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?