Delta Chief Had Long Climb to Top

ENLARGE

Ed Bastian becomes the airline's new chief executive on Monday. He was instrumental in adding a hub in New York and expanding its international network. Photo: Nicky Loh/Bloomberg News

Susan Carey

Susan Carey

The Wall Street Journal

CANCEL ^[1]
Biography ^[2]
@SusanCareyWSJ ^[3]
Susan.Carey@wsj.com ^[4]

May 1, 2016 8:36 p.m. ET

11 COMMENTS ^[5]

Incoming Delta Air Lines ^[6] Inc. DAL 1.03 % ^[7] Chief Executive Ed Bastian ^[8] ran the New York marathon two years ago after promising he would complete the 26.2-mile race if his airline attained a leading market share in the city.

His path to the top spot has been a marathon as well.

Mr. Bastian, 58 years old, becomes CEO on Monday, 18 years after joining the Atlanta-based company, now the nation's No. 2 by traffic. In that time he has resigned once, helped steer Delta through bankruptcy and helped shepherd its merger with Northwest Airlines Corp.

Delta is in much better shape now. It has a towering market capitalization of $31.5 billion, is profitable, has little debt and leads in operational reliability. Still, it faces hypercompetition and is vulnerable, like other international airlines, to external events such as the recent terrorist attacks around the globe.

Mr. Bastian tries not to keep "an anxiety list" and is focused on building on a string of successes, he said Friday on the shop floor of an engi ne overhaul facility at Delta's maintenance base at Hartsfield-Jackson Atlanta International Airport.

Ed Bastian's Log Book

A new Delta Air Lines CEO takes controls Monday. Mr. Bastian, age 58, has been preparing for the captain's seat for decades

Eldest of nine children raised in Poughkeepsie, N.Y., son of a dentist and hygienist who worked out of a home office.
Attended St. Bonaventure University., studied accounting.
Joined Price Waterhouse as an auditor in 1979.
Worked in international finance at PepsiCo Inc. for six years.
Joined Delta as controller in 1998.
Head of restructuring during Delta's 2005 bankruptcy case.
Passed over for CEO job by new, post-bankruptcy board, which chose former Northwest Airlines chief Richard Anderson as CEO. Stayed and was elevated to Delta president.
Joined Delta board in 2010. Direc tor of Delta partners Aeromexico, Virgin Atlantic, Brazil's GOL.
Succession plan announced in February moves Mr. Anderson to executive chairman and Mr. Bastian to CEO, effective Monday.
Golfer and skier, active in church, purchased a Tesla in April. Wears a tie to work no matter what. Started a weekly employee video called 'Ask Ed Anything.'

Source: Delta, WSJ reporting

The executive joined Delta in 1998 as controller but quit in 2004, upset by the company's approach of using employee concessions to underwrite cheaper fares, he said. The company, with a bloated cost structure and a revenue disadvantage to its peers, had tried to restructure but the effort didn't work.

"I was very vocal," he said. "I didn't agree. I was out of favor in that regard." So he left to take the chief financial officer post at an Atlanta-based lighting firm. He wasn't there long. The new Delta CEO lured him back months later, promising him the post of CFO, vowing to hire someone to attack the revenue problem and to be open to bankruptcy.

After he returned, Mr. Bastian showed the same colors he displayed as a young auditor just out of university at what was then Price Waterhouse. He was auditing the books of a large advertising agency, and found something that didn't look right, he said. He burrowed in and discovered a multi million financial fraud that others had missed.

"It taught me the importance of really understanding the complex issues," he recalls. Partners were fired and he was deposed by the Securities and Exchange Commission. "A lot of people would have been happy if I didn't speak up," he recalled.

That doggedness and intellect brought him to the attention of higher-ups, and Mr. Bastian was made a partner there at the age of 32. He subsequently worked in finance at PepsiCo ^[9] Inc. PEP 0.31 % ^[10]'s Frito-Lay unit for six years before looking around for other jobs.

"I thought the challenges would be much more sizable in the airline industry," and he was eager to run his own plays.

The 6-foot, two-inch executive said his return to Delta offered many plays. The company filed for chapter 11 two months later, terminated its pilots' pension plan and cut $5 billion in annual costs. It repelled a hostile takeover bid by US Airways Group Inc. and left court protection in 2007. At that point, the creditors selected a new board.

Mr. Bastian and another Delta executive were the then-CEO's two top choices to succeed him. But the new board decided to widen the search and seized on Richard Anderson ^[11], a former Northwest Airlines CEO and new board member. The other executive departed, but Mr. Anderson asked Mr. Bastian to stay and become president, a new role.

Mr. Anderson's selection "was not a big disappointment," Mr. Bastian said, because he "was a lot more qualified." For the next nine years, they worked as a team and "there was never a rivalry between us," Mr. Bastian said.

He and Mr. Anderson negotiated the 2008 acquisition of Northwest. Since then, they have expanded Delta's international network, created hubs in New York and Seattle, drastically improved the company's operational reliability and returned billions of dollars to shareholders.

When Mr. Bastian steps into his new job, Mr. Anderson, who turns 61 on Monday, will become executive chairman. The new CEO said there isn't an immediate crisis to focus on. "When things are going well, we actually get a little uncomfortable," he said. But he thinks he is ready. " I do like a challenge," he said. "I have a competitive streak in me."

After Delta purchased a 49% stake in Virgin Atlantic Airways Ltd. in late 2013, Messrs. Anderson and Bastian went to Necker Island, a Caribbean isle owned by Richard Branson ^[12], who holds a 51% stake in the U.K. airline. Mr. Bastian and Virgin Atlantic's new CEO, Craig Kreeger, played a four-man basketball game with two young Virgin Atlantic executives. "Ed and I were a pretty good team," Mr. Kreeger said. "The two old guys who could barely move managed to get the ball into the hoop often enough to win."

Sometimes Mr. Bastian competes against himself. In 2008, he told his team he would run the New York marathon if the airline met its goals in that city. "Sure enough, in 2013, we hit it," he said. So he hired a coach and started running. An avid golfer and skier, Mr. Bastian said he found the training "hard but manageable."

Weather for the 2014 marathon was cold and windy and he said he doubts he would ever do it again. But he raised $400,000 for one of his favorite charities. Perhaps even better, Mr. Bastian said: "I beat Tiki Barber," the former New York Giants running back.

Write to Susan Carey at susan.carey@wsj.com ^[13]