There Are Two Reasons American Airlines Decided To Drop Flagship First Class

When American Airlines introduces new business class suites with doors in 2024, alongside taking on new Boeing 787-9 aircraft, they’re going to reconfigure their Boeing 777-300ERs to have these seats as well. In the process they will eliminate ‘Flagship First Class’ and business will be the top cabin on the aircraft.

Credit: American Airlines

Credit: American Airlines

At an internal meeting this morning, a recording of which was reviewed by View From The Wing, senior executives at the airline laid out the two basic reasons they made the decision to drop Flagship First Class.

  1. Customers changed. Chief Commercial Officer Vasu Raja suggested that corporate clients had been the most likely to book the product, but companies weren’t doing so any longer. Indeed, he offered that corporate booking tools usually don’t even show first class as an option anymore.

    Vice President of Network Planning Brian Znotins suggested that even “having a product named first class” was a problem for sales – that “businesses won’t generally pay” for it. So they need to offer their best product under a different branding. Indeed, people weren’t buying first class from American. He explains,

    [W]henever you get on an airplane and you get on the 777-300 and you see first class is generally full, most of the time it’s probably upgrades, it’s air marshals, it’s employees.

  2. Product was no longer competitive. Massimo Mancini, Vice President of Commercial Planning and Analysis, argued that American’s first class had simply become dated.

    [The] first class product, which was really great product when we launched it 20 year old plus, was no longer up to par with what our customers were expecting for that type of ticket price that we charge..not many were actually purchasing the first class especially on long haul, and to an extent on transcon.

    That was one of the things were were observing, the product started to get obsolete, we needed to change it.

    Mancini also described Boeing 777-300ER first class as “long in the tooth” and also noted that cabin crew had challenges providing the service.

People weren’t buying Flagship first class. From a business standpoint the question is whether that’s purely a function of the product, or about the customer. There still is a market for international first class, especially as airlines abandon the product or scale it back.

Wealthy customers are more likely to fly private for short haul, and trade down to first class for long haul, and top-level attorneys and bankers flying between financial centers while putting together multi-billion dollar deals do fly first when dropping in on another continent for a meeting. That market isn’t a huge one, but American could have competed: they’d have needed better service standards, better inflight food and beverage offerings, and to include Five Star ground service into the ticket.

Ultimately, while American could have improved the product, they think their new business class – suites with doors – will be like first class. That was the Continental Airlines idea. However passengers won’t have as much space. They won’t have the same tailored service that a low passenger to flight attendant ratio provides. And no one expects American Airlines to offer service levels like Singapore Airlines or ANA, or to offer onboard dining akin to Emirates, ANA or Qatar.

However Mancini compared it to Qatar QSuites, and noted that “what if we take the business class, and we actually elevate it and we make it almost like first class quality” describing first class as “an obsolete concept at this point.”

He noted that Qatar has “chosen the same seat” although that’s a little bit misleading. Qatar does use the same Adient Ascent seat on its Boeing 787-9, and it’s a great seat with traditional exceptional attention to detail that the airline provides. However it’s not quite as good a seat as the original QSuite. Qatar uses a different seat due to the narrower fuselage of the 787 compared to the Boeing 777 and Airbus A350. And seating configurations aren’t as customizable by passengers, and it doesn’t provide quite as much privacy as original QSuites.

Still, the elimination of Flagship First Class shouldn’t be surprising to anyone watching American Airlines. An American Vice President told me – immediately after US Airways management took over – that the new leadership was skeptical of it, and didn’t expect the offering to last.

Two and a half years ago I wrote to expect American Airlines to eliminate first class after its new Boeing 787-9s with business class suites began coming into the fleet. Over the summer I wrote that this was assured. And just before the airline announced it in September I flagged a government filing from American confirming it.

It’s both sad to see first class go and exciting to see the new business product they’ll be introducing. I suspect how I’ll feel about the tradeoff overall depends on whether or not they find a way to keep Flagship First Dining in some form, since American’s sit down lounge dining concept is outstanding – and, in my opinion, currently unmatched in the United States (I happen to prefer it over the Qantas first class lounge at LAX).

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, 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. I’m not sure why there is need to justify and dissect AA’s decision to end longhaul first class. CO, DL and NW as well as US all recognized that there was no value in trying to maintain it, elevated their own business class experiences and ultimately UA jumped in. AA execs continued to play along after their decision to put it on their 777-300ERs and so have resisted writing down their investment in those cabins.
    The most accurate statement today is that AA’s flight attendants were “challenged” to deliver the level of service that first class requires. Global airlines that still have it understand that delivering a product at that level requires employees that take their job much more seriously than their relationship with a union or their own individualism – and that is impossible to do in the US worker context. AA does have many very good FAs but an airline has to have 100% of employees at the top of their game day in and day out to deliver first class service.
    The real challenge is whether AA has gotten the message regarding the size even of its business class cabins and the mindset that they and UA have service towards economy customers

  2. Tim, I agree with your points and I would add one other thought.

    Offering the level of service that first class deserves requires certain staffing. Look at the staffing of other airlines with first class – say, British Airways. Post-COVID, AA chose not to restore first class staffing to pre-COVID levels. It was a clear sign that AA management didn’t have a commitment to offer true first class service. But, then, we have known this for a decade.

    Your assessment that it’s about the money is correct. But, that being the reason why they’re cutting first class sounds bad to the customers who do buy F. So, you make up other reasons – as they are doing. And, they repeat and repeat those other reasons until people start believing them. I think that’s the need to justify and dissect its decision.

    Which begs the question: if BA runs the same JFK-LHR route and charges the same fare (and has superior service and food), what is it that BA is doing that AA is not?

  3. If they elevate the food and beverage onboard to Qatar standards, great – they have a winner.

    Flagship Dining is overrated – and many don’t have time to take advantage. I’d rather a high quality buffet and higher quality drinks in the flagship lounge or a segment of it, and then the better food and beverage onboard with the cost savings.

  4. One of the main differences with AA versus the other premium airlines is that they all have a management employee on board in the form of a Cabin Service Director to ensure service standards are being met. While AA indeed does have many great FA’s, the substandard ones are allowed to run amok, which results in huge variances in onboard service. While AA could easily improve food and beverage (which in reality was barely different in F vs J), it’s very hard to improve culture.

  5. @ Dave, I agree with you and the general ideas you’re laying down here. And with most of the other comments aired here for that matter. Nonetheless, I feel that there is an elephant in the room here. I think we are forgetting the pax vs FAs ratio. With those many new pods being installed on the airplanes you definitely need more FA’s to give an acceptable baseline level of service. It is more a question of arithmetic, in my opinion, because if you minimize the crew ratio, it’s just not going to work out. Lastly, it’s the attitude, stupid. I, once, years ago overheard an AA FA complaining in the galley to her coworkers about having to wear her “stupid “ uniform flagship overcoat. That told you everything.

  6. I know this may sound a bit odd coming from me, but Tim Dunn makes some very salient points. Even though he and I often disagree, he tends to make extremely valid points. So, with that in mind, let me add a couple more thoughts.

    One thing that escapes most people who compare U.S. legacy carriers to airlines such as Qatar, Emirates, and Singapore is that those airlines don’t have the massive domestic networks that Delta, United, and American have. That means they can concentrate their efforts on long haul flying and can cater to it almost exclusively. They don’t have to balance their resources among the various kinds of service a major U.S. airline has to offer. To the specific thrust of the article: Often, less is more. I think American will be better off if it ups its game where it needs to do so.

  7. The US airlines all feel that they offer a great product. However anyone who has flown First or even Business in Emirates for example, as I do quite frequently, knows that there is simply no competition. The attention to detail and consistent and consistently high standards on Emirates, for example, are something the US mindset simply is unable to understand or replicate. Greg, just upping the food ante will not help. The staff need to have the right mindset. If they elevate the food and beverage onboard to Qatar standards, great – they have a winner. Many of the Asian and Middle Eastern carriers have both a high-quality buffet and higher-quality drinks in their airside lounges and then better food and beverages onboard. Cost savings are not an issue when passengers are paying First Class fares. As a European, I appreciate BA, SWISS, and LH in First, but they do not come close to the Asian and Middle Eastern “big boys”. What makes me enjoy them is the cultural similarities I appreciate. The US airlines try hard in Business and First, when it exists, but they simply do not invest enough time effort, or money in their product. And, no, I do not have any commercial relationship with Emirates, save as a frequent First and sometimes Business class passenger.

  8. The COO is right on the topic of booking tools. Pretty much everyone under the executive level are using tools like Egencia with policies in place to block first class(or business class, or anything outside of the average of some lowest percentile of available flights for a date/route combination). Can’t sell it if the tools block it because corps are trying to force cost management on everyone.
    And the executives are either using corporate/private jets or they’re booking directly because they can unlike the rest of their employees

  9. Sadly, AA has been downgrading it’s 1st product for years. I do happen to be one who pays for and takes 1st on the transcon between LAX & JFK although I’ve said since they introduced this product years ago, they advertised it as returning to the past, but failed to have any special training for the F/As who were serving pax up front. Nonetheless, having a single seat/pod has been worth the difference particularly with Flagship Dining, altho AA has yet to re-open the Dining at LAX. Further, on our return from JFK a couple of weeks ago, thank goodness for Flagship Dining as an escape from the packed, overcrowded Flagship Lounge, which, I fear, will be the wave of the future.
    For International travel, since AA decreased the size of the 1st cabin from 16 to 8 seats some time ago with no priority for deplaning from 1st, we fly One World partners – we’re on BA from LAX-LHR next month as they have a proper 1st class cabin, have returned the A380’s to service and the fare is the same. That all said, once AA changes their equipment on the transcon, any benefit of flying them is gone and I’ll grab whomever has the most competitive fare.

  10. thanks, Ghost.
    The big US legacy carriers operate no differently than Wal-Mart or Kroger. When you dominate markets, you have a much better chance of selling everything, even if someone else might have a better product, the larger company gets the nod in large part because of the ability to bid for large portions of business including the domestic market, something foreign airlines cannot do.
    And there isn’t even consistency between business travelers about what they value in premium cabins; in some cases, they just want more space, some exclusivity, and a comfortable place to sleep if they want. US airlines do that just about as good as any other airline. Offering significantly better soft service might not necessarily translate into more business and foreign airlines do it because that is their “calling card.”
    AA will be fine without first class. The only real question is how much money they could have not lost if they came to the realization that FC doesn’t work anymore 10 years ago.

  11. As a former CK, American should have kept at least one row of First and simply renamed it Flagship Business, still could have achieved a decent premium over the enhanced business class. Some will always be willing to pay more for the giant/swivel seats alone (even with the same level of service). There are only two rows on the 77Ws, anyway.

  12. “Indeed, he offered that corporate booking tools usually don’t even show first class as an option anymore.”.

    I’ve worked for multinational companies for the last 10 years. I’ve never been able to book anything but economy, even when flying 14+ hours (which is a crock of you ask me). Thank god I fly a lot of domestic to get my GUCs (even after the devaluation) so I can upgrade on my trips.

  13. I just flew emirates 777 biz class Dubai to Saigon and I’d take American any day of the week over that product.

  14. I’ve flown AA First international three times now to London in the last few months. The best thing of course was the Flagship First Dining at Miami and JFK. Far superior food, menus designed by local celebrity chefs, wines and service than the flight in first offered. It was hard to accept this was AA and not some fine, foreign, first class carrier. Dine well in this, small elite room before you fly and then fall asleep soon as you board. London when you wake up. I hope they can find a way to keep it.

  15. Top level lawyers aren’t flying first class unless they’re upgrading or they decide to pay for the difference between biz and first themselves (and I don’t know anyone at my firm who does that).

  16. Installing these great seats on AA in biz is like “putting lipstick on a pig” …. service will still be delivered by shoddy looking belligerent crews. In appalling polyester uniforms wearing black running shoes and chewing gum. Thanks but no thanks.

  17. Dave and Gravely Point Guy, I mentioned flight crew staffing in an earlier comment. Ultimately, management has a choice: 1) compete on quality or 2) compete on cost. It is absolutely clear that AA management is all about cost. As such, flight crew staffing will always be seen as an expense to shave. As such, to Gravely’s point, we will never see flight crew staffing at a level consistent with a true premium service.

    Now, Tim Dunn mentioned that US-based carriers are not in a position to offer the premier experience seen with non-US carriers. US-based carriers have massive domestic networks that command resources. Whereas, non-US carriers don’t and can (for the most part) pour all of their resources into their long-haul routes. So, it might well be that US-based carriers are never in a position to offer a true premium service (even at the “business” level). And, a tepid Flagship Business or Delta One product is the best we’ll see. We just need to accept it.

    For me, given AA’s reduction of in-flight service level, I no longer look to AA for international flights. That business now goes to non-US carriers.

  18. A flagship business plus product would be great to replace first class. Current international first products take up too much space. Not only the seat space, but the general need for a separate galley. lots of galley space at the front of the plane, but running a food through first class seems disruptive. With business class being the highest class of service you can dedicate less space for a galley at door L2/R2

    For herringbone and reverse herringbone seats, row 1 has a lot of extra room. Make that a business class plus, either charge extra for it, or reward your frequent paid business travelers with it. Perhaps load up a fancy bottle of champagne for row 1 only, and surprise others in the business cabin if it goes unused. I’d even try to see if you can install a separate set of curtains aft of row 1. Board for L2, curtains at Row 1, board early and you have a good product for a celebrity that doesn’t want to fly private.

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