Three years ago American was talking about “Going for Great.” That’s still in the safety video but otherwise it isn’t something we’ve heard about from American Airlines in quite some time. There was no new slogan articulating a broad vision for the company offered this year in its place.
There wasn’t a lot of news broken at American’s Media Day — just lots of small piece of information learned. What was hard to take away was a broader narrative for the company, other than that Doug Parker thinks they’ll always be profitable (and he calls it taking a leap of faith, which suggests to me lack of evidence).
- American plans to add more seats to planes. They don’t plan to go below 30 inches of pitch (the tightest configuration of any legacy US airline has ever offered) while Delta says they’ll never go below 31. They think with less comfortable slimline seats and no seat back video customers won’t notice less legroom.
- American doesn’t have plans to offer a native booking experience through their mobile app. They think pushing people to a mobile website is good enough. That seems crazy to me when some other travel providers report 30% of direct bookings through their app, and the mobile site seems to me so non-functional.
- They know award availability and upgrades are an issue and promise they’re on track to improve. They’re offering fast wireless internet and adding seat power even to the legacy US Airways ‘basket of deplorables’ fleet.
- They’re losing fewer bags, adding inflight free texting, new inflight bedding. Main Cabin Extra (extra legroom coach) will be getting new amenities (presumably free drink, maybe a snack on longer flights). American seems more focused on Delta as a competitor than United.
- Boeing 737MAX and A321neo won’t fly transatlantic, but the A321s could fly Phoenix – Hawaii. Philadelphia is their transatlantic gateway, New York airports serve boutique business markets.
What surprised me was that for an event American put together to showcase their best foot forward to media and investors they didn’t offer a bigger narrative. I did see some reports suggesting that the day’s stock bounce was investor reaction to what American was saying, but the stock’s performance mirrored Delta’s gain on the day so that seems unlikely.
We did get a sense of what they believe is important. American says it’s difficult to offer a better product than competitors, because competitors will match. So ultimately it’s corporate culture and employees that will differentiate an airline.
- They realize that more compensation isn’t enough to get employees taking better care of customers.
- But what was missing from the presentation was the vision of where they want to go, other than Doug Parker’s refrain that they will never lose money again and will always earn $3 billion to $7 billion a year. What will motivate employees?
In order to have happy and motivated employees you do need to pay them enough (an amount they feel is fair). But what employees need is to feel they’re part of something larger than themselves, that they’re working towards a goal or mission and they need to like and respect their colleagues.
I left without understanding what the mission or purpose of the airline would be. Employees are being given nicer facilities, help using their benefits packages (and employees have lost a lot of weight), but at the end of the day there’s a percentage of employees who don’t deliver for customers or the airline.
And other employees see those colleagues not working, and not suffering consequences. Which makes it tough to maintain their own morale and go above and beyond when employees around them don’t have to. In other words a small portion of employees bring down the median employee.
There are still great frontline staff who excel in spite of their colleagues and the incentives they face. We love those employees at American! But they’re always notable as the exception. And it’s unclear whether the airline has a strategy to moves from their being the exception to becoming the norm.