American Relaunching Itself as a Premium Airline… and the Challenges of Frontline Service Delivery

While the trend among US airlines has been to cut costs, American has done as much to make investments in their premium products as any US carrier — and has done so throughout their bankruptcy.

Now, many of the investments will take several years to come to fruition. But there’s little question that they are working to position themselves as a top end premium carrier worthy of the corporate contracts (where they already have an advantage) and paid high yield traffic (where there’s less competition among US airlines).

It’s even tough to keep up with all of the product improvements that have been announced over the past year or so.

  • They’re putting brand new international seats into their aircraft: a new first class seat (which will ultimately be offered only on their 777-300s) and a business class seat that is as good as anything offered by any airline, similar to Cathay Pacific’s new business class seat.

  • They’re experimenting giving their flight attendants Samsung Galaxy tablets with connecting gate information, passenger information to assist in providing service, and the ability to write up maintenance items easily.

  • In first class they’ve introduced pajamas and bedding. They’re going to be improving the amenity kit (which is currently like the business class offering) and also improving the wines, they’ve been flying Ken Chase, their wine guy, to events all over the country to promote the image that they’re thoughtful about their high-end product. My wine tastes vary markedly from his, but he’s clearly trying to make the most of a fairly limited wine budget.

  • Their business and first class meals are also much improved. (Even coach buy on board is, as well, I love the Marcus Samuelsson nuts and sandwiches.) The Richard Sandoval halibut is pretty good at dinner, and the Sandoval scrambled eggs over a buttermilk biscuit and topped with creamy poblano sauce with potatoes gratin on the side are good as well.

  • They’ve introduced new meals and the ability to pre-select your meal preference so they never run out of what you want.

  • Inflight wifi will hit 400 aircraft by year’s end, with all domestic widebodies offering wifi during 2013. They’re planning to implement international wireless internet, but that’s farther off (and won’t be added to the 767s).

  • They’re adding an economy product with extra legroom, Main Cabin Extra.

  • They’re introducing new first and business class products to their New York JFK – Los Angeles and San Francisco flights.

It’s seemed to me that they’ve been consistently trickling out information on their premium product investments, from the time they looked likely to file bankruptcy and throughout the bankruptcy process. I’ve wondered whether the benefits of pushing out a consistent stream of product investments — to counter the notion that they’re an airline struggling by virtue of being in Chapter 11 — has prevented them from offering a more comprehensive image that wraps together all of the product improvements into a more coherent narrative of that of a premium carrier.

Over at TravelingBetter.com, JonNYC has described what American is doing as actually being a ‘relaunch’ and that combined with the introduction of a new livery (paintjob) for their aircraft they have the opportunity to introduce themselves with a new image.

In that same thread, he points to a post on Flyertalk by a flight attendant sarcastically and dismissively describing many of the minor changes and training they’e been getting in order to deliver a higher-end product.

This flight attendant describes themselves in their profile as being from ‘Slackerville, FL’ and that’s apt.

And this employee’s perspective underscores just how the overall gambit that American is making will live or die on the service delivered by their frontline staff. The airline seems to be giving their crews many of the tools to deliver a premium experience, but it is the quality of those crews that will derermine whether or not that can be implemented.

United made big investments several years ago in better seats in business class and first, better than what American has had, better inflight entertainment in their international cabins too. But despite investing nine figures they still deliver a product below world standard, because of the service delivery.

American is going to have better business class seats than United will (eventually…) and nice first class seats (albeit not nearly top of world standard) and they’re actually *trying* to offer a real premium cabin experience. But it’s a big gamble with crews and with union contracts that allow them to do little about noncompliant crews.

I can only hope the airline is committed enough that they can at a minimum incentivize the right crews to bid to work in the right cabins.

When United introduced ‘dine anytime’ to first class, many old school flight attendants who always wanted the forward cabin (because it was the fewest passengers and they could get away with not doing much work on a long flight) started bidding on business class instead. The same things could happen with American, with flight attendants who don’t want to provide the expected level of service choosing to work other areas of a flight.

The flight attendant’s post on Flyertalk, if you can cut through the sarcasm that underscores their desire to provide anything but good service, actually offers worthwhile insight into what American is trying to achieve. For instance, flight attendants are getting updates training and education.

They basically conducted a class to teach us how to do things we have always done but with new china, flatware, and a cheesy water glass. They taught us how to table set. Hmmm, never knew how that was done before.

Yes, how one plates food and sets a table matters. On the better Asian carriers the airline’s logo will always be facing the passenger on any stemware or serving dish. There’s a precision to good service that flight attendants might not have considered before, and may or may not be willing to follow through on.

There’s dine-on-demand:

They are telling everyone in first they can have their meal whenever they feel like having it. One of the 40 year FAs who only works galleys asked if they would be removing the cockpit bunks to add more ovens. On the 777-300 there are only 8 seats. On the 777-200 there are 16. 8 might be doable, 16 not so much.

I do miss the button-hole, now gone from napkins:

The white napkin still has no button hole. That is probably the number one thing people complain to me about. (for real)

Some other details of the service:

They have an amuse bouche. The people teaching the training can’t pronounce it and it seems a little on the side of folly to me.

…The salad to order is gone with a pre plated salad in its place. This seems a little counterproductive to what people want because many people opt out of the entree in favor of a bigger salad with more of the side items available.

A pasta bar will be offered with the choice of meat vs. no meat and other items added into it. Will be interesting to see how they cater plain pasta and the various sauce options.

…Sparkling water will feature different types of fruit and not just lemon. …

They stressed no carts in the F aisle …

…. The bathrooms will feature full sized face wash and other toiletry items.

It’s worth noting that the challenges of service delivery do not rest just with flight attendants.

I find American’s telephone agents to be generally good, certainly compared to their peers at Delta and US Airways (and not just American’s Executive Platinum agents, either).

But it’s all the frontline service employees who are relied upon to deliver a premium experience — checkin agents, gate agents, customer service agents.

The magnitude of the challenge is tremendous. American starts with an advantage, I think, over United and US Airways though arguably not over Delta on average.

In the end I expect that if they remain independent and stick to the premium investment program that they will be able to successful deliver a product that’s superior to other North American airlines, with a hard product better than some international airlines. So when making a choice between American and their domestic rivals on some basis other than price, there will be a reason to do so. But that the frontline constraints they face — the final mile of service delivery — they don’t have the tools, no matter what the investments they make — to outcompete the best of their international competition.

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 InsideFlyer.com, 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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Comments

  1. At the risk of sounding mean, there is a fundamental problem with the union seniority system when it comes to F/J cabins in long haul routes. The long haul routes are the most desirable so they get the most senior crews. While in theory the flight gets the most experienced and competent people working, if only takes one FA with a bad attitude to ruin the experience. And in any company with 30k employees, there are going to be a few bad apples who coast along doing only the bare minimum yet won’t quit.

  2. The bluehairs up in F are as surly a bunch as possible. They make it impossible to enjoy the experience of First and act as if they are doing you a favor if you have the temerity to push the call button once during a 6 hour transcon.

  3. I agree and hope they can pull this off.

    While I have flown JFK / LHR dozens of times in AA first, the onboard service was always inferior.

    Best flight I ever had with them (one of best with anyone) was last thanksgiving into MAN in J – not a premium routing or favoured time to fly I bet the FA was not too senior at all result being one of the best service I ever had knocking spots off the same airline’s F cabin.

  4. I think in order to successful their flight attendants need to experience the service for themselves.

    Perhaps AA ought to work with JAL to have it’s flight attendants provide a ‘simulated’ service to the AA crews. Also AA ought to share with it’s staff the customer ratings of airlines like JL/CX/SQ and compare them to their own. Perhaps, just maybe, some minds will open up and the need for change will become more apparant.

  5. I’ll ask the easy question: wouldn’t a rumored marriage with US Airways and their no frills, no service way of doing business (ahem…removing in flight entertainment) be completely counter to establishing yourself as a premium airline?

  6. @travelerMSY – you don’t sound mean at all.

    What was mean was when I was in F from LHR to IAD on UA, and the grouchy dragon FA spent half the flight kvetching so loudly with an NRSA about labor strife that the whole F cabin could hear.

    I fear the AA could be as prone to such. I do not require hooters girls, but somehow the seniority ssytem ensures that FA’s are there primarily for F pax’s misery.

    As far as improvements go, I think it is a great development. I JUST HOPE THAT THE PURCHASING PUBLIC WILL BE MINDFUL.

  7. Still wondering from your original post on the new J seats, the photo makes it look like the seat is somewhere between flat and angled, especially the end where your feet go. Is this because of the optical perspective of the photo, or is it really not flat?

  8. Please AA, join US if that gets rid of the RJs from DCA to JFK!
    You can have 2 versions of an airline; 1 premium for Intl and coast to Coast and 1 domestic
    AA meals in F are MUCH better than UA; although their choice on flights to South America is poor.

  9. While this is all great stuff, I’ve always felt that AA’s smaller international route network was their biggest impediment to growing high-yield corporate contracts. Flatbeds and First Class amenities are nice, but when you don’t fly to Australia, only fly to four destinations in Asia, and fly to less cities in Europe than US Airways, you’re at a competitive disadvantage to United/Delta, simply due to the scale of their networks.

  10. @Robert Hanson I guess we’ll have to truly experience the seat but it is *supposed to be* true flat, the US Airways / Cathay seat essentially and they *say* it is flat

  11. It’s obvious that AA is trying to brand themselves as a premium product for people who want a differentiated flying experience.

    Gary correctly points out that service is a question that remains to be answered and IMHO, the big problem is not just the culture within AA but the culture of employees in the US.

    World service standards are very high for many airlines because the expected standard of service seen in many of those cultures are exceedingly high.

    While the typical employee in places like Japan & South Korea take ultimate pride in their job performance, the typical employee in the US is opportunistic and is instead trying to extract the most amount of money for the least amount of work.

    AA has their hands full in that not only do they need to change the culture of their company, they need to change the culture of the underlying employee hiring base.

  12. I have yet to have a Helen incident on AA. In general, AA’s FAs seem to be much better than UA’s. In premium cabins, the gap seems a bit narrower between AA/PMUA (the PMUA pursers generally seem to take great pride in their work); in coach, AA’s markedly better than either PMUA/PMCO (as an EXP and 1K).

  13. Judging from the tone of many of the responses, maybe the reason you don’t like your service is that you are a tad pompous and condescending and your FAs treat you accordingly?

    The comments about American workers is particularly condescending. By most objective measurements we work more with fewer benefits and less of a safety net than other first world workers.

  14. Wow, someone’s hostile and assuming the worst.

    I take the FT poster a bit differently, given this:

    “The international service class also featured some dos and don’ts with each culture. To me it was a little bit silk purse from a sow’s ear. You can show 100 people the same video and some will get it and others really don’t care about themselves so they are less likely to care about someone else.”

    I also find it unlikely that a flight attendant is going to spend 10+ years on a site dedicated to chat among passengers if they really loathe them.

  15. It is funny that you post this, directly after your post responding to Crankyflier (American’s Problems Won’t Be Magically Solved By Merging With US Airways).

    Bottom line (which you acknowledge): Your bias is in favor of AA. And, it appears, you bear some antipathy against UA…

    But, of course, this is my perspective, which brings my own biases in to play! 🙂

  16. @Lark – actually I rather like United, except for the new upgrade priority. I think United has gotten a bit of a bad rap from frequent flyers, as I’ve written people quickly forget the end of starnet blocking and the loosening of award routing rules that came with the Continental merger

  17. I agree with the take on AA’s phone reps. My experience with them has been good. Recently I had a question about a missing mileage credit on BA metal. Not only did the lady take care of it on the spot, but she called the next day to make sure I saw it in my mileage summary.

    However, labor strife and union talk dominate other areas of front line service on AA. From pilots to FA’s and others, these issues occupy their minds and trump any notion of quality customer service.

  18. I don’t believe the typical employee is opportunistic, overpaid and lazy. Right now, in this economy, people are doing the work of 2 and taking pay cuts! In Europe, Companies give their employees 4 day work weeks and 4-5 weeks vacation a year. American is trying to better their product for you and train their people to increase their service levels. Give it a chance! Opportunistic…you say? Who doesn’t want to improve themselves and want a better job and move up in the company?

  19. Expose FAs to how things are done elsewhere. (I think Mike has it right.) Make them fly JAL or Cathay. Bring back some pride in doing a job properly and show them how lazy they’ve become. FA unions do a brilliant job of breeding bitterness and a culture of entitlement by rewarding seniority rather than performance. Give better pay to those who perform and fire those who don’t. Sadly, non-Asian options for comparison within oneworld are limited. (The cows at BA aren’t going to teach anybody anything.) The folks at LX and even SK (yes, poor beleaguered SAS, at least longhaul in biz) could teach AA FAs that service isn’t just an Asian thing. Whatever AA does, it shouldn’t let its FAs fly UA or US. That would only give them ideas about how to do even less.

  20. AA phone agents are clearly superior to those of DL and USair, and what about then UA/CO hangs up on you or takes 3 hours to answer the phone=on the elite line. AA, dare I say it is almost as good as the old Midwest housewives/professionals of NWA who know those systems backwards and forwards. DL except for the very top elites is a disaster and those outsourced employees have no power and can do nothing for you.
    Now my experience with AA in F is quite fine, I am EXPL, and as an American I don’t want those subservient Asians (who are usually not staffing Chinese carriers) to be honest because that is not service that is subservience and I am sure THAT is what many F passengers here really want from these women. Lets be honest…

    Moreover, in our “ownership” American society, funny how the successful businesspeople here complain about :
    “While the typical employee in places like Japan & South Korea take ultimate pride in their job performance, the typical employee in the US is opportunistic and is instead trying to extract the most amount of money for the least amount of work.”
    Why isn’t this the way we all became successful business people and not struggling artists? Isn’t that the way a successful American behaves?
    Oh, the hypocracy here is sometimes just too much to bear.

  21. Having just recently flown American from DC to Texas with my whole family – they have a LONG way to go to be a premium airline. They might start by offering anything to economy customers for snacks. As a Delta GM I’m used to first-class basket, or at least some crisps. America gives you nada, but they do have remarkably cranky ground and flight staff to make up for it. 🙂 Good luck American, it will be a very, very long climb. Looking forward to my next Delta flight with much increased enthusiasm.

  22. Would certainly be interesting to see if a U.S.-based carrier could profit from positioning itself as premium.

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