After the American Airlines first quarter earnings call on Thursday, employees gathered to hear from CEO Robert Isom, flanked by other executives. One question that came up was the kind of customer that the airline is targeting?
Leisure travel has taken up the slack for lack of business travel, but the airline insists business travel is returning. They’ve made changes to AAdvantage to reward more infrequent flyers and customers who engage with the program in ways other than just flying, indicating a shift away from laser-like focus on the road warrior. These things were cited by the employee wondering whether the airline is targeting a different customer than before?
CEO Robert Isom responded that American Airlines needs to be all things to all people,
We’re the largest airline in the world. Every day we’re out there hunting for 500-600,000 even more customers. To be the largest airline in the world and over the pandemic we carried one out of every three passengers. We have to have a product that really attracts everybody, and in unique different ways.
There’s part of this that’s right and part that’s wrong. They need a quality product, and indeed to offer different services, that large numbers of people will buy.
But that means a quality product, not a degraded one so that they’re offering the minimum product needed to attract budget flyers. Because it isn’t possible to be all things to all people with truly differentiated products.
Employees have complained for several years about being confused over the kind of product they’re supposed to offer – whether they’re a premium carrier, or an ultra low cost one – and what that means fro the service they’re supposed to deliver to customers. Once on the plane employees don’t take on a different persona after checking fare class paid on a manifest. American Airlines has lacked a mission statement, at least aside from passionately pursuing efficiencies and not spending a dollar more than they need to.
Chief Revenue Officer Vasu Raja agreed that the customer is changing, even the previous business customer is behaving in different ways,
So much of who our customer is is changing in a way that’s a real opportunity for us…the nature of demand is changing…there’s fewer people that do a single day business trip..it’s a huge opportunity because suddenly those people who are flying on blended trips are paying us fares which are pretty close to what business customers are paying. Primarily they’re coming to us through AA.com, our lowest cost of sale channels, where we can create the best consumer experience for them.
…We are seeing more people enroll in the loyalty program than ever before…more international enrollments than what we’ve seen before…the same thing applies to our credit card, more people are not just spending on the card but our spend is growing at or above the rate of inflation.
The airline is adapting to the new customer. And these adaptations aren’t ‘being all things to all people.’ That’s a mantra they need to excise from their thinking. They need to have a consistent model of who their customer is, what that customer needs, and put that at the forefront of thinking as they evaluate every policy at the airline. Ask, what decisions make doing business with American more frictionless for these customers? What will make these customers delighted to fly American? And though these may be different customers, don’t ask the question ‘ what’s the minimum we can give these customers while still ahving them buy our tickets?’
“You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time”.”
John Lydgate.
Isom is using the same Kool-Ade packets as Parker was.
Another example of American Airlines just bumping along with no visionary leadership worthy of its historic legacy in aviation. Really quite sad.
American has had an identity crisis since Crandall left. They keep trying to be “Boujie” on a Dollar Tree budget. AA = Awful Airline
Maxine! Badda Bing!
+1 Big Time to Maxine
I travel every week. 250+ segments, mostly domestic, every year, for business. I use the Club, the credit card, and appreciate the pretty much routine upgrades. Booking FC 1 or 2x per month. Who should be my airline? I just don’t see that AA gives a crap about people like me.
Sadly, I think you’re correct. They seem to be headed in the direction of Corporate Woke!
Robert Isom has his work cut out for him after the disaster Parker left.. I wish him the best in cleaning up the mess.
I don’t get this constant need to differentiate between “business travelers” and “leisure travelers.” Aren’t the vast majority of travelers both at some point in the year?
I think the A321T with coach, business and first class plus the international wide bodies with coach, PE and business/first class is offering something for everyone. You can choose to buy coach or you have two levels to buy up to with an increasing amount of comfort at each level.
The problem lies with the rest of the domestic planes, which I won’t fly unless there is no better option. As AA is investing in more premium heavy international planes I was hoping (not expecting) they would walk back the Oasis product.
Guess that’s not happening…..
They always forget to mention that they have been the least profitable airline in the US airline industry for over a decade, even excluding the last 2 years. If American would get past the idea that being the biggest matters, they might be able to focus on what is necessary to be the most profitable = which will result in a higher quality product.
A company simply cannot deliver a high quality product if they have the lowest levels of profitabililty in their industry.
Given that AA also has some of the highest unit costs in the industry, they simply cannot carry all passengers and make as much money as some other airlines.
Simple is best. Southwest has a fantastic product. Their flight crews are fun and the whole company has the team approach. Us airways crews were way better than the aa crews Can’t wait to retire from aa. And my obituary will say I flew as a f a for many years for usairways no mention of aa
This is absolutely, 100% spot-on. No matter what is said, American has ruthlessly chased efficiencies to thus offer the bare minimum of customer service — for many years. C-suite officers have basically admitted this in past interviews and earnings calls. In doing so, it’s eviscerated any unique brand attributes and become a ubiquitous commodity (it hasn’t been something special in the air for decades now). Now, they want to change this? Good luck!
America West CEO tells employees to …uh….yeah…whatever….just keep the cash coming in…um..yeah…mmm…k?
Where is the vision?
“Where there is no vision, there is no hope” said George Washington years ago. Washington was building on the thoughts of King Solomon in the Bible who said, “Where there is no vision the people perish.” Corporations, like American Airlines, among many others, might want to reflect on these timeless words that have proven to be true since ancient times.
When you want to be all things to all people, be Delta Airlines.
I really enjoy flying with AA. I’m EP and last year it was easier for me to achieve status. This new single point metric will be more difficult to achieve. I’m contemplating using another airline for status. Thanks
I agree with Ken A’s sentiment; this problem isn’t unique to AA. United and British are just as schizophrenic. It feels like airlines should adopt the rental car model where they have different brands under one corporate umbrella.
To be an airline for everyone sounds like a great idea but it does not work. AA has the same problem as Marriott – being the largest company does not mean to be the most profitable or attractive to customers. As lifetime Titanium and HHonors Diamond, my main hotel stays this year are with Hyatt (even at a higher price). I will be happy to jump from AA even after 3.6M lifetime with the airline.
I truly feel for AA employees. For the most part that have tried to help flyers over the years. However, Parker made it quite clear that revenue was the holy grail… Not customer service. As a result, many flyers have chosen other carriers that at least seem interested in rewarding loyalty. The new point system is a joke. Bye AA, bye EP status, as soon as I burn my miles. (Before they figure another way to burn me!)
I work for AA and it feels like we’ve lost the plot. Isom’s first State of the Airline was not reassuring. We cannot be all things to all people and do it well. I no longer feel proud of my job. If AA leadership thinks we care for people on life’s journey they are kidding themselves. It’s heartbreaking.
Oh, oh, virtual signalling already?
Agree. The new AA FF plan is really pitiful. Raised the minimum needed for seats to 30k.
Strictly bases on dollars spent. If you do not fly alot no way to get status, unless you really spend lots of $ on the AA cc.
Looking for a new airline myself, too bad not many to choose from.
I’m giving the airline 3 years before they start looking to merge with someone else if they don’t start changing the way they’re running AA!
Get ready, they’ll merge with Spirit and paint all the planes surrender yellow!!!
AA has become the biggest joke since Parker took over and now his twin. The elite program makes absolutely no sense and let’s take away your status since you been so loyal to us and now charge you. This airline is not a premium service airline, it’s the Greyhound of airlines. That is why you’ll see less business travelers, who wants to deal with a low budget airline. They treat employees like crap therefore the service is poor. They need new leadership, forward thinking personal and not the folks there now who cares about their pockets.
Done.with AA (absolute aholes). consolidated 3 flights to 2. reservation specialist had no explanation. notification came after midnight for 8:34 am flight. booked months ago. weather perfect. left seatless in musical chair game. missing very special event. could not get a seat on any plane from Chicago to NYC metro area. would not book us on another airline. if traveling for something important like wedding, vacation or business…DO NOT FLY AMERICAN!