There’s three possible models for service and cost in the airline industry.
- You can be a super premium carrier. Singapore Airlines has that reputation, though I tend to think it’s more hype than substance even though I like the ability to pre-order meals in business and the service is quite good most of the time. Bangkok Airways impressed me in November, meals in coach (I was in business) and an escort and ride across the tarmac for domestic to international connecting passengers.
- You can be a deep discounter. Everything is an upcharge, Spirit charges not just for carryon bags but also water and has even charged a convenience fee for booking online. Ryanair drums up publicity by threatening to charge to use the bathroom, and by saying they’re going to order planes where everyone has to stand up. They compete for publicity and make everyone think they’re cheap. I wouldn’t want to fly them. For some reason people think Souhwest is cheap, but they often aren’t and certainly don’t fall into this camp (I also like my seat assignments thank you very much.)
- You can be somewhere in between, not providing the very best service so customers choose you even at a higher price point, and not being so ruthless about costs, even though folks kvetch about baggage fees the Ryanairs and Spirits of the world underscore that some stuff is still included.
The problem with being somewhere in between is that consumers usually think of air travel as a commodity product, there are some carriers with brand value but mostly travelers see the airlines as equal — so if you invest in amenities it’s a nicer experience for the passenger but the bet has for many years been that it doesn’t earn incremental business, it just erods margins.
And the very idea that cutting costs is the only way to be profitable in a capital-intensive low margin business like aviation is ingrained in the soul of American Airlines. When Bob Crandall was the CEO he told the story of removing an olive from first class salads to save $40,000 and often emphasized the point and shaving costs by claiming to have replaced a night watchman with a sign about a guard dog.
Which is why it’s sort of surprising to see American adding back complimentary alcoholic beverages to coach on their transatlantic and transpacific flights and some of their South America flights.
I’m not sure I understand the value proposition here, beyond a better customer experience. (That should be enough, right? But remember it would fly against the theory that customers still see you as offering a commodity product even when you make incremental investments in comfort, so unless you go to true extremes you shouldn’t earn enough incremental business to cover costs through amenities in coach).
- One possibility is that American really is trying to invest in its products across the board. They’ve introduced pajamas in first class, a culinary partnership with Richard Sandoval (whose restaurants open with really good food, though they get mediocre very quickly), they offer a purchase option for airport meet, greet, and escort services. They seem to treat their top tier elites really well.
- Another possibility is that they get real marketing value out of the move, and that it’s worth doing precisely because they’re in Chapter 11. They can counter any notion that they’re a struggling carrier through the public display of investing in their product, so it’s more about P.R. than the actual inflight product. If that’s the case, then you wouldn’t expect the move to last once American exits bankruptcy.
In the meantime, I think it’s a really great move by American, though I don’t know how many passengers will make the decision to fly American over a competitor on the basis of free drinks in economy, I do know that if I were flying economy long haul I probably wouldn’t want to be sober either…
I would think this is really about AA aligning their product, in some ways, with their JV partners JL and BA. After all, the JVs are supposed to be about making flights metal neutral, but as it is there is such variation when it comes to passenger experience amongst the different carriers.
“though I don’t know how many passengers will make the decision to fly American over a competitor on the basis of free drinks in economy” Exactly!
Pax have trained airlines how to behave…and the internet has been the tool to facilitate that. Most pax will sort by price on Orbitz (or whatever search tool they prefer) and pick the lowest cost fare. If DL is $100 less expensive to LHR versus AA, you know with a high degree of confidence that the average pax will pick DL over AA. (Note that most people in these online miles circles fall outside the universe of “average pax”…we would pick based on what alliance we care the most about, not the free booze.)
I can’t see it any other way than marketing. For some folks, a free drink is a nice touch and may sway them to AA. It also creates goodwill, which creates customer stickiness. AA has been offering double Elite Qualifying miles from December through January. That was a nice way for some to finish the year and also a nice way to start the year. Good marketing in a rough time – it also provides a distraction from the ch 11 situation.
Or possibly they figure during bankruptcy things are going to get so bad they better get the passengers liquored up so they won’t notice the duct tape holding the overhead bins closed.
Could not agree more with @Jim. Strictly a marketing move.
Out of curiosity, which other airlines have comp’ed booze in their TPAC or TATL flights? Singapore? Cathay? BA?
Easy marketing move. I’m not flying United since I was served a snickers candy bar and a Coke just before my arrival at IAD (from FRA). It was bad enough to sit in coach, were they trying to kill me. And yes, EtOH in coach is badly needed if your stuck in coach. How else are you going to be able to eat the food?
Having just “enjoyed” the Richard Sandoval “Huevos Rancheros” DFW-LHR, I have to say that I think these unfortunately began mediocre–very powdery eggs with a too-mild salsa and tortilla strips. The FA reported that my thoughts on this were not alone and she had gotten zero positive reviews of this dish…
When I read the announcement, my first thought was that they had surplus inventory of liquor, maybe as a result of reducing flight capacity, or because they contracted for larger volumes on a long term basis which no longer look saleable at current order rates. So, maybe an inventory problem became a freebie throw in.
With TATL jointventures, harmonization of some aspects of in-flight service do occur as codesharing and “metal-neutrality” increases. Perhaps this is related to the AA-BA relationship since BA does provide this on BA flights and the idea may be to reduce one of the (many) service distinctions that exist between AA-operated and BA-operated flights connecting the US with LHR.
AAdvantage Executive Platinum members get free drinks on AA in coach anyway – both domestic and international. All you have to do is show your card or boarding pass.
I concur with GUWonder about TATL.
however, I think AA would attempt to compete against other Asian carriers in TPAC that routinely offer booze in coach and their food is levels above AA (equally applicable to UA/AC also in TPAC market.)
what makes me stay away from SQ for TPAC is their ridiculous fuel surcharges(300 for 1200USD roundtrip.) Similar problems with poor routing with OZ(addt’l 3 hr layover at ICN and 3 more hours of flying), otherwise I would be flying OZ exclusively for TPAC.
note SQ surcharges are ON TOP of the roundtrip airfare.
No one likes a free drink more than me. Essentially no one, however, is going to pick their carrier based on free booze. When customers are making the purchase decision, what matters is the lowest price on the screen. Free drinks. Size of the movie screens. Baggage fees. They’re all off the table at that moment of reckoning – when they make the buy decision – for the vast majority of pax.
I’ll be the dissenter and say that this could possibly change my mind. I’m a total noob to the points/miles community, and previously when I’ve bought a ticket to Europe from the US, I’ve bought the cheapest foreign carrier. I picked foreign carriers because most of them offer free wine and beer in coach, and the US carriers didn’t (also, the FA/service seems to be better with foreign carriers). If the price were the same, I’d go for the airline that gave me free drinks.
Maybe this type of thinking is a microcosm of the larger management theory at the airline that played a hand in getting AA into bankruptcy in the first place.
I fly LX and LH in Y TATL. Why ? Because the service is better than US, UA, AA, BA. I get a hot towel in Y (LX is real towel, LH one of those hot baby wipes), a decent two meals, chocolate on LX, free booze and pretty good AVOD when I need it. It is almost bearable. I flew AA and UA last year in Y TATL and I said never again. No comparison.
Nice move though by AA. Good publicity.
They are playing and experimenting to see what little things work. Free booze is a no-brainer as it costs them almost nothing. Adding back that olive or improving the long-haul meals a notch or two would cost them a lot more. It is an experiment. This and others will continue, of course. For trans-atlantic or trans-pacific flights, one is nearly always better off with a non-US carrier. Flying on a foreign flag based at your destination is even better. Free booze is a joke and smart flyers don’t drink at FL350+ in any case. Silly!
AA will not be as generous with their “freebies” as some have implied. No “cocktails” included…simply beer and wine.
From American Airlines: “Enjoy complimentary beer and wine when you travel in the main cabin onboard American’s international flights starting February 1. Customers traveling on American-operated flights between the U.S. and Europe, the U.S. and Asia and / or onboard long-haul flights between the U.S. and Argentina, Brazil, Chile, and Uruguay can choose from a variety of complimentary beer and wine options, in addition to the full selection of nonalcoholic beverages”
not sure this is really spectacular news. cathay, air china, china airlines, JAL, and ANA all serve comped alcoholic drinks in coach. i guess AA is getting onboard the gravy train because their coach is pretty much at the bottom of the list
I don’t think people would pick AA because they give you free drink, but I know that I have NOT picked AA in the past because they don’t have free drinks.
For similar price points, I’d pick AA for the booze… helps make those 8+ hour flights in coach a bit more tolerable.
While services were definitely cut to the bone during the recession, I think we are seeing a restoration of benefits at many airlines as financial conditions improve. Maybe not the same benefits that were taken away, but the benefit of cutting everything is that it gives the airlines a clean slate to ask what parts of the customer experience are most important. Free booze on an international flight may or may not matter. We’ll find out, just as United and Delta are finding out whether extra legroom in coach matters.
I for one am very excited about this. Free booze starts Feb.1 and I am flying AA to London on Feb.3 in economy. On the other hand, my boyfriend might not be too excited when he picks me up from the airport and I’m smashed!
I think Dan (post #1) and GUWonder (post #10) nailed it. You eliminate a fairly big (IMO) inconsistency between the JV products by doing this.
A more obvious explanation borrowed from the gaming industry. Get the customer drunk, he’ll forget any bad experience. He’ll remember he had a good time & come back
I’m all for free booze, but agree that it’s mostly a marketing ploy. Hey whatever gets me liquored up is fine 😉
It’s funny that, aside from us mileage/airline junkies, I think most of the public either has “no opinion” or a “negative opinion” of a given airline. They pick based on price mostly and if things go fine on the trip, they seem unlikely to really give the airline much thought.
But the moment something goes wrong – delayed bag, 1 hour delay, etc. – they are ranting to their friends that “I’ll NEVER fly [insert airline name here] again!! Do you know what they did to me……?”
DL has had free beer & wine in coach on international flights since the NW merger. AA is simply matching DL’s policy. Sorry, but nothing to see here.
It’s not enough to sway me one way or the other, but I remember being surprised and a bit angry when I had gotten used to free beer/wine on a foreign carrier and then didn’t get them on AA. AActually, the kind flight AAttendant slipped me a freebie after seeing my surprised look, but still, it was enough to make me frown over AA in my seat for a little while (“Those cheap so-and-sos!”). And I was happier with BA on the return flight when I got a little tipsy due to the copious wine on offer.
But personal experience aside, I see this as more keeping up with the Joneses/partners than anything else.
Flying frequently with One World between UK and US, when I search for flights on BA website the system now proposes both BA and AA flights. In the past, knowing that BA have always given free drinks to economy passengers, and if both airlines have flights in some cases only a few hours apart, even if both airlines gave me the same number of avios and tier points for status qualification, I would always choose BA. Not that I drink a lot, but BA were always more attractive for that extra perk. I would always choose the BA flight.In the future, this may change.
My experience was the same as LBB: when I flew American from Europe, I was shocked (and not in a good way) when the stewardess told me that wine was going to cost me but I still paid for it. It left a bad taste in my mouth (so to speak) and something I recall when booking via a search engine. If I see a slightly higher fare on a carrier I’ve had a good experience with, I’ll take it especially for a 10 hour round trip flight. Is having a much better time for a total of 20 hours worth it? You bet it is! I’ve paid about a $50 fare difference but that keeps in mind not only the wine but also the overall quality of the meal and entertainment options.
I purposely don’t fly U.S. airlines on international flights because they’re so stingy with amenities in coach. I know that if I fly a foreign carrier, I can get a blanket and a glass of wine without getting charged extra. So it is a competitive advantage to at least make yourself equivalent to the superior foreign carriers like Aeromexico, LAN, Thai, Malaysian, Korean Air, etc.
My LHR-DFW flight on 1/28 offered the free beer and wine (no booze). The FA said since they were so close to the 2/1 date that they went ahead with it. Not sure if that was system wide or just that flight.
@cheap traveler Tim – You get free blankets/pillows/cheap earbuds in coach on AA when flying to Europe/Japan/South America. Now you also get free beer and wine.