American Airlines President Complains About Lack of Competition – With No Sense of Irony

America West took over US Airways, which then took over American Airlines. American and US Airways had each been the combination of several carriers after mergers and acquisitions. And overall the US industry now has 3 large legacy airlines.

And yet the President of American Airlines, Robert Isom, consistently complains about lack of competition – when he is the customer. Back in February he even threated to start his own airline catering company because he’s frustrated by the only two large caterers he’s able to choose from for American.

He told employees in a Dallas Fort-Worth forum on Friday that “the catering industry has gotten really lazy.” He says,

[T]here’s been two companies, Gate Gourmet and SkyChefs, that have basically had a duopoly on the business. And they’ve taken up real estate and facilities and trucks and whatnot, and in most places you have a choice of one sometimes you have a choice between the two and a little bit of competition.

American Airlines is so big, we can’t just go ahead and say we’re comfortable blaming the suppliers. At some point in time if the suppliers can’t do it, we’ve got to figure out a way to do it ourselves. That is something we’re thinking about all the time.”


If You Want a Decent Meal Flying American Airlines Domestic First, Order a Special Meal

Isom then says American isn’t on the verge of starting a new catering company. Ironically SkyChefs was itself started by American Airlines. However he says they plan to “encourage new entrants into the marketplace.”

American isn’t encouraging new entrants into the domestic airline marketplace indeed they’ve lobbied to limit flights to the US by foreign airlines (and foreign airlines aren’t permitted to operate flights between two US cities at all today).

He blames low wages at caterers for high employee turnover rates and notes low profits. He thinks that takes a toll on catering. Nonetheless these seem caterers are able to offer higher quality product to international airlines, and smaller caterers can be used as well (indeed American does cater some premium-heavy flights through other companies).

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. @Gary you should also look back at some of the posts from the LAX food quality scare and quote how many different LAX food providers they had access to at the time. From what I remember it sounded like they were using something like four different food vendors to take up the slack well they waited for their own food vendor to fix the issue.

  2. I assume that in the new no-shame Trump era, logic is an unnecessary amenity eliminated for the convenience of the passenger and that “they (passengers) are all gonna die anyway, so they don’t matter.”
    American Airlines is fully embracing our national plunge to the bottom, with a side-order of complaining all the way to the bank.
    We have a pervasive mood of: “what fresh hell is this?” (Dorothy Parker) when we can bother to lift an aching head.
    So have fun all you one percenters at AA and tongue-lash a few lackeys, if the mood strikes. They will be the ones taking the heat for every thoughtless remark. It’s nifty to watch the lackey’s cower and the passengers suffer.
    American indeed.

  3. Well, spank my butt and call me Darling!

    Oh, c’mon!

    Is he for real? Or am I hallucinating on all those meds the mean ones said I should be taking (hehehe) and I’m imagining this next level ridiculousness, irony, and of course, shameless hypocrisy?!?!

    A blame shifting “Excuse-A-Thon” to “explain” why American Airlines’ (and perhaps the other two of our country’s Big 3 “Triopolists’”) inflight meals suck AND whining about a caterer duopoly being the root of all inflight meal evils?

    Seriously!

    This can’t be happening! I must be dreaming!

    I mean, is it Christmas already for me to gloat (or “rant” – hehehe!) about all of the perils and evils that ALWAYS occur in industries afflicted by a lack of competition – be they monopolies (cable tv/internet providers, taxis before Uber or Lyft, urban mass transit systems, the Port Authority of NY & NJ [or “Port Authorities”], the DMV, etc.; duopolies (applies here with just two main catering companies available to serve the industry network wide); “Triopolies” (as a noted Columbia University law professor who’s an expert in Anti-Trust, Tim Wu, described our Big 3 airlines just last week in an Opinion piece in The NY Times; or of course, the more general expression, OLIGOPOLIES!!! 😉

    I sure would love to!

    But since I’ve done that already “ad nauseam” elsewhere to the point where it really isn’t necessary for me to do that right here, right now…

    …as much as it’s so hard to resist the temptation to go full bore on this next level ridiculousness that shows how incredibly out of touch management at American
    Airlines surely must be with such stunning hubris that they so completely MISS the “Pot Calling the Kettle Black” factor by a margin wider than the wingspan of a fleet of Boeing 747s AND Airbus A380s parked “Wingtip-to-Wingtip” from one end of the super long, 10,000+ foot runway at JFK Airport…

    Let’s just have a Christmas in May party for everyone where instead of another eye glazing, mind numbing, sleep inducing, haranguing of American Airlines for such breathtaking hypocrisy, we just all hoot and holler together about just how mind-blowingly stupid it must be to live in a bubble where an executive perched atop one of the biggest offenders of everything wrong in industries desperately lacking competition as our airlines surely have become a perfect, textbook example of in recent years largely at Robert Isom (and Dougie, Scotty K., Jeff Smisek, et al) hands actually has the “chutzpah” (as we say in NYC) to complain about the lack of compeition in an industry his airline is dependent on the way most of us, and our nation’s economy, is on his competition-LESS, OLIGOPOLIST’ managed industry!!!

    That’s rich…so very rich!

    Wow!

    Talk about insanity…

    But, hey, I promised not to rant about the toxicity posed by industries lacking competition, so let’s just have our Xmas in May party celebrating this DE FACTO ADMISSION by a Major Domo in the airline industry about how industries that lack competition, be they airline caterers, cable tv companies, or anything else where the lack of competition results overpriced, inferior quality services and products, LIKE OUR AIRLINES NOW ARE, are a serious problem we all should be concerned about recrifying ASAP instead of continuing to allow ourselves to be held hostage by a consumer hostile and abusive, “Racing to the Bottom” because of a desperate lack of competition industry that leading experts, plus a recent University study, agree has become a dangerous and toxic OLIGOPOLY!!!

    …because, that’s exactly the beauty of this “Cry Me A River”, blame shifting, Excuse-A-Thon by Robert Isom:

    It’s a de facto admission by an high ranking industry executive that nothing good happens in low quaility, overpriced, customer abusing industries that lack competition.

    Nothing. Good.

    And folks, make no mistake: this is a Christmans gift we should all be happy to have fallen off the back of the cargo hold in the middle of May!!! 😉

    HOLLA!

  4. I think Robert Isom should purchase an airport McDonald’s so he can cater “Happy Meals” and “McNuggets” to all the elite AAdvantage road warriors. Bon Appétit.

  5. @Ken A,

    Funny you mentioned that about McDonald’s meals being served inflight!

    …because, in 1991 (back when we actually had airlines that competed to WIN passengers’ business by seeking to offer REASONS to choose them instead over who can “win” by screwing passengers “best” and getting away with it), and much friendlier skies than we have now, United Airlines actually launched a promotion featuring “McDonald’s ‘Friendly Skies’ Meals” (or “Friendly Sides” meals) on flights to/from Orlando in COACH/ECONOMY for $129 each way, per the “T&C’s” from the airline’s ad copied below!!!

    United’s airborne McDonald’s ‘Friendly Skies’/Happy Meals were so popular, the program was not just extended beyond the original December 15th, 1991 expiration seen below, to 1993 for its Orlando flights, it was expanded beyond Orlando to other markets, and continued until ~late 1990s or 2001, depending on various online reports.

    And yep, this was in coach!

    They may yet still serve hamburgers (but NOT McD’s) as part of their buy-on-board for longer flights – which IIRC Gary has said are actually pretty tasty, too!

    But if they don’t anymore – given how popular it was when done approx 2-3 decades ago, perhaps United might want to bring back this classic McDonald’s blast from the past, even if now, of course, it would be an (overpriced!) buy-on-board “option” instead of the “package deal” for $129 like it originally was when our skies really were friendlier than they are now!!!

    Gary also noted United’s partnership with McDonald’s to serve inflight Happy Meals in a VFTW post on March 28, 2016.

    Actual copy of terms & conditions for United’s McDonald’s ‘Friendly Skies’ meals (which the ad in fact presented with the wording “Fun Facts”):

    Fun Facts: McDonald’s Friendly Skies Meal service is available on meal and snack flights to and from Orlando. On some flights, McDonald’s Friendly Sides Meals will include macaroni and cheese or other fun food instead of a cheeseburger. Meals must be reserved at least six hours before departure $129 fare is one-way based on round-trip purchase for travel Mon, Tue, Wed, Sun to Florida; Tue, Wed, Thur, Fri from Florida until Dec. 15, 1991. Other days are slightly higher. Tickets are non-refundable, must be purchased by Oct. 31, and must be issued and paid for within one day of making your reservation. A 14-day advance purchase is required. Blackout travel days are Nov. 27, Dec. 1 and 2. Sat. night stay is required. Seats may not be available on all flights. Other restrictions apply.

  6. This duopoly complaint isn’t about quality, it’s about price. They would like to pay less for the same not pay the same for more. If they could pay even less for even less, that would be even better.

  7. Parker is looking at slapping a cushion and a seatbelt on the beverage cart and selling it as a seat.

  8. Does anyone really read Howard Miller’s rambling posts? Please Mr. Miller, try 160 characters or LESS.

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