At an employee question and answer session last week, a flight attendant asked American Airlines President Robert Isom what the airline’s brand identity is now, expressing some confusion between being a low cost carrier and also trying to compete against Delta.
This is a common theme I’ve heard from employees at American Airlines over the past several years – not understanding the airline’s strategy, and so unsure of what kind of service they should be trying to deliver.
In a recording of the discussion reviewed by View From The Wing, Isom explained that they need to appeal to both types of customers,
That American brand has to be something where people say ‘hey when I sign up with American, I know I’m going to get an incredibly reliable product, and no mater the class I book I get what I expected…we have not always lived up to our goals, and it probably always is aspirational given the nature of the business, things break and weather pops up and the like.
Isom previously explained their strategy of following Spirit and Frontier by adding seats onto planes and giving customers less space noting that these no-frills carriers are the most profitable. However American Airlines has much higher costs, and now after the pandemic a more senior workforce than competitors as well as much more debt. They need to earn a revenue premium compared to other airlines just to stay even.
However, Isom doesn’t see it as possible to earn more revenue right now, so the focus has to be on leisure customers who spend less – and on whom the airline should invest less,
Hey our customer base today, the people that are flying right now they are leisure customers…as much as I’d like to say dial it up a notch and get businesses back, we don’t see a lot of corporate travel out there.
To be sure, he says, “there are some people that buy business class or first class for pleasure” but those aren’t the people filling premium cabins. Separately, speaking to pilots, he offered that “network” is what’s key to American’s advantage. I interpret that as being in contrast to the inflight experience.
Put another way, American is serving leisure customers with a downmarket product because those are the customers they think they can attract. However they cannot succeed without higher margin customers, which they can’t attract without a better product. That’s a conundrum this management doesn’t seem to have an answer for.