How US Airways Management Learned the Importance of a Premium American Airlines Product

American Airlines flew its inaugural Airbus A321T premium transcon flight just a month after its merger with US Airways closed. And this flight symbolized everything that was different between the two cultures.

Legacy American had committed to be the only US airline offering three cabin cross country service. Meanwhile when US Airways emerged from bankruptcy with America West leadership at the helm, its new stock ticker was “LCC” for low cost carrier.

With that same management running American the new premium heavy A321T inaugural flight barely had any festivities, and no speeches, prior to departure. Onboard then-Vice President of Marketing Fern Fernandez, a legacy US Airways executive, told me he didn’t expect first class service to last.

Not only is three cabin first class still here, but in December US Airways veteran and current Senior Vice President for American’s LAX hub Suzanne Boda told me she wishes she had more than 10 first class seats on each flight to sell.

Indeed American’s focus on a strong international business class and great treatment for ConciergeKey members is clear, even if their commitment to a quality domestic product is not — they’ve clearly learned premium customers matter, but seem to think the only routes those customers fly domestically are New York JFK – Los Angeles and San Francisco.

American Airlines CEO Doug Parker described some of the evolution in American management’s thinking since the merger at last week’s employee question and answer session in Miami. He laid out how they came in as US Airways management thinking they knew how to run American Airlines better – and cheaper – than legacy management. But they learned they were wrong. And they learned they needed to be a premium airline.

No one is trying to take this company, the American Airlines brand, and turn it into US Airways. And I know that somehow that perception has come across, but it’s absolutely not true.

I told you the major objective..was to have a world class product. Trust me, US Airways never would have had Flagship lounges like we have now at American. They never would have had the kind of aircraft we have now at American. They wouldn’t have the sales force that we put in place at American. Our objective is to have a world class product, and it’s nothing like what US Airways had and it’s better than what American had. That’s where we want to go and that’s where we’re moving. I want to make sure there’s no mistake about that. Nothing about this merger was meant to be ‘oh let’s go take the American product and move to the US Airways product.’

To the contrary – and again there may have been some of that at the start, I’ll be honest about that. When we came in, I know, some of us came from US Airways thought “Oh gosh there’s some stuff American does you don’t really need to do and you still get the same amount of revenue.” We found all that to be not the case because it’s such a different airline.

So indeed things like we came in early and took a bunch of meals out of airplanes, we’ve now gone and added back a lot more than either airline had before. Things like sales force, we came in and reduced a lot of the sales team, thinking US Airways didn’t have nearly as many as American we don’t need as many. We’ve now gone and added back a lot more than we ever had before. So to the extent that was true before, and I think it was overstated versus reality, it’s certainly not true now.

Our objective is to go have a world class product… I know it’s better than it was a few years ago, and it’s gonna get better over time.

When US Airways management took over they cut a lot of meals and the meal service they put in place was downright bad. Less than a year later they were increasing their investment in meal service.

Kosher for Passover meals aside, I don’t think they’re back to legacy American standard domestically. And Project Oasis to take American’s current domestic fleet and give it the 737 MAX interior is a step backwards.

Lie flat direct aisle access seats was a decision made prior to the merger, though US Airways management never got enough credit for doing it on their Airbus A330s early on.

However they’ve been committed to rolling out improved international business class (Flagship) lounges and first class dining. They’ve continued to take delivery of (and order) new aircraft.


Flagship Lounge LAX

Parker has promised that the airline will never lose money again. A strong product is necessary to earn a revenue premium. It will be interesting to see what management’s commitment to that long term profitability looks like when the first downturn comes, although they certainly say they’re committed “to the long game.”

Of course former America West-US Airways-American President Scott Kirby is now the President of United, and while they’re about to open their second Polaris lounge they seem to be slow walking the transition to direct aisle access Polaris business class seats and shaving the amenities. So I’m not yet convinced United has learned the same lesson.

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. He talks out of both sides of his mouth. ExPlat are chopped liver these days.

    I had to accept an 11 hour layover and be in coach for the domestic leg of MCO-MIA-MAD award with Tatl in IB in J. Even though there were 4 lbetter flights on MCO-MIA. Mint only coach but 11 hour connection.

  2. Unrelated (since you don’t have an “ask VFTW).

    International AC flight via YYZ was cancelled. AC rebooked next day on AA (Y fare code). Checked in at kiosk and was told that 2 items could be checked in with $0 fee. Arrive at desk and was told to pay ($65) for two items. The AA rep said that original ticket with AC was not in Y and thus baggage must be paid for. I was under the impression that Y is Y even the ticket was rebooked by another airline. Paid $65.

  3. @ Gary — Why would they want more than 10 F seats to sell on the A321T? It’s half-filled with employees every time I fly it.

  4. Not to mention the elimination of F checkin (Other than flagship) at LAX. And what about the CK who needs to fly a 737 Max because of a change in plans and is stuck in the back, will they have a different bathroom for them?

    They improved F food, then made it crappy again.

  5. You mean to tell me people don’t like flying in old, loud, beat up airplanes? No way. Come on, people like a good hard product. They will overlook some mediocre even lousy employees if their seat is comfortable, and their flight is on time. The problem why USAir was terrible from 2005-2015 was because they just didn’t have anything positive to draw customers. Not the cheapest, beat up planes, lousy service, lousy on time stats, minimal/no IFE, etc. Who would pick that if there was another option? Exactly, no one.

  6. Gary, interesting read, but I have to doubt the ten F class seats wish we had more comment. IME F on JFK to LAX and SFO usually has a fair share of non-revs and service standards account for that.

  7. I’m not saying they wish they had more than 10 F. If they really wished that they would at least consider it. I took it to mean they’re happy they have F, and it’s possible there are flights they could sell more out of LAX [especially now since price is often lower] but that doesn’t mean they’d do it since I doubt the demand is there for SFO flights.

  8. Gary–I was just talking about the inaugural A321T flight with a colleague today and showed him my pic with Fern and my selfie from my seat and there you are in my pic a few rows back. That was way before I started reading this blog.

    But to the topic at hand, Parker is a horrible human being. All of the “investment” into their “premium product” is both underwhelming and coming at the expense of the Y cabin. E.g. pleather seats as far as the eye can see (even in Y on the 77W); 10 abreast 777; 9 abreast 787; 737 Max. By the way, the Dreamliner and Max are fantastic planes, but they are miserable to fly on from a passenger perspective because of Parker’s penny pinching decisions.

  9. Actions speak louder than words. Look at the 737MAX – cramped seating, micro-sized lavatories, no IFE. I doubt anyone would consider USdbaAA a world class airline if they have to take a 737MAX to connect to their long haul J flight.

  10. Excuse me!!! Maybe I’m stupid, but how can one claim they’re seeking/promising to become a WORLD CLASS airline while every effort is otherwise devoted to copying the worst examples of passenger abuses…er…service (or lack thereof) from the Allegiants, Spirits & RyanAir’s of the world for all but a handful of super elite flyers?

    That’s NOT world class – it’s full-on ARROGANT & ELITIST.

    Call me crazy, but that would be as preposterous as The Peninsula Hotels saying they’re among the best hoteliers in the world by toutng a handful of gorgeous, super luxe, spectacular suites with “White Glove” service clustered on the top 2-floors of their properties that are only offered to a select group of preferred guests, while everyone else lacking “status” is stuck in dumpy rooms elsewhere in the building with service on a par with a Motel 6…

    Either you ARE WORLD CLASS for EVERYONE – or you’re NOT.

    There’s a difference between being “WORLD CLASS” to just a handful of flyers (typically 15% or LESS) while the remaining 85% are treated like dirt with tiny seats aboard cramped planes that otherwise closely resemble the cabins and flying experience found on RyanAir, Allegiant, Spirit or Frontier…

    …and actually BEING WORLD CLASS!

    Oh, puh-leeeeze! Just be truthful Dougie…at least you’d earn some “Gold Stars” for honesty…

    I mean, seriously, the economy sections on your airline are so awful, you don’t bother to fly them even when the planes are brand new like those atrociously bad, stripped down, seat-back IFEless, Boeing 737-8MAXes with the toilets of misery (as opposed to the even crappier, dilapidated legacy US Airways planes everyone HATES)…

    Heck, it’s practically easier finding Waldo in the economy sections aboard those flying 737 abominations that aren’t even worth your time and trouble to fly than finding you ever seated in a 30” pitch row among the fare paying passengers who make those juicy, hefty, many millions $$$ stock paydays of yours possible…

    World class…yeah, right! Not while you’re there anyway…

    Just sayin’…

  11. The one and only time I flew LAX-JFK on a A321T, I selected the redeye flight based on the theory that, with a lot of premium seats up front, I had a better-than-average chance of scoring a trans-con upgrade to business (I’m SAN-based and EXP). Nope: For a ticket bought 5 weeks ahead of departure, I was #7 on the list at boarding and I sat in the back, without even change to exit row or bulkhead possible.

  12. I think you sorta “did it again” here Gary with the title – so clickbaity.

    That said, I think it is true that US Airways management learned something while coming into AA. And I hope that this is an insight United notices, because, lord knows they need it – they didn’t waste any time updating the 777-200s to have NO seat back entertainment and only two outlets per three seats in economy while leaving J with a 4 across middle section.

  13. I suppose the problem is that outside of “Premium” passengers, AA couldn’t care less about their flying experience. While they can get away with this when no LCC is in direct competition, they squeeze customers wherever possible on any noncompetitive route. “Premium” pax get lots of benefits, but the majority of fliers get ever worsening seats, service, and frequent flier benefits. Overall, this just makes for a miserable experience for economy passengers. I truly wish that I could summon some sympathy for AA, but the continual drive to make things worse for most customers has erased any remaining fondness for American.

  14. AA is trying to make Economy so miserable on the new 737Max, the 787’s, and the 777’s in hope that the next time people fly AA, they’ll pay extra to fly in Premium Economy, and/or burn more miles for Premium Economy (and when Premium Economy Awards hit, expect “low level” Business Awards, as well as planes equipped with First to also see Awards for First increase… Delta already charges more for Economy Comfort Awards). It’s not if this happens, but when.

    With Spirit, Frontier, and European ULCC’s like Primera Air and WOW, AA has 0 incentive to improve Commodity Class (“regular” Economy).

  15. When I fly US Air in coach, the seats had better pitch and width than the current AA standard. The decline in coach experience in AA is material.

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