was viewed as being employee-friendly, he says. "But he doesn't always show his true agenda. If the Delta employees think that they will be his first priority, they are mistaken. He can be very engaging, warm, disarming even. … That's why you've got to pay attention."
Anderson stayed in the top job for three years before accepting an executive job — and a huge compensation package — at Minneapolis-based insurer UnitedHealth Group unh. By the time he left, he was earning $4.3 million a year and was the heir-apparent to CEO Steve Hemsley.
Last spring, Delta's largest creditors, seeking someone with significant airline experience to monitor the company's management after it emerged from bankruptcy, asked him to serve on the board.
There was no hint, he says, that he might be asked to replace the retiring Grinstein. But in August, the new Delta board, impressed with their fellow member's expertise, prevailed upon him to take the job.
Anderson decided to return to the airline industry, despite a pay cut to about $1.5 million annually in salary and bonus. Anderson potentially could earn as much as $15 million in three years from Delta if a special incentive package created to partially offset the pay cut he took pays out fully. He could have earned several times that had he stayed at UnitedHealth.
Anderson says the attraction of returning to the industry is the "intellectual challenge of trying to make an important, long-lasting change in how … airlines are managed." Specifically, he says, Delta is positioned to show that airlines need not be vulnerable to the cyclical swings that have marked the industry's history.
At Northwest, he was deeply involved in industry efforts to influence government policy and in representing his company publicly, and he expects the same at Delta.
But he shuns the social aspects of being an airline CEO. "I'd rather read a book or watch a game" than attend such gatherings, he says.
Besides, because he typically logs up to 70 hours a week at work, Anderson says he mostly just wants to spend time with his wife and two children. He also tries to spend time each year with all his sisters, with whom he remains very close, and other extended family members and a few close friends outside the airline industry. Anderson declined to make a close family member available to talk about him for this story.
Dasburg, his old boss at Northwest, says Anderson's easy-going personality, calm management style and Southern roots should make him a good fit for Delta.
Says Dasburg: "Richard's a CEO from his head to his toes. But he's also a gentleman and a truly nice guy. He can be the CEO, and be in command, and still not make those around him feel uncomfortable. That's a rare and valuable trait."
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