A Huge Strategic Opportunity American Airlines Isn’t Going to Take

American Airlines has had operational reliability problems and customer service problems and profitability problems. They’ve managed to make shareholders, employees, and customers all unhappy. Doubling down is their current strategy but doesn’t make sense.

We know that American Airlines is going to offer free inflight wifi once Delta does. They don’t want to, they prefer to charge, but competitive pressues will force them to and they’ll respond once Delta makes good on its free wifi promise.

American promised free inflight texting and then didn’t do it. They haven’t been out in front of customer innovations, and don’t even always lead from behind.

However they have a huge opportunity. Delta has delayed its rollout of free wifi due to technology challenges. JetBlue offers free wifi with provider ViaSat. During Delta’s tests their Gogo systems have been unable to handle the traffic volumes.


Gogo Boeing 737 Jimmy Ray

Delta CEO Ed Bastian told Skift‘s Brian Sumers that they “are working hard with Gogo on the technical features” to deliver a product customers expect even when it’s free, but with the usage levels when more passengers are logging in, with more devices, and streaming they aren’t yet able to deliver that.

American Airlines has more ViaSat installations than Gogo satellite installs. They could get a head start on free wifi. They’re going to do it anyway eventually, they could lead in the space among the major airlines.

United Airlines says they’re looking at offering wifi free, too but their current installs can’t support a reasonable customer experience even with high fees and unaccompanying low usage. United’s President Scott Kirby says they’re getting fewer refund requests for wifi, which when that’s the metric you know there’s a problem.


American Airlines

With more satellite internet installs than any other airline, even if they had to throttle speeds on legacy US Airways 2Ku planes, they could grab the mantle of being the digital airline by getting out in front of Delta’s free wifi delays.

Based on past conversations with American executives who have briefed me on their connectivity plans, it seems unlikely to me that they’ll seize the opportunity of a Delta delay.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Are you really surprised? They will wait once again for Delta to do something and then they will copy. It’s incredible how bloggers rag on Delta and both United and American end up copying mostly everything Delta does.

  2. ” United’s President Scott Kirby says they’re getting fewer refund requests for wifi”

    Probably less to do with the Wi-fi quality improving and more with people tired of sending refund requests knowing they’ll get a “LOLOL how about no” response.

  3. Gary, I wish you could teach American Airlines how to become the thought leader in providing excellent customer service starting with complimentary broadband speed aircraft Wi-Fi.

  4. Being a first-mover isn’t a “strategic opportunity” in that it provides no sustainable competitive advantage. Once everyone else catches up and the industry playing field equilibrates, this move would be instantly forgotten. It would still be a good move since being digital will be table stakes in the near future, but just pointing this out.

  5. @CW I think it’s less about whether there would be a long-term advantage in product. As you mention, the domestic airlines will all ultimately find an equilibrium where the same basic service is provided. I think for AA in particular, this is more about rehabilitating their brand. They have experienced a lot of negative press over densification and overall bad experiences. Getting out in front of something with obvious appeal to customers would be a marketing strategy to recover some of that “going for great.”

  6. FYI AA it seems no longer allows you to buy a Gogo pass in advance, forcing you to buy internet in flight at whatever price they want to charge. Seems like they are moving in the opposite direction.

  7. I would like to see AA offer free WiFi to Platium status or higher, you just have to enter your AAdavantage number and password. Now that would be a perk. The masses who fly once or twice a year and don’t understand why they don’t get to sit in first class should have to pay for it! That would be a huge benefit to business travelers.

  8. United is getting fewer refund requests from me because a) I now avoid them and b) if I have to fly them, I know how bad the wi-fi is and avoid it. Not a great metric to use.

  9. American did offer free wifi on all of their ViaSat planes for a while, then moved towards a paid wifi model. While the marketing was more of a transition period rather than a temporary test run, I flew on plenty of AA flights with free wifi.

    I personally didn’t know anyone that chose to fly AA because of it back then. Even now I’ve never met someone irl who goes out of their way to fly JetBlue based on free wifi. Free wifi is something that looks bad not to have when everyone else has it, but doesn’t seem to be something that passengers really want.

    It’s kinda sad, because back when I was at ViaSat, I honestly believed that free wifi on airplanes was going to be a game changer, and once passengers flew on JetBlue, they would really start wondering why no one else was providing free wifi. That really didn’t pan out.

    It’s sad and funny that Delta with their Gogo 2Ku garbage tech might be the first mainline carrier to commit to free wifi.

  10. Who needs Wi-Fi on a plane??? Give me a good TV screen any day so I can relax after a long day/week of work; the last thing I need is to be reachable on a plane.

    Turns out that less than 10% of passengers use paid Wi-Fi on a plane, but I guess 100% of bloggers use it so we keep getting this crazy posts about a service hardly anyone uses. Enough!

  11. As my PSA for the day, I will note that AA does not actually have “operational reliability problems” these days. Since a judge ordered AA mechanics to stop their slowdown earlier in the summer, AA’s operations have been good. Anyone, including Gary, can look at this data (publicly displayed on sites like flightaware) and see this for themselves. With the exception of perennial operations winner Delta, no USA airline is currently running a materially better operation than AA. It’s actually mostly a weather game these days: the daily operations winner is the one whose hubs have the best weather.

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