American Airlines, and in particular current Tempe management, is known in the industry for being ‘penny wise and pound foolish.’ The CEO even has a nickname that stems from this first part.
They spend lavishly on aircraft, investing in foreign airlines, and a new corporate headquarters (now supported with $10 billion in taxpayer cash over the last 18 months) while taking short cuts on employee pay and customer experience. And it winds up costing them more money in the long run.
American found ways to keep government money for ‘payroll’ while not paying employees and laying off management staff. They didn’t use government payroll funds to ‘keep employees ready to fly when customers returned’ they simply sent checks and grounded pilots, who weren’t ready to fly when the carrier brought back its schedule this summer, leading to mass cancellations.
One pilot writes me to share that the pilot crisis isn’t over, that most pilots on reserve are covering trips each day because the airline doesn’t have enough crew assigned to operate schedules. Yet when pilots volunteer on their off days to pick up trips because reserve pilots aren’t able to cover the demand, the airline breaks up existing trips into pieces to use reserves (rather than pay pilots a premium to work) and kick the can of the back end of those trips down the road hoping to have enough reserves to cover them later.
It would be one thing if this actually saved money, but they wind up paying out those premium trips anyway. And that seems to be the pattern that repeats across the airline.
They cut first class meal service to align with US Airways standards, and had to bring back meals. They thought they could get away with not putting power into old US Airways planes, before realizing they had no choice. At US Airways they even stalled on adding internet until they literally saw it was costing them ticket sales.
But is there any better example than what they’ve done to their Boeing 737s, the backbone of the American Airlines domestic fleet?
- When Tempe management took over these planes flew up to 150 passengers. They quickly reconfigured to 160 (which meant paying for an extra flight attendant). They went out and found thinner seats and smaller lavatories and squeezed them closer together and managed 172 seats.
- So they took out seatback video. The coach experience isn’t so good. But there’s also fewer extra legroom coach seats to sell, so you’re picking up more marginal passengers at the lowest fares and offering fewer opportunities to upsell them.
- And the first class cabin turned out to be the biggest downgrade, not just less space and less padded seats, but the bulkhead seats were terrible and the seats didn’t even have a tray to hold drinks any longer or a holder for tablets (needed after getting rid of screens). Most importantly, half the seats no longer had under seat storage for carry on bags because of how the seats were bolted to the floor.
- How did this happen? Chief Operating Officer David Seymour says instead of building a cabin mockup to actually see what would become the new standard domestic product for the airline they saved money by “taping it out.” And the whole thing was a disaster.
- American finally realized their best customers were refusing to pay for the first class product, so they had to retrofit first class again, after retrofitting each 737. The Oasis modifications required a “Kodiak” modification. And they were actually installing the Oasis first class seats on 737s that hadn’t been modified yet before ripping out those same seats and doing the second modification.
- Meanwhile when competitors announced free inflight messaging, American announced this too. Then decided not to make the investment (but never retracted its public announcement). And in the end introduced it anyway.
The whole thing wound up losing them money (premium sales) and costing more than if they’d done it right from the start. And after pulling TVs out of all the 737s? United has now committed to TVs at every seat on its domestic fleet, matching Delta, so American may be forced to retrofit again.
Instead of offering a positive vision for a product customers want to fly – an airline with higher costs than many competitors needs to earn a revenue premium – they’ve watched what other airlines have done, and reacted. That costs more and generates less value for the company in the process.
Why is Doug Parker not fired?
Excellent question.
Maybe the Board of Directors is asleep at the switch.
Or else Parker is holding something over their heads ??
In answer to Mike, because he maneuvered himself to be Chairman and CEO, so there is no Board presence to kick him to the curb. I am voting for Akbar Al baker for Chairman of AA, and better yet, the owner. We’d all be a lot better off.
That said, why does AA demonstrate such continued incompetence when it comes to actually running an airline? Clearly Parker isn’t stupid, n.b., he’s still there. But please remember these folk, Parker et al, are corporate engineers. They know how to roll up companies, talk the government into picking up AA pensions, etc, buy back share to pimp their compensation — BUT, they (clearly) don’t know how to run an airline. It will take a major shareholder revolt to turn things around at AA.
I am a long time fan and some time apologist for AA. They are my home town airline (Tempe, back to America West in the 80s) but I have to say they have about worn me out. I am looking for options, which ain’t easy as most of my travel is international.
Gary
Didn’t you write about this like three or four times already or maybe five or six ??
What elsewhere is new?
Doug Parker is American Airlines problem. If there was no merger or Tom Horton stayed on , AA would be a class leader and the pilots wouldn’t be any more or less pissed off then they always are. DP destroyed a great brand, a great American brand wearing the American Eagle. What am F-ing shame
Not much to write considering after all the mergers and acquisitions this was inevitable. Is there any leadership in America? Anywhere? any takers? I could run the airline better. It’s infuriating that stimulus money was wasted with no one held accountable.
Passenger experience has not been a priority, particularly for domestic. International and transcontinental premium service is decent (or at least was pre-COVID) but for those of us that fly lots of mid-cons, the hard product is poor and in-flight service is wildly inconsistent. Fortunately I’m not hub captive, so I have options, which lately means DL. As a longtime EXP, I do hope AA eventually gets it together, but I don’t thing that happens while DP is in charge.
I suggest a change in executive leadership coupled with clawing back any (and it’s a lot) money made from exercising stock options.
Obviously delta paid for this article. Cuz its same.nonsense written over and over. Getting old. Geta life
@ryby…Gary trashes American at least three times a week. It almost seems like a vendetta. I often wonder what they did to him as his venom is way disproportionately spewed toward them.
American has its issues to be sure. But so do United and Delta. Yet the ratio of attack postings against American is very onesided.
Sure, Gary criticizes AA a lot, but come on, AA ***DOES*** suck. For various reasons, I have to alternate between Delta and AA, and Delta is better. Every. Single. Time.
…and I say with absolute sincerity that I wish with all my heart AA were better because they are a much more convenient airline for me to fly.
Exec Platinum here sorely tempted by Delta’s Medallion status challenge. If only the routes I needed were more in line. AA has become the Air Chiba for US domestic travel. Congrats, I guess.
A nice analysis of American’s dysfunctional management. The board keeping Parker is the real head scratcher. They could install competent and responsive management but choose not to do so. While Parker seems a decent guy in private life, if he hasn’t figured out how to run a giant international airline in a capable fashion by now then he’s not going to any time soon.
Gary criticizes AA more because he flies them more.
Have lots of free mikes. Only reason I fly them
@Tom K from Seattle – I cover American Airlines a lot. It’s not my fault that they’ve been doing one thing after another that’s bad for customers, though I point out when they do something positive.
I used to fly AA all the time.
Now I fly Southwest exclusively. Low fares, good service, love the sit anywhere. Not fancy, but a great job of getting me where I need to be. Their employees are fantastic.
@PHILLIP – If you’re going to call it ‘nonsense’ then maybe offer a reason why?
As for the notion that I’m somehow in the tank for Delta, my goodness, I am literally the person who coined the term ‘SkyPesos’ 12 years ago.
They also went cheap by removing the inflight magazine…..1 more touchpoint for the customer that they eliminated.
I flew American a few weeks ago to see my grandchildren. The first flight was AUS to CLT. The flight attendant was amazing! She asked everyone in first class their name and at the end of the flight she gave me a card with my connecting gate with a hand written note that said thank you for flying. I was SO impressed. I walked off the plane thinking that girl was amazing. Fast forward 5 hrs to my flight from CLT to ERI. It was a red eye flight that was delayed. Everyone was tired, we were boarding a smaller plane. I have never experienced anything like these 2 flight attendants. I asked one if she knew the eta into Erie since we were delayed. She called me honey or sweetie (I’m 48 yrs old) and pretty much told me when she knows, I will know..and the pilot will announce it on the intercom. She then proceeded to storm back to the intercom and repeat what she had just screamed to me so she would not have to answer that question again. I never did get the eta. We made it. I had to wait for a ride, I lived.
Overhead lights were on full blast for 1 hr 30min red eye flight..except for the last 15 min, when #1 turned all the lights out on accident. ..and proceeded to apologize to flight attendant #2 who told her to keep them off and got out her flashlight. I don’t even think the running lights were on in the isles. We landed and were at the gate and I think someone behind me stood up before they were supposed too. The attendant in front of me screamed, SIT.DOWN.NOW. I understand that they have a hard job, with people not wanting to keep their masks on, put their phones away or just listen
in general..However, these 2 flight attendants should not have been working on that flight. Clearly, they were both over it and could have cared less about the 50+ souls on board. The pilot was coming out of the cockpit as I was exiting the plane. I made the mistake of telling him that his flight attendants were terrible (scary, really). #1 heard me, I could almost feel the breeze as she spun around (she was about 2 rows back walking the other way) and started screaming, YOU WILL NOT TALK TO ME LIKE THAT and proceeded to keep screaming. I literally just looked at her and looked at the pilot and said, “See?”. I felt like I was being punked. Everyone has a bad day, a long day, sometimes..but wow. That is all I have to say about that. Except that I literally peeked around the corner before stepping on the return flight home, praying that I did not see this flight attendants face.
Gary is rehashing past decisions once again. We have them memorized by now. But the comments prove that AA is valuable. “They are convenient”. Actually, the scheduling and the pricing make trips on AA so much easier than DL.
Regrettably AA is linked to AK Air. So we are sometime forced to fly them. When we can we take BA or any Foreign partner. AA has accepted being inferior and has gone for schedule and price to compete. They gave up on competing with other US low cost airlines. I will pay a bit more and fly at odd times to avoid AA . I am not alone. Shame, short term gain sacrifices for longer term losses
I’ll just repeat what others have said (as I need to let it out): why TF is Parker still in his job? What is wrong with the board? I hate flying AA domestically. Internationally they are no better/no worse than UA (my only comparison from last month). In 2 days I’ll be flying Air Canada internationally. I look forward to the comparison.
How does Parker keep his job? Fire Parker!
There’s a reason he critizes AA. My first class seating retrofit did NOT prevent them from charging for approvedb carry-on pet carrier that did not fit under the seat. Even though it was smaller than average. Then they moved me to the back to economy where the under seat had a bit more space. Still didn’t fit but wouldn’t give me back my front First class seat. I did not even both asking for a refund because I decided to use other airlines. Fire that $%^&*#@.
Parker should have been fired 5 years ago after screwing his employees and retirees.
I’m never gonna be CK so I’m not worth that much to AA but I think I’m finally ready to move to UA with the new year. Star Alliance is better, they’re improving thier product and living in Chicago I have a choice. The changes to the contract of carriage by AA recently really made me think it’s time to go.. I went AWA – US – AA but I think now it’s time to go.
The big guy gotta go! They make stupid decisions. As a 3MM miler. I can’t get over their decision re business class on the oh original 787.
The last row (backwards) was actually 30% in the galley. And on top of the waist cart. I doubt anyone who made this decision had ever flown. Get some experienced decision makers.
What do you expect from formerly USworst Airways?
The Advantage points are only suitable to fly open borders folks. They are desperation flyers
AA Advantage is useless otherwise.
Not long ago it was United (the bad guy). Now American but everyone wants to fly United. Hmmm…
Tom Horton was a lousy CFO and would have made a worse CEO.
His first move when appointed CFO was to cancel AA’s fuel hedges. Right before oil spike to $140/barrel. Realizing his mistake, he instituted it again when oil went down to $70. Oil kept going down to $30.
His two mistakes cost AA over $1 billion and moved the airline much closer to bankruptcy ( perhaps that was his plan all along? ) where he was rewarded by being made CEO.
Personal experience and comment:
Indeed, this is a disaster. CEO DP clearly damaged the image of American Airlines established in 1936. Those people on the west coast probably are more family-oriented with the United. I had a chance to work with Americsn Airlines when JAL made a special prorate for interline tickets. In 1990. The cut-over EDIFACT system mid 990. 1999 March JAL inaugurated the DFW-NRT service with a newly introduced codeshare for both international and domestic flights. It appeared the OneWorld partner was going well with the agreement of PJB, Pacific Joint Business, but American Airline suspended flight 153 from Chicago to Narita Jan 2015. Do they really have an interest operate the Traspac segment? Due to the mechanic labor union dispute, flight 153 had been delayed almost every day, as result Americans lost all the business and transferred to JAL, ANA, or to the United.
Bottom line. They need to replace entire top executive fo bring the traditional American Airlines service.
Once upon a time, there were huge companies that dominated their industries. There was Sears, Kodak, Compaq, K-Mart to name just a few. And then they weren’t.
Companies that grew fat and happy, with management that believed their size and dominance was a barrier to failure. Without the ability to look ahead, to lead, to create, to innovate, those companies and their leadership watched in total bewilderment as newbies surged to the forefront and the empires of the past crumbled like gingerbread houses.
Soon, I predict with confidence that American Airlines will go bankrupt and sold off in parts.
AA management clearly seems to believe passengers are self-loading cargo, cockpit crew are overpaid bus drivers, and they have learned to milk the system to their benefit. Successfully ran off all the long term high quality employees. Three MM mile AA Flyer here. Loyalty means nothing. DP and his cadre will continue gutting the airline, draining the coffers to their benefit while impersonating an airline management team without going to jail.
2 million miler and Ex Plat member here. Since I’m platinum for life now. I will and all others propose that all the business travelers join Alaska MVP since they are One World Member. Accumulate Alaska miles and join Alaska Lounge which has access to Admiral Club. Admirals Club used to be nice necessarily the nicest, but at least it was more exclusive and not crowded. The snack bar has become managed like Golden Corral Buffet now. Free wine and beer has only encouraged more power drinkers to get juiced up. Adm. Clubs in Phoenix is a joke. If people have the chance check out the new Alaska Lounge in Seattle. Does AA not get it what it means to bare the name American and flag carrier?
AA sucks, I took a flight from Dulles to San Diego. Middle flight AC when out in scum class, I sweated for two plus hours, beads dripping off arm and head. I’ve had better flights out of Iraq on a C-130. They finally made an announcement, “yeah, we know it’s hot in back, the AC has gone out.” Just Awful. AA app for in flight anything stopped working just right as we left the ground and never worked.
Very respectfully,
Sweaty Scum class ticket holder
Being an employee with AA for over 21 years, this is the lowest my morals along with my colleagues have been. The company simply DOES NOT LISTEN TO THEIR EMPLOYEES. They know it all, they don’t even consult our opinion. They force their college book theories down our throat and rejects practical experience. So many delays and even after errors are made, they continue to make them because it saves money. But, this was the mistakes of the pilots. US airways bribe the pilots during the merger to allow us airways management to lead the new company and now we all regret this decision. All we can say is HELP!..
Another article stating what all know, American Airlines is a shit operation. Got it.
Gary must be shorting their stock.
I agree. I stopped flying American. I reckon i did close to half a million miles with them. Their strategy send to be let’s find out what’s the lowest quality of service we can get away with (before passengers bolt). So far not working.
Just got off a 3 hr flight with a mask natzi that lol as down right rude with her mask announcement and when addressing anyone she had to about a mask. She was almost threatening with her spill she announced. Worst cabin service ever. Literally felt like cattle in a trailer.
The unions of this company are internally ruining this company! Sick calls are through the roof! Almost like flight attendants and pilots are trying to down the airline just to get more money during contract negotiations!
Note to AA management reading this… Better to just file complete bankruptcy and WIPE out ALL union contracts once and for all! If you don’t want to work someone else will, pilots included!
American Airlines has really gone down hill!
Probably on par with Spirit With a crappy and cheap product and no reliability.
I remember AA employees laughing at United when United hired Scott Kirby to replace Oscar Munoz as CEO.
I’ll bet AA employees are wishing their BOD had been smart enough to choose him over Doug Parker. (I hear everyone at United laughing now) In fact, United doesn’t even consider them competition anymore.
I recently flew AA first class from IAD to St. Augustine via CLT. It was miserable, as expected. I like to avoid AA at almost all cost. (My original reservation on a United flight was changed, which made it impractical for me to stay on United for this trip.) My desire to avoid AA is all because a few years ago they left me stranded in CLT. They blamed it on the “AA computer algorithm, which predicted I would miss my connection.” The employees made it clear to me that 1) they were not responsible because “the computer did it” 2) they weren’t going to do anything for me because “the fine print” allowed them to just abandon me in a connecting city; and, 3) they really did not care. This was the worst I have ever been treated by any business PERIOD I will say, however, flying on any domestic airline these days is pretty much miserable. First of all, anyone in customer service, including those who work for airlines, should quit, if they don’t want to serve customers. As a former Marriott and Continental employee, I can say this. Also, using the pandemic as an excuse for bad/no service is no longer acceptable. Understand that nurses, ems workers, and public safety officers have had a much more difficult time. I have flown about 10 times since the pandemic started. The flight attendant ritual has now become 1) an unpleasant welcome 2) reluctantly provide a soda (if you are lucky) 3) and then the FA runs and hides in the galley playing candy crush for the remainder of the flight – and this is usually the premium cabin experience. So much for the good old days of commercial flight.
Again, i was doing 6 to 8 flights a month since 2004 till cov8d hit.
AA is the worst, pretense (hear CEO comments) costly and really 3rd clqss service. Once in a while you get good crew but that is rare , AND THIS IS BIZ CLASS I AM TALKING ABOUT
We had a 15 hour delay on our recent AA flight. Weren’t even given a cup of water! And service was horrible! Rude, sarcastic and untruthful. Will NEVER fly with them again.
I will gladly fly American Airlines–but only when it’s free. I pretty much exclusively fly them on award tickets. Honestly, they’re a lousy airline. Their employees seem to hate working there, you have to do crazy stuff like call Australia to even get through to someone in customer service to fix broken itineraries which *they* broke. They cancel flights constantly and their IT is completely broken around cleaning up the messes they made, and communication around changes is poor to nonexistent.
I know what I’m getting into when I book an award ticket on them–a lousy inflight product, and probably hassles along with it. But, you get what you (don’t) pay for.
The pilots are complaining but they are the ones that forced through the merger with US Airways that created this dumpster fire because it replaced AA management with the current craptacular team from America West/US Air.
Be careful what you wish for, you might just get it!
I used to work for the real AA and still have friends that do and believe me…This article barely scratches the surface of how badly they have screwed up this once proud airline.
The American Airlines management is an example of how shareholders get screwed. Corporate welfare doesn’t exist in the form of shareholders getting helped out. Shareholders take considerable risk of their capital and don’t get helped out. Corporate welfare exists in the form of corporate management doing a terrible job and keeping their $3-$25 million a year jobs at the expense of shareholders. The boards hardly ever get replaced because the funds which own a big portion of the stock just vote however their proxy advisors tell them. Of course the proxy advisors are rubber stamps for management. We need greater protections for minority shareholder rights. Nearly every action AA management has taken seems to be a breech of fiduciary duty. The Airline went woke and demonizes a huge segment of the population but caters to transvestites who are 1% of the population. The airline management bows down to ridiculous mask and vaccine mandates instead of just ignoring them and saying no. They are complicit.
AA shareholders have suffered because of inept management and it’s not even related to Covid.
AA shouldn’t have taken the payroll support. They made the mistake of not firing everyone who wasn’t needed (everyone except the pilots) and then voiding the union contracts. They could have emerged as a top airline free from union nonsense and without being forced to fly unprofitable routes. For all the trouble, AA loses money on domestic flights. They’d be better selling their domestic operation and do solely international flights from U.S to the Caribbean and Mexico to long haul operations on the 772 or 773 which makes a good profit.
You guys ever fly European Airlines like Lufthansa on short haul? Well then you know whats bad. Not AA