American Says They Have a Problem With Premium Revenue. Will They Fix It?

by Gary Leff

airline cabin
Aug 15 2018

At a meeting between American Airlines employees and airline President Robert Isom last week, a sim instructor asked whether – with higher fuel prices – there’s an ‘industry initiative to increase fares’ to compensate. Isom explains that American is lagging behind on premium revenue.

However he thinks that premium economy will drive higher performance, and that basic economy and segmentation will “offer our customers what they want to buy, trying to encourage that move up the ladder” and that this will fix things.

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American Reveals Its Plans and Challenges With Airbus A321s

by Gary Leff

american plane
Aug 14 2018

American Airlines is a big operator of Boeing 737s, a workhorse of the domestic fleet. But they’re also a big operator of Airbus narrowbodies, including the larger A321 version. There are 121 Legacy US Airways A321s, and there are 98 legacy American Airlines A321s.

The airline also has 100 A321 ‘neo’ or ‘new engine option’ planes on order. And at an employee forum last week American’s management shared their plans for these A321neos, as well as plans to update the interiors of existing A321 aircraft in the fleet.

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American Will Leave San Francisco’s Terminal 2 and Alaska Will Build New Lounge There

by Gary Leff

alaska airlines plane
Aug 14 2018

American Airlines will move out of terminal 2 in March 2020 and “commence operations in our new Terminal 1 and Boarding Area B”

However Alaska Airlines will not take over the Admirals Club space. The airport wants that for retail. Alaska wants to “leas[e] some of the build-back space for a potential lounge” and may be looking at a two-level club.

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United Introducing New Seat Assignment Fees and New Benefits for Corporate Travelers

by Gary Leff

airplane seats
Aug 13 2018

This is all good news for corporate customers, especially big customers of United. Outside of change fee and reaccommodation waivers, the benefits largely come at the expense of flyers who are not corporate customers. Luckily the extra juice corporate customers are getting here is very much at the margin, a Platinum member’s upgrade will still trump a Gold member for instance.

More seats that require a fee isn’t surprising, but it does make buying up from United’s uncompetitive basic economy that much less appealing. Non-corporate leisure customers should increasingly consider American, Delta, or Southwest.

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Here’s How Much Airlines Made Off Their Frequent Flyer Programs So Far This Year

by Gary Leff

graph chart
Aug 13 2018

Frequent flyer programs create tremendous value for airlines. They’re highly profitable, and have been for years. When United filed for bankruptcy it was said to have to continue flying to support the underlying credit card business. The airline’s first call after seeing the judge each time was to Jamie Dimon.

The issuer of the United co-brand credit card provided debtor-in-possession financing to United, and co-led bankruptcy exit financing. As with other airlines, United received hundreds of millions of dollars in loans backed by future mileage sales to provide liquidity during the financial crisis.

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