Doug Parker Lays Out His Vision For American Airlines Over The Next 3-5 Years

American Airlines has largely been using the slogan “caring for people on life’s journey” and that makes an appearance in their new safety video along with their recently-trademarked ‘we fly so you can soar’. These are slogans, though, and not mission statements. And a mission statement has been clearly missing from the airline.

At times management has seemed confused over whether they’re trying to be a low cost carrier or a premium airline, and flight crew have been confused over whether they’re supposed to be delivering a premium service or something akin to what they think Spirit Airlines is.

  • They put in new business class lounges and good business class seats, but squeeze more seats with less padding than ever into coach and take seat back entertainment out of planes.

  • They identified some passengers as ‘less than’ with Basic Economy, rather than treating everyone equally once on board (though recently they decided elite members would still receive benefits on basic economy fares).

  • Doug Parker himself thought they could get away with not putting seat power on the old US Airways fleet.

  • They said they had a premium revenue problem, yet removed premium seats from Boeing 787s and Boeing 777-200 aircraft.

To focus decision-making, and to give clear instructions for employees to internalize, the airline has needed a mission statement. And American’s CEO Doug Parker actually just came the closest to articulating one that I’ve ever heard since the legacy US Airways management took over at the carrier nearly 7 years ago.

In a talk with employees on October 15th he was asked for his 5 to 10 year vision for the airline,and he said it’s “to go be the preferred airline of customers around the world.” He said 3 to 5 years from now they’d be “the airline customers choose to fly given a choice.”

It was actually a much longer and more thoughtful articulation,

The vision is to go be the preferred airline of customers around the world. We’ve got the largest network in the world. We view this as an opportunity to make sure that as we come out of this we could out stronger, certainly vis-a-vis the others.

I have great confidence in the team’s ability to do that. 3-5 years from now what I expect us to be and I think we will be is the airline where customers choose to fly given a choice, and by the way they’ll have more choices to fly us because we’ll have a broader network than others.

We will provide more choice to customers and given that choice they’ll prefer to fly us because we have a great product that people want to fly with great people providing that service safely.

[We’ll be] a place where people want to work because they know they work for a company that cares about them and they’re supported in their jobs and they enjoy the work they do and the people they work with and they know that what they do is valued by the company they work for and it’s important and they understand bow it makes a difference in the bigger picture.

And a company that provides a return for our investors because we have to do that, so one that is profitable and provides a return so we can get more and more investment in the company..anyway that’s where I expect we’ll be in the next 3-5 years, where we deserve to be: the world’s leading airline.

We were well on our path I think. It was hard for people to see given the integration certainly, makes it hard, but we’ve gotten through that – we were headed into 2020 feeling really good about our ability to improve versus others.

We were not at that standard I just said but I felt good about our ability to get there. I feel better about it now. as horrible as this is, this situation, it does provide an opportunity to catch up faster – because everyone’s had to taken their airline down to essentially nothing, now we all build back up to something that – and on things like retiring aircraft that would have been several years till we got to the point where we got to the fleet to the position we’re in now, because we didn’t want to reduce any service to anywhere.

But now we’re going to come out with a much more efficient fleet. That’s an easy example but there are several examples like that and we’re gong to come out of this with a fleet that’s by far the youngest of the majors and the others are going to have to figure out what they do about their older aircraft.

I feel really good about the future of this company. we’re well positioned to be the best airline in the world and that’s where I believe we will be in 3-5 years.

I’d quibble that American was well on its way to being the preferred airline before the pandemic. They lacked Delta’s operational reliability, and they were intentionally making their domestic product worse by cramming in more seats with less padding and removing seat back entertainment from those planes – investments that have continued during Covid-19. And international premium passengers often fly coach domestically (companies perhaps pay for premium on flights over 4 or 6 hours) but even up front the domestic product was worse too with less legroom and less comfortable seats.

But if Parker actually sat down and wrote this out, internalized it, evangelized it – if he believes it and got his employees to believe it, too – they’d be well on their way because they could start making investment decisions based on it.

In the past meal decisions have been based on looking at what competitors do and copying (maybe doing a little less). Jeff Bezos says the number one mistake companies make it looking at what competitors do rather than what customers want. But if the goal is to be the airline people choose to fly, that’s a customer-focused vision.

They’d still have work to do, including defining who their customers are. There aren’t many premium business travelers today, and there isn’t much opportunity for international flying. But American more than some of its competitors needs that flying to return because competitors will have a cost advantage with lower debt and more junior (lower paid) employees. American needs a revenue premium, so they need to be the preferred airline to survive.

And they might just have the start of a mission statement that could let them do it.

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. I agree this all sounds nice, but as you point out, AA’s actions don’t very well match up with the stated aspirations. I suspect the reality will remain that people will fly AA when it by chance has the best schedule and price. I would be shocked if AA ever became the airline Parker described under his leadership.

  2. Hopefully that plan includes Parker and his cronies from US Airways to be gone. They can’t make a good decision to save their life. Time to put them on a performance improvement plan with 6 months to shape up or
    ship out. That includes the terrible BoD

  3. As an AA employee my preferred airline is jetBlue. No one here has pride in the company at all.

    The only reason people buy tickets on AA is because they are cheap. I used to care but seeing how management has spent our profits, buying back stock instead of making us more cost competitive, infuriates me.

    Sadly, and this hurts me to say it, but AA needs to fail. There is not much that is salvageable. Bitter and entitled employees, bad management, and underperforming metrics compared to peers means the company, if it survives, will just continue to shrink and become worse over time.

    Alaska, jetBlue, SWA, Spirit, and Delta are by far the superior north American carriers and will take over AA’s market share easily. Hopefully they are hiring!

  4. As a retired above average ($750 bonus for shuffling paper) Stratgeic Planner and Performance Management Analysts, that’s a lonnnnng Mission Statement 🙁

  5. I Prefer American’s new aircraft over Delta’s outdated aircraft.
    AA IFE IS OUTSTANDING!
    I USE MY OWN CLEAN,STERILE DEVICE.
    AND STREAM American’s HUGE library of apple music,movies and live TV.
    AA just needs to add better snacks and upgrade food in premium cabins!
    Great job AMERICAN!

  6. @John Luffred:

    apparently you have not flown AA lately because they nixed free live TV to save $$$.

    They also need better operational reliability (get rid of Mesa), power ports in all seats, FA’s that provide consistent service, and better premium product.

    other than that, you are spot on.

  7. I’d say AA’s slogan is now DDD (and none of the letters stand for Dallas)…

    We Densify [our seating] and Devalue [our mileage program] to incentivize customers to Defect [to competing airlines].

  8. These are empty words written by smooth, bald faced liars! Their employees will NEVER trust them because management has “done them dirty” so many times!!
    Doug Parker’s words “[We’ll be] a place where people want to work because they know they work for a company that cares about them [Not while I worked for them] and they’re supported in their jobs [Another LIE …AA NEVER backs their employees]and they enjoy the work they do and the people they work with and they know that what they do is valued by the company they work for [Wow! REALLY???!!!] and it’s important and they understand how it makes a difference in the bigger picture.” …are words written by an out of touch, narcissistic management who use, abuse and seemingly systematically destroy its employees!
    Delta and Southwest are the future!!!
    I should KNOW …I experienced AA’s lies FIRST HAND for seven years!!!

  9. What about your Frontline workers that have made sacrifices from the beginning of this pandemic. The Frontline worker that everyday make sacrifice to work for Amereican Airline and hope they don’t come in contact with the virus. What are you doing for them?

  10. Empty words. The majority of customers fly Y and they have been relentless in degrading that experience. John Lufford is a troll or else someone who does not fly AA regularly. The interior of AA’s new aircraft is <<<< DL's 20yr old aircraft. Not to mention DL manage to have better on-time metrics despite a much older fleet. The only ones benefiting from AA's newer fleet are the environmentalists, since new aircraft are more efficient.
    AA have sunk to the bottom and are now worse than UA, and that's saying something. DL are light years ahead of them, despite Skymiles being so bad.

  11. Parker’s strategy: forget the hyper-cyclical nature of the business, treat every profitable day as the first of many, beg Uncle Sam when it’s not.

    Also, go drinkin’ when you have a bad day that you should have foreseen, get DUI, repeat cycle.

  12. If Doug Parker and his Cronies would stop saying information to raise the stock price and him selling his on the high to make him the money, and if he didn’t screw all the people who kept the Airline solvent by shedding Medical retirement, Alot of people would have left ,Leaving the younger lower paid employees to brave the future,but unfortunately we older Employees see Bankruptcy coming in the not so far future because of Chug a lug Doug and his Cronies Decisions.A Headquarters that cost Over a Billion Dollars.Really!

  13. Response to DB

    I’m a 37 year employee with AA.
    The experience as an you describe with AA is just the opposite of mine. Do we work fir the same company.
    Given that you want the company to fail, have you considered looking for a job elsewhere?

    MP

  14. Worked there for 30 years. Laid off in july along with 5000 other mgmnt employees who knew what they were doing. Caring on lifes journey is bullshit. Nothing caring about the way it was done. Top heavy senior levels, and questionable diversity picks got to stay put while many of us got shuffled out the door. I hope Congress isn’t dumb enough to bail em out. The HRVP came from Walmart and he treats people like Walmart employees.

  15. Doug Parker ran America West Airlines and he did a great job. Ask any AWA employee. We loved the airline and our passengers could always tell that we did. When working as flight attendants on USAirways or American Airlines flights we we’re always asked by passengers if we came from AWA and when we replied yes.. the passenger said they could always tell. They replied that we were all very nice, friendly and very professional.Doug Parker did a great job with the airline and with his employees.

  16. In my opinion, the best move AA has made since the merger is upgrading their fleet of planes. The pandemic has derailed plans that would have allowed them to control debt and spender better. AA was reporting a Billion dollar profit every quarter. Once International travel demand returns AA will rise from the ashes.

  17. The Stock will take a dive soon.. Look for bankruptcy Reorg. After the top 3 stock holders try to merge their stock with Jetblue and Alaska..
    There is one way to get out of this situation.. And I have done it before.. Guess how..

  18. Obviously DB is a disgruntled employee. I’m proud to work for American and for the way we are navigating the pandemic. While I agree that it’s a stretch – maybe a long one – to say we were well on our way to reaching this vision, I believe Doug when he says we are in the fight of our lives and that it is a fight we will win to get past these difficult times and weather the steep financial losses. I also believe that Doug cares about us as employees and that he wants American to be the best. Covid ushered in a new era where adaptability is key and decisions are made quickly and with precision. If ever there was a time for us lay the groundwork to not just survive but to thrive, this is it! It’s a great time to work for American, and it’s a great time to fly with American!

  19. He spoke with very carefully chosen words. I had to read them twice. In reality, he only said that his reason people will fly AA is because of the network.

  20. Mr. Parker is so out of touch, indeed confused. Retirement of airplanes and simplifying the fleet indicates becoming a low cost airline. Having to bring your own devices onboard and downloading an app to watch movies is ridiculous. They only differentiate with words not their actions. You can’t bring back your business traveler because your service is equal to less of the other airlines. Plus too many labor issues. Your airline doesn’t value its people. Just the words, biggest, best connected, huge network, sounds like the present leadership of the USA. Just talk and a big money greedy power game. Service, price, network, availability and safety that will get you there!

  21. It is highly unlikely that American will make it even 3 years in the same form it is now.

    AA has the lowest amount of cash compared to cash burn of any US airline; that ratio is about one-fourth what AS, DL and WN have and less than half what UA has.
    AA continues to downsize in major markets like NYC and LA while competitors grow in AA’s hubs.

    AA pushed the limits of good financial sense in the best of times; AA never gained an operating cost advantage over DL or UA even though both had older fleets. UA’s fleet is now much older as DL has accelerated aircraft retirements. Operating entire hubs that AA management itself says have little potential of being profitable is not sustainable but AA operated huge parts of its network for years because doing so was ” strategically necessary.”

    AA’s value to major corporate contracts continues to fall as AA pulls out of major global and US markets and then argues that they are trying to be a niche airline and you can fly all of the other routes on partner airlines. DL and UA also have partner airlines and still fly the major markets and are pouncing on every opportunity to win over AA’s customers. AS and B6 see enormous opportunity to feast on AA’s bread and butter even while trying to convince AA management that they are here to help AA. WN can easily overlay most of AA’s network in the Americas within a few years.

    American Airlines’ best days are long gone and AA once really was a great airline; since the USAirways merger, AA is an idea that never reached its potential and covid has simply accelerated the reckoning for of the bad decisions.

  22. I have no complaints, overall, about AA’s service in my years of Executive Platinum-level flying since it was acquired by US (I’m based in PHL). I also have no idea what it’s like today since I haven’t been on a plane since March. But the idea that it was on its way to being the airline of choice could not be more the opposite of my experience. Everything that was happening at AA, from the back of the plane to the front, from revenue flights to (impossible-to-use) reward flights, from hard product to soft product, had already caused me to discard any loyalty to AA beyond convenience of schedule (which, as a hub captive, usually won out).

    JetBlue? Absolutely (though I think they were starting to slip in economy—I only flew them when I could use Mint first class, which was amazing every time). Southwest, in many ways? Yes—by far the most consistent airline in its clear value proposition over the past 10+ years. Delta? Definitely a contender (though, practically speaking, not in PHL for my travel patterns). But AA? No way.

  23. He put Steenland on the board for 2 reasons, cut costs, and help guide them through another round of BK..Funny how he doesn’t mention that part in his 3-5 year plan.

  24. AA will be in bankruptcy as soon as they can’t suck any more money from the tax payers. I’ve flown AA since 1969 and have been a frequent flyer since 1990. On flight 51 from London to DFW last November I quit AA. I have flown them once since then and that was a short domestic trip. And that was long before COVID-19. Of course the past 8 months no one is flying much and I’ve used this time to plan my trips to Europe, Australia, and beyond when this nightmare is behind us. None of these plans include AA. Where I used to look at AA first I look at AA last. Instead of connecting flights to support AA I drive 100 miles and fly another airline direct. I can go anywhere in the world without needing AA just by driving 100 miles. And the employees can blame Doug Parker but it’s the employees that have driven away the passengers. The lazy flight attendants is who has driven the passengers away. I’m looking for the day when AA fails and is absorbed by another airline that wants to give decent service.

  25. The marriage of USELESS AIRWAYS & American Airlines was a joke. US air had reinvented themself into a low-cost carrier and American couldn’t handle the competition and would not had survived after DL/NW merger. My last flight on American Airlines was when I stopped on the jetway to allow a pilot to hang his jacket, he didn’t say thank you, he said “come on, keep moving.” Really? Every staff member I’ve ever encountered are not only rude, but have an elitist attitude. United made a huge mistake by not trashing UNITED branding completely. When Eastern Airlines looked to the federal government for assistance when they were having a financial problem prior to their bankruptcy, united, american & Texas air questioned the government why they would bail them out, noting survival of the fittest… only the STRONG survive… Now these hypocrites are looking for $$$ and seem to have forgotten that only the strong survive. This would be the second time we bail them out! Why does Canada only have two airlines and the United States has right off the top of my head if we Include porter, at least 10 carriers. Not to mention at least they are taking PPP money when they made profits that they will never ever have again after Covid. To add insult to injury, the government is asking them to give money back not mandating and forcing them to return the money I’m pressing charges for Fraud, but asking them. Meanwhile they find it better to continue to pay these people their full salary rather than put them on unemployment, when eventually they will go to unemployment benefits. I wonder how many of those who are currently unemployed would like to be “protected” with a full paycheck. But then, when you look back into the history of the airline industry, most of the airlines were managed by people who did not succeed by ethical practice. Airlines in the past never made money, it was all about cash flow. Ever since the airlines, who laughed at people express for nickel and diming al-a-carte services, then making billions of dollars doing the same thing, overcharging for airfare as well. The only way American Airlines could turn a profit at this point, is if they beg Mr. Gordon Bethune to divest his current interests and turn the airline around to MAKE AMERICAN GREAT AGAIN….
    P.S. The only problem is that AA was NEVER a great airline.

  26. Parker needs to create a vision that is realistic and executable. With all of the downgrades he made to AA, how in the hell does he expect it to be the airline of choice for flyers. Give me a break.

  27. I have trouble swallowing the ‘”less padding” in main cabin, argument. I have started to look closer on recent flights. Compare the seats with seatback IFE to the new slimline seats and the padding on the seat back looks very much the same. The big difference, hence the slimline appearance, is the plastic seat back structure redesigned without video screens. Perhaps it’s because the older seats have worn down the padding, I don’t know. My conclusion is all visual and no measurements were applied.

    The space-saving that enables more seats, comes from the slim non-video design and of course, cramming some rows closer together. Aside from that, regardless of whether it is accurate or just my perception, many highly regarded airlines are using slimline seats. But of course that’s rarely, if ever acknowledged here. Note: in our thought-leader’s mind (and what is the blog mission statement?) most airlines are regarded higher than American, so it’s a wide open field.

  28. I predict American will not survive in the long-term. American’s aircraft are outdated and miserable. The crews seem unhappy too. American’s customer service is the worst I have ever experienced from any company. American has lost its ability to care about customers and do the right thing. For example, two American flights ago their ‘computer algorythm” INCORRECTLY predicted we would miss our connection in Charlotte. As a result, American canceled our connecting seats and left us stranded. (American’s computer algorythm apparently fails to consider if the connecting flight will be delayed too, so it makes a cancellation decision based on the published/scheduled departure time and not the actual/updated scheduled departure time. As such, we were at the gate for 45 minutes before our scheduled connection boarded, which we were suppose to miss. They refused to let us back on the flight because it was oversold.) The three American customer service agents/supervisor made it abundantly clear they just didn’t care, because it was “not their fault,” “it was the “computer’s fault.” Their explanation was infuriating. They offered us 1000 f.f. points…are you kidding me? Our most recent flight out of DCA was canceled – weeks in advance. When I called to get on a comparable flight out of BWI (DCA’s neighbor) they demanded more money. We had no choice, and paid up because they canceled the scheduled flight – presumably because of low booking. On our flights originating out of BWI I could not find a power source to charge my phone…not acceptable, even worse it was in first class. Speaking of first class, I couldn’t help but notice there was no service at all on virtually any of our four segments. (I do think that instead of sitting down to play Candy Crush, the flight attendants should have at least walked around once or twice to enforce the mask requirements, which only about 95% of passengers comply with.) I suppose during a pandemic I understand zero service, but other than the free bags and bigger seat, the increase in cost to upgrade may not be justified. The only positive thing about American is the pricing (strangely I said the same thing about WOW Airlines right before they went bankrupt). If you include the savings of multiple checked bags, you can sometimes upgrade to first class on American for about net $100 each way, which is admittedly pretty good. However. I will only fly American in the future if there are NO other options. Delta and Southwest will probably be the only major airlines left when the dust settles from the pandemic – these are two great airlines. (Note: years ago I was a Continental employee.)

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