American Airlines will have a champagne announcement next week – and a coffee provider announcement is coming, too. Both of those are potentially very good news, previewed by the airline’s Vice Chair and Chief Strategy Officer Steve Johnson at the Morgan Stanley Laguna Conference on Thursday.

Since the start of the year, American Airlines has been pivoting to focus on a more premium offering, seeking out customers who choose to pay more for a better experience – something that’s critical given their higher cost structure.

They’ve focused on starting with a number of quick wins while continuing the longer arc of new cabin products and lounges where investments began years ago.

No U.S. airline is going to match Emirates, which has an inflight exclusive relationship to be the only airline serving Dom Perignon in the skies. However,

• Delta Air Lines has gone with Taittinger for champagne.
  
• United Airlines introduced Laurent-Perrier La Cuvée. United, actually, now has quality across its business class offerings – not just champagne. Some of their wines are bigger investments than the champagne.

Here’s the trick to keeping United champagne chilled inflight, by the way.

This is a first for me, the flight attendant made a mini “ice bucket” to keep my glass of champagne chilled! Thanks for a great hop across the pond @united! pic.twitter.com/RsUelCv8Ib

— Suzanne Brooks (@Suzanne747) September 15, 2024

The irony, though, is that champagne is arguably something American was already doing competitively. American even greets each customer in their business class Flagship lounges with champagne.

Two years ago they had eliminated proper champagne in business class and something embarrassingly bad in first. No more!

American has been serving Nicolas Feuillatte Reserve Exclusive Brut in business class and Nicolas Feuillatte Brut Millesime 2018 in Flagship First. Both bottles are very respectable – maybe the business class bottle is a bit below United’s and Delta’s champagne investment depending on taste, but certainly close enough.

It’s the rest of American’s wine program that’s excruciatingly awful. They’ve been serving $8 wines in first class and reached a new low with undrinkable wines on my latest London to Dallas first class flight. Inexpensive wines can still be delicious. They can also drink so badly as to literally send a shiver down your spine.

Hopefully along with champagne, which gets the press, American Airlines will be revisiting its wine program – not just investing more, but investing more thoughtfully.

On the issue of coffee, though, almost anything they do here will be a real improvement. United Airlines began its turnaround under CEO Oscar Munoz in very symbolic fashion. Munoz traveled the system visiting employees and lifting morale, and to show that things were different they did two symbolically important things quickly:

1. Dropped the low quality coffee they were serving (FreshBrew was derided as Fresh Poo) in favor of Illy
   
2. Paired those with Stroopwafels.

American Airlines still serves FreshBrew. Delta offers Starbucks. Even Southwest Airlines announced new coffee – Peet’s – which rolled out last month. And investing in better coffee just makes good business sense!

• A major legacy airline might spend $5 – $10 million a year on coffee.
  
• Improving it might double the price.

However the value created for an airline far outstrips that price.

• Improved operational efficiency and reduced delays, by eliminating pilots stopping at Starbucks in the terminal on the way to the aircraft.

• Improved employee morale, which in turn affects customer service. Better coffee is a product flight attendants can be proud of and reduces complaints they receive from customers.

• This matters especially to high yield business travelers, exactly the customers American is spending hundreds of millions of dollars to win back.

Ultimately I still want to see American invest in:

• The coach experience: More extra legroom seats in coach, ideally seat back entertainment, and better food for sale (recent additions are nice but quality isn’t great).

  

• Consistent premium experience: Retrofit existing aircraft with new business and premium economy seats.

  

• Upgraded lounges: American’s new design template is nicer than Delta’s and United’s, but has only been used for a very limited set of new lounges (although I understand there’s going to be a retrofit at Washington National of the old US Airways club). They need to aggressively upgrade the lounge experience. That also includes food, where they still lag Delta and United. And it includes business class Flagship lounges, where United Polaris and Delta One lounges are nicer (but where they could lean into Flagship First Dining in Dallas and Miami and Chelsea at New York JFK).

  

• Improved policies: The customer should be at the center of every policy. Making passengers collect and recheck bags on separate tickets even when both are American Airlines tickets (or when buying an American Airlines flight to Los Angeles because award space wasn’t available to connect to a business class mileage award on Air Tahiti Nui – spending more money on American!) is just a terrible experience. Not allowing routing changes with same day confirmed changes – letting customers benefit from American’s vast hub network – is a terrible experience when it means not getting home earlier.

  

• Quality messaging across the company: Leadership needs to sell a premium vision, and explain the role that employees across the company play in its success going forward – getting the front line on board to deliver an elevated experience. The airline is actually improving in a lot of ways, but employees don’t realize it.

  The messaging also needs to reach down to middle management, where employees haven’t been incentivized to sweat the details of product. Having wine on board checks the box, there’s been no real reason to be thoughtful in selection. A decade ago there was real thought put into the airline’s boarding and deplaining music. Getting the details right across the board is how you get the most out of each dollar of investment.

In other words, there’s a lot of work to do, and a lot of it is hard! But improving the coffee is great symbolic way to start that journey, if additional real change follows.