Not Service, Not Seats: To American’s Chief Revenue Officer The Schedule Is The Product

Vasu Raja is American’s Chief Revenue Officer. He’s risen rapidly in the organization during the pandemic. I love listening to him because he makes bold claims about the world, sometimes not entirely backed by facts or evidence. But he’s never mealy-mouthed in his assessments.

Raja is a very bright guy who may lead an airline himself one day. However every time he speaks I can’t help but feel he has a huge hole in his thinking. He appears to think of the American Airlines product entirely as being about its schedule.

There’s no question that to appeal to customers, an airline needs to get them from one place to another. It needs to do so efficiently, reliably, and safely and at a competitive price. Raja talks regularly about American’s ability to connect passengers through Dallas and Charlotte to get them where they want to go.

  • In fairness, legacy carriers have learned that while non-stop routes used to be their cash cows, those often have ultra low cost carrier competition. So yields in and out of small cities are often better.

  • But Delta can connect passengers well through Atlanta, and also through Detroit and Minneapolis (though not only), United can connect passengers through Houston and Chicago (for instance) and Southwest Airlines carries more domestic passengers than any other airline.

In the latest Airlines Confidential podcast the tendency to focus on the schedule and not even mention the passenger experience at the airport, on board planes, and with employees is evident throughout. Here’s a key statement that lays out the airline’s vision coming out of the pandemic,

We must come out of here with something where we have the very very best product for our customers. That means we have to have the most comprehensive network, the biggest depth of schedule, the most breadth of schedule, a loyalty program that makes it easy for them to fly us and get rewarded on us.

The way American is doing this is shifting its partnership strategy away from long haul carriers (they’ve focused on airlines like British Airways, Japan Airlines, and Qantas in the past but have pivoted to add Alaska Airlines, JetBlue, Jetsmart, Gol and Indigo).

These partnerships are about the network which is the product.

We need to make it so a customer would willing choose AA plus, for example, JetBlue over any of our competitors on a totally organic network. And the more and more we can do that they get their loyalty benefits, they get their corporate deal, they get all of that stuff the more real the strength and product potency of this network is.

Brian Znotins, American’s Vice President of Scheduling who works for Vasu, described the airline’s challenge with international flying from Los Angeles as, in essence, that they make money when they fly routes without competition but where they’re head-to-head with other carriers those carriers win business on customer experience.

It’s striking that you do not hear any reference from Raja when he speaks to the airline’s official brand purpose of “caring for people on life’s journey.” There’s nothing about customer-centric policies or experience. It’s important to understand that the schedule is the product.

The only hint that Vasu sees product mattering is in his discussion of putting widebody aircraft onto domestic and short haul international flights out of Miami, which were historically narrowbody markets, and finding that customers went out of their way to fly these – mentioning “flat beds” – and this allowed them to “stop competing on price.” So they plan to also “continue to upgauge the [Miami] hub” but that means “continuing to do what we do which is have 321s and 737s there” as well as “bolster the connectivity of the hub.” Is an Oasis first class seat with less legroom the same thing as a flat bed?

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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  1. The problem I have with this view is that I’ve had misconnects on about 1/3 of my AA flights, due to late inbound flights into hubs, too little connecting time, and lack of holding outbound flights. All for gaming their position on OTAs. They really have to make that work before we even get to the domestic hard product.

  2. Gary: Interesting comments and i wonder if this is cause or effect. They can’t compete on service so they emphasize the network. Or. They want to compete on network because they can’t compete on service.

    And if they are now admitting that Miami customers like the flat beds….maybe customers say that because they like the service and product.

    That’s their conundrum right there.

    Talk about thee schedule if you can’t compete on service or product….

  3. Vasu is right. In the United States, consumers reward schedule and price disproportionately more than anything else. While it might be to the chagrin of some, the fact is the seat, service, and food are basically incidental once you look at the airline with a macro view. Vasu gets this.

  4. Reminds me a bit of study I one read on how traffic engineers design flows. Their attention tends to be on making the cars go more smoothly and ignores whether that is harder on the people in them. Time to a specific destination, accessibility, changing directions, all become nuisance issues compared to moving the cars. I once drove on a street where the engineers told me they turned off the left turn on red arrows just to force people to go forward and make the traffic go faster even if people were further from their destinations. When you get down to it, I’m not sure most governments are any better at considering their original missions and who they are really working for.

  5. Network? Has Raja ever tried connecting from American to one of their “partners?” How about connecting through CLT? In many cases, its not possible.

    Airlines have shot themselves in the foot. I will fly any carrier (well, almost any carrier) with a nonstop at a price and schedule that works. No extra connections, no paying up for my preferred carriers. in the end, I save time, money and aggravation. “Free” tickets cost more than paid tickets. (Looking at you, British Airways! )

  6. AA doesn’t care about customer experience. They want to pick our pickets for money. After all, AA is going for Spirit.

  7. I am booking away from American because of OASIS.

    It won’t take long for Vasa to find out he is wrong.

  8. If you look beyond the occasional flyer, this story reads like a big “duh.”

    Why would I put myself through the hell of their new seats; cramped bathrooms; worthless F&B service? Convenient connections non-existent just between AA flights. Try connecting between ORD-SAC in PHX—you walk half way to SAC.

    No thanks. Can only hope this guy with such a narrow attitude stays at AA and doesn’t tarnish another carrier.

  9. AA does need to back up their schedule with a more competitive service element as well. You can’t rely one just one thing to compete on because that will fail from time to time, leaving the airline in a hole. With that said, I actually don’t mind the OASIS product too much. Still prefer the legacy AA seats but the new seat design isn’t terrible either. Main cabin leaves much to be desired from a comfort perspective. Additionally, I am one of the passengers that occasionally go out of my way for a lie flat via MIA. The airfare is usually less and I get more EQMs plus a better hard and soft product all around (especially with the flagship lounge now reopened).

  10. AA…
    I have had misconnects, disconnects, lost luggage and missed meetings. Amazingly those have all but disappeared when I started flying Delta as my primary carrier. I do a once a month trip out to AMA. I can actually score a 2 leg flight on AA from my regional airport through DFW. It only makes it about 65% of the time. I fly Delta through ATL to DFW then switch to AA commuters for the DFW-AMA leg. Yes it takes longer, yes it costs more, however I haven’t had a missed connection or delayed flight in several months. AA is clueless as to what it takes to run an airline.

  11. @ Gary — I think this guy is just making a career gamble, betting on something different by defining the product as the schedule. Time will tell if he is a genius or idiot. If he proves to be a genius, he will be lured away by another airline. If he proves to be an idiot, he can be CEO at AA.

  12. I’m one of those MIA flyers he mentions. I do MIA-PHL often and maneuver my schedule around being on the 788/772 flights. Upgrades are easier and the hard product is infinitely better than the others offered on the route: Oasis or, even worse, the legacy USAirways A321s with no power.

    Plus, it’s much easier to be productive working with all the space in a J seat. Can even have IFE playing in the background, something that was removed from all the other aircraft on the route.

  13. Raja is a former scheduling/ route planning guy.

    Of course he thinks schedule uber alles. It’s what he knows and is “fluent” in.

    I’ll bet he doesn’t wait in lines to see a counter agent at the airport. I’ll bet his calls are skyrocketed to the top of the queue if he calls in. I’ll bet he doesn’t book his own travel. I’ll bet he’s never had an award get jacked up.

    He lives in a bubble.

  14. He is trying to please Parker…and hoping it works. He must have a terrible time sleeping at night.

  15. @Alan is completely right. Especially now with tourist traffic predominant, they only look at price and schedule. Especially flying in coach, one airline isn’t particularly better than the other. All these travelers are looking for is getting to their destination at a time they desire and at the lowest possible price. Service means very little to them. Frequent flyer programs mean even less.

  16. He is right: AA could not compete on the LAX to Asia routes (NRT, HKG, anywhere in China, etc.). And it WASN’T because of schedule, Raja. It was because of poor service, poor in-flight food, relatively poor seating (think of the seating products of the Asian carriers), etc. Raja is saying that reasons for choosing a carrier on a route are “schedule, schedule, schedule”. Yes, schedule is a PART of it. But so is service, reliability, and the “soft offerings” (like food, and entertainment systems, etc.).

    Unfortunately, with “brilliant minds” like Douggie ripping out all entertainment systems (as everyone else is upgrading theirs), and Raja as a rising star preaching “schedule, schedule, schedule”, then AA falls more and more into the bucket of Spirit, and it ends up competing with them for the cheap fliers or it ends up routing everyone through Charlotte so that it can make some extra money.

    Wow. No wonder they aren’t doing so well these days.

    Know what, Doug and Raja? Service really DOES matter.

    EdSparks58

  17. 1. Schedule is worthless without operational reliability .
    2. This thinking is absolutely true for people who do not have a choice or who only choose lowest price .

    For those of us who have a choice , and pay for premium class – then product is quite often the differentiator.

  18. You do have to keep to schedules and have a decent network. But that is only to be in the game (which is important, so I grant that). But then you have to have acceptable hard and soft product to get the premium dollar, particularly the frequent business traveler (which is coming back, from my personal experience). Otherwise, you are just chasing the LCCs to the bottom. And you will never beat them at that. Personally, I think some of them are fine – unless anything goes wrong, in which case you are on your own. So I buy F on the major carriers. But rarely AA.

  19. Raja is now one of the few current senior managers that began his career with L-AA. Sounds like he has been brainwashed.

  20. 20 comments in and not one racist crack – is @Gary moderating things now? Or has @Jackson Waterson signed an exclusivity contract with Stormfront?

    Whatever. American Airlines is in such a sorry state that I don’t even have to go to great lengths not to fly them. They’re not competitive even just on price and schedule.

  21. More ULCC mentality. He’d make a fabulous exec at Frontier. Maybe he could take the Board Of Directors along and then a capable Board at least might be possible that would install officers who try to actually draw customers on superior product, service, and loyalty program.

  22. If schedules are so important to him how can he allow so many drastic schedule changes to an itinerary before departure? At this point – unless I buy a ticket a few days prior to travel – I pretty much assume that the schedule I book on AA is NOT the schedule I’ll get. And the rebooking options are definitely NOT customer friendly. Reliable schedules on AA are a joke!

  23. Vasu Raja You obviously are not ready to run AA or any other airline if you think schedule is all the consumer cares about! That is one of the factors but there are many other including service. Maybe not for those in basic economy but for most others. You need to listen to your customers if you truly want to succeed

  24. Listen y’all- I don’t care what you think. I don’t care whether you’re right or not. I don’t care if the service sucks or schedule works for y’all or not. What I care most is my big fat paycheck and the perks, e.g. fly F free for my 24 members in my family so the only thing I need to care is to please my superior, Doug. You guys can suggest, whine, curse… and I don’t care. The more I screw y’all, the higher I can rise in AA. – Signed: Vasu

  25. @Alan (3rd comment from the top)-
    You are right- because Americans have never known good airline service and are therefore a poor benchmark to cite.

    Sounds like this guy Vasu let’s his metrics dictate everything at the expense of the customer component of the equation. Reminds me of how some mega call centers were managed by these guys.

  26. Alaska Airlines joining OneWorld was the best thing domestically for OneWorld. I avoid American Airlines like the plague as their service has severely deteriorated. Sorry, I’d rather possibly pay more and be treated like my patronage matters. That’s not the case at clueless American Airlines . Too many MBA’s counting the pennies and trying to compete with Spirit, Frontier, Delta and United. Can we say identity crisis American Airlines ?

  27. AA needs to improve in CSVS, Seats and Leadership.
    I had to take a Main cabin flight DFW > LHR > FRA > FRA > DFW, upgraded the seat, was assured it was a much better seat, OMG what horrible flights due to the seats, not to mention the extra cost for British taxes. .
    Went Business class another time, prior Covid, a great experience and awesome flight attendants.
    Went Premium Economy last November good experience.
    This dude is so wrong. Customers pay their Salaries and, just like politicians, they forgot who pays them and keeps them employed.

    Now I researched a flight Premium Economy same route for Winter 2021 Spring 2022, all of the flights are routed thru London on BA. Again with the British taxes. Not acceptable. I have been flying AA since early 80’s between USA and Germany. And what is going on now is just not acceptable any longer.
    Andy recommendations on better airline and seats?

  28. Sounds like he’s focussing on things he can largely control; ie schedules. The customer experience is out the window.
    The laziesy FAs must be cheering!

  29. Had a FA on flight last week that was the epitome of current AA. Had my mask on, in my seat, buckled up and finishing my pretzels when the flight attendant asked for my beverage preference then said loudly and rudely, “ I will need you to put your mask completely over your nose”. My mask was on but had been sliding it up and down to eat the pretzels and my mask only went to the tip of my nose on occasion. Really? Was that necessary?
    Had a great return flight on a brand new FRONTIER 321. No pretzels or beverage but much more relaxing experience.

  30. There’s so much irony with AA’s position that schedule is their main focus, considering their track record for on-time performance.

    Yes, air travel is ultimately about getting someone from point A to point B however, what American is missing is that it’s not mutually exclusive with service. If given the choice between two or three carriers for the same destination, American is always our last resort, even if they have the best schedule. Aside from being unreliable, the overall experience is sub-standard.

    My company switched over to Delta two years ago, after years with American. We sometimes have a connection where it was nonstop before but we could not be happier and it’s all because of the service.

    Seems American is rationalizing horrible service by saying it’s not their main focus. Do they really think the traveling public is that stupid?

  31. Rasa would be perfect managing the bus transit line in any major city with his theory of schedule vs. service. His theory has no credibility to support it, thus it is to be ignored. I am wondering, perhaps the light was off in his closet the morning he made the quote, only to find he had his underwear on backwards and couldn’t think straight. Rasa, by the way, I have found those missing pews from St. John’s Church, they were on my last American flight to Philadelphia. Bean counters quickly forget what C-U-S-T-O-M-E-R spells. As a 2 million mile American traveler (real miles) I find it sad that AA senior management are all wearing blinders. It is the Rasa’s of this world that are killing the incentives for companies to growth and expand. He is not the best candidate to “lead by example”.

  32. Rasa would be perfect managing the bus transit line in any major city with his theory of schedule vs. service. Rasa, by the way, I have found those missing pews from St. John’s Church, they were on my last American flight to Philadelphia. As a 2 million mile American traveler (real miles) I find it sad that AA senior management are all wearing blinders. He is not the best candidate to “lead by example”.

  33. You can whiz your planes around the country on your network all day. I will be flying your competitors.

    What a loser.

  34. I have had some of the worst and and most frustrating experiences on American airlines. After a characteristically unapologetic trip interruption back in 2016, I decided I would never fly them again. They have nothing to offer as far as I’m concerned that is worth putting up with the way they treat you. I get the feeling that somewhere in their employee handbook is a chapter about never apologizing or saying you’re sorry for anything. I have no use for a company that is supposedly in a service industry that knows nothing about service. If you’re looking for me, I will be on Delta.

  35. Well, I fly on the 8th of October, I have a connecting flight in Dallas, I will be very curious to see if I make my connection with out a problem. I am open minded and will update my comment after my first flight. Let us see if they are improving.

  36. I live in a Texas city that must connect thru DFW to get anywhere on AA. Network is good since you can fly to many small markets which Southwest won’t touch. But the schedule is a joke. Even pre covid I always allowed a minimum 1.5 hours for a connection at DFW and preference was 2 hours. AA reservations online always pushes these 40 minute to 1 hour connections and every flight is a panic attack for those who book those tight connections. They either miss connecting or at best have to run to make it because flights are rarely on time. American Eagle is absolutely abysmal. Flight attendants even pre covid were lazy and provided little to no service even in First Class. AA First Class is bad as well now. My home airport also connects to Houston Intercontinental and Denver via United. So why should I suffer thru AA lack of service just to fly thru DFW. No, Raja Vasu, your constantly late schedule and network are not enough to keep my business.

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