By Andrew Cohen
The Gulf War in 1991. The September 11 attacks in 2001. The economic meltdown in 2008. The ongoing COVID-19 pandemic.
For most leaders, including Stephen Johnson ’83, these harrowing events triggered loss, angst, and uncertainty. But for Johnson, it also allowed him to do what he does best: transition from turmoil to innovation in the airline industry.
“In all of those crises, you’re facing something very stressful and frightening at the onset,” said Johnson, American Airlines’ executive vice president of corporate affairs, during a virtual talk to Berkeley Law students on September 15. “But you take a deep breath and dig in. You’ll face difficulties that look existential and daunting in your career, but they can also be great opportunities for change.”
An airline business leader for three decades, Johnson has ample responsibilities: He oversees American’s corporate governance and legal affairs, government and regulatory affairs, labor relations, real estate and airport affairs, and coordination of the airline’s sustainability efforts and business community outreach.
His presentation was part of the Leadership Lunch Series, sponsored by the school’s Berkeley Center for Law and Business, which welcomes general counsel and executives from dynamic organizations throughout the academic year. The talks precede private Q&A sessions hosted by the Berkeley Business Law Journal for current students, faculty, and staff.
“Stephen Johnson is a shining example of the type of leader Berkeley Law looks to produce,” says Adam Sterling ’13, the center’s executive director. “He’s enjoyed tremendous success in both the legal and business worlds, and today he stands at the forefront of the airline industry’s transition through climate change, global unrest, and questions about the purpose of the corporation.”
Making his mark
A member of the center’s executive advisory board, Johnson spent six years as a partner at Indigo Partners LLC — a private equity firm specializing in acquisitions and strategic investments in the airline, air finance, and aerospace industries — before joining American in 2009. During that time, he worked with Indigo’s team to develop Tiger Airways, Spirit Airlines, and Wizz Air.
Johnson also held various leadership positions with America West before its merger with US Airways, served as senior vice president and general counsel at GPA Group PLC, and focused on corporate and aircraft finance and taxation as a Seattle lawyer for Bogle & Gates.
He credits his dual JD-MBA degree at Berkeley Law and UC Berkeley’s Haas School of Business for expanding his horizons — and for giving him a leg up early in his career.
“The JD-MBA program was pretty nascent in those days, and interested in recruiting people,” Johnson recalled. “It turned out to be a great thing for me. I really enjoyed the combination of the two studies … It allowed me to think about what I learned in law school in a different way.”
As a young law firm associate, he delved into tax issues at a time when the Reagan Administration was overhauling the Internal Revenue Code. Johnson combined the practice of tax law and corporate law to steer intriguing business deals from public offerings of apple orchards to financing of airline companies.
Now, he teaches Managing the Legal Environment of Business at Haas, which he says tackles “the legal issues business leaders will inevitably face whether they embark on a career as an entrepreneur, leader of a large public company, or nonprofit endeavor.”
A high-flying career
Johnson, whose work has taken him to more than 100 countries, helped steer an arduous merger with US Airways after American declared bankruptcy in 2011. He also played a key role in helping to launch the aircraft leasing business as it is now practiced, and began cultivating his approach to adverse circumstances during the Gulf War.
“Unfortunately, that created a crisis in the airline industry, finding us at a time when we were over-levered,” Johnson said. “But it opened a big opportunity in my career, resulting in the top layer of our company resigning and my being promoted to general counsel. That allowed me to lead and work on complicated restructuring that resulted in a sale to GE … the foundation of a very extensive aircraft finance business GE built up over time and just recently sold.”
Noting how the airline industry is large, complicated, and highly regulated, Johnson explained how antitrust laws impact competition and efforts to solve collective problems. He also discussed the challenge of reducing airlines’ carbon footprint, and recently guest-lectured in Berkeley Law’s Business in Society course on these and other corporate sustainability topics.
“At the moment and for the foreseeable future, there isn’t an alternative fuel that’s economically viable,” Johnson said. “But as everyone else has decarbonized, there’s been an industry call to arms, a much higher degree of focus, and huge mobilization of resources. It’s going to take the airline industry a while to solve. It will require changing the technology of our airlines, and we’ll probably need to fly less, which will do a near-term disservice to shareholders and our customers. They appreciate freedom and flexibility, but all that increases our emissions.”
“Our capitalism and democracy have some real issues and are showing signs of age,” he added. “We need to change with the times … and be consistent with views of a changing society. I really believe that large companies have an obligation to embrace that change, but more importantly to lead that change.”
The pandemic has sparked widespread shifts throughout the airline industry and society in general. True to form, Johnson sees light where others see darkness.
“For an industry that’s used to various shocks, nothing was like the pandemic,” Johnson said. “But as I reminded our younger management colleagues, from each catastrophe comes opportunities. We needed to think about that to understand that finding our way through COVID was going to save the company and more than 100,000 jobs, but also ultimately take the company to a new place it hasn’t been before. As we find ourselves in something like this, we all look at each other and smile and say, ‘We’re going to make this work.’”