Now that the customer-facing part of US Airways has been integrated into American Airlines, the big question is what comes next?
American Airlines President Scott Kirby has said that integration needed to happen before they could make other changes. The mantra at the airline has been ‘integrate before we innovate’ since the merger.
Strictly speaking integration isn’t actually done. The airline still needs to complete a contract with their mechanics, combine pilot seniority lists (no easy task), and move to a single crew scheduling system. Still, the biggest tasks with biggest customer-facing risks (aside from potential labor discontent) have been completed. And that’s what the airline has been waiting for.
- Kirby has said they’re looking forward to right-sizing aircraft for certain routes, for instance deploying some smaller US Airways Airbus A319s on routes previously serviced by American 737s. (That remains challenging — though possible on a small scale — until workforce integration is completed.)
- He wants to see more unbundling and merchandising (fees)
- And he’s also said “we would have loved to make some modifications to the frequent flyer program,” though I’ve argued that in any reasonable universe it’s too late for major structural changes to the 2016 program although of course they could make changes to the award chart with a few months’ notice at any time.
Here’s what their agenda could be if their goal is to ensure that American has a competitive product that consumers will choose for their air travel needs going forward. Some will worry that I’ve inadvertently ordered these items by their likelihood.
- Finish the business class seat upgrade. American has been offering some ‘fully flat, all aisle access’ business class flights for two and a half years. US Airways has offered it on their A330 aircraft for many years. The conversion of American’s fleet of Boeing 777-200 aircraft has been proceeding slowly and now they’ve ditched their seat manufacturer. Angled business seats simply do not cut it competitively any longer.
- Main Cabin Extra (extra legroom economy seats) across the US Airways fleet. So far they’ve only announced it for Airbus A319s. They need a consistent customer experience across legacy US Airways and legacy American aircraft especially now that they are operating as one brand. (They also need to add seat power to legacy US Airways aircraft.)
- Get internet into legacy American regional jets (and legacy US Airways CRJs), and adopt the lastest, faster internet technology. Though US Airways was late to adopt onboard internet, they spread the technology across the bulk of their regional fleet while American did not. Internet needs to be universal. American was an early adopter of gogo’s technologies, and much of their fleet is stuck with older equipment that American hasn’t shown a willingness to upgrade to the latest technology. That matters because it’s the major reason onboard internet is so slow — demand simply outstrips the supply of bandwidth for a given flight.
- Improve award availability. Recent business class award space bonanza to London notwithstanding, American has been uniquely tough redeeming awards on their own aircraft — it began transatlantic in mid-2012 and then extended to transpacific routes about a year later. Of course the miles remain outstanding for redemption on partners, my favorite current option being Etihad.
- Don’t ruin AAdvantage. The biggest reason to choose American over competitors is the AAdvantage frequent flyer program which (despite adding fuel surcharges to British Airways awards and limited availability on its own flights) is the best among the major US carriers. It has the best top tier, and mileage rates are reasonable including on partner airline redemptions. What’s more, it is a loyalty program not merely a rebate program like Delta SkyMiles and to a lesser extent United MileagePlus. With fuel prices low and fares falling, we’re in a highly competitive environment – that’s the last time you want to cut back on your primary marketing engine.