American’s New Domestic Product is So Bad Their CEO Won’t Fly It

Back in November I flew American’s inaugural Boeing 737 MAX flight. The plane has American’s new interior that’s been controversial, offering less legroom than ever before. It’s the new standard domestic product for American.

  • They had planned to offer some seats with just 29 inches from seat back to seat back.
    There was so much outcry they backed off of that plan, but spacing is still down from 31 inches in economy to 30 inches. And they did that by offering fewer ‘Main Cabin Extra’ extra legroom seats. So there are fewer seats on the plane available to escape tight pitch.

  • Even first class has less legroom. And the lavatories are smaller than before too.

  • There are no seat back video screens. And the seats don’t recline as much as before.

  • But there’s faster satellite internet and larger overhead bins.

American’s CEO Doug Parker thinks it’s weird that I broke the news he told employees in a closed session that he hasn’t flown the new 737 MAX even though it’s the carrier’s new standard domestic product for the whole fleet. Months later he still won’t say that he’s been on it.

American Airlines President Robert Isom says he has flown the product and has even gone inside the aft lavatories.

Isom explains to employees in a closed session that they’re copying the worst products in the country, Spirit and Frontier.

[T]oday there is a real drive within the industry and with the traveling public to want to have really at the end of the day low cost seats. And we’ve got to be cognizant of what’s out there in the marketplace and what people want to pay.

The fastest growing airlines in the United States Spirit and Frontier. Most profitable airlines in the United States Spirit. We have to be cognizant of the marketplace and that real estate that’s how we make our money.

We don’t want to make decisions that ultimately put us at a disadvantage, we’d never do that.

This isn’t just the interior product on new Boeing 737 MAX aircraft. It’s the new standard domestic interior for American Airlines. They’re retrofitting existing planes with this interior, even going so far as to remove seat back entertainment screens from planes that already have them.

Since this is the product American Airlines intends to be offering customers on domestic flights for years to come you would think that the Chairman and CEO of the airline would want to know what the product even is.

That’s why it was newsworthy that Doug Parker hadn’t flown the product, months after it was introduced into the market.

They’ve been flying this new product for six months now. So I reached out to American Airlines to see if he’s finally flown one of their planes with this interior. Back in January I wrote that he needed to fly it if only to be able to say that he has.

An American Airlines spokesperson responded “At this time, we’re going to decline answering.”

American’s strategic objectives include “deliver[ing] value to all customers, especially premium customers” (or as George Orwell wrote, “All animals are equal but some animals are more equal than others”). While the airline is focused on ConciergeKey customers and international business class they are clearly not focused on their domestic premium product because they’re renovating planes to give first class passengers less room.

If Doug Parker actually spent time flying the MAX he might understand the product his airline is offering, that he’s driving his product towards what Spirit is offering instead of driving towards a quality world class offering.

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 »

More articles by Gary Leff »

Comments

  1. actually why bother fly AA Eco? If you fly so substandard voluntarily and even paying for it, you have lost the right to moan on almost everything! Normal sensible flyers would not fly with them, if you still have the least dignity for yourself!

  2. He probably won’t ever fly it, because he knows it’s awful, but they are correct that customer demand says awful is acceptable as long as it’s cheap.

    I don’t know what percentage of AA revenue comes from frequent flyers, but AA does know and they must believe that catering to the casual flyer who wants low fares is the most profitable future. You can’t be all things to all people and they are clearly choosing to move towards a cheaper product at a cheaper price.

  3. You have successfully presented the real story here, by identifying a corporate clique willfully oblivious to the marketplace beyond the infrequent, casual flyer.

    As I still remember my first flight in first on an American 707 Astrojet from ORD-IDL (Idlewild) in April, 1959, I would suggest having Parker sit in just the coach seats of the 707 to experience what defined the comfort of travel. Or, just have this wiz of a CEO just use the new 737 coach seat as his office chair.

    Inevitably, arrogant “public be damned” CEOs like Parker will invite intervention by the U.S. Surgeon General and legislation by Congress to protect the health of customers. So much for the “customer experience!”

    FYI-must be a common characteristic in airline CEOs, as ex-Delta CEO Richard Anderson is faltering and failing in his new role as CEO of Amtrak.

  4. This again?

    AA’s high value customers won’t be sitting in the back of the 737Max – they’ll be in F or MCE. The once a year flyers will – and won’t care – because all they care about is price.

    Outside of the blogosphere echo chamber – no one makes a ticket purchase decision based on whether the plane has seatback IFE or not. They may complain a bit about “old planes” – but next time that ticket price is $5 dollars cheaper than the competitor, they’ll buy it.

    Removal of seatback IFE on domestic flights is overwhelmingly a positive thing if you ask me.

    Gary again demonstrating why it is a good thing he’s an internet blogger, and not an airline executive.

  5. That looks brutal from a comfort standpoint. But it’s not just casual flyers they’re going after with these changes. Corporate travel plans don’t typically care if you’re an elite with a certain airline or that there is less legroom on a cheaper fare. You’re usually expected to fly the cheapest option even if it’s Spirit or Frontier. AA has to compete. I’m a Delta flyer and as a small business owner I pay for my own travel. I make that decision to pay more. Less and less flyers are afforded the option of choosing their carrier.

  6. Thanks for the free Plat status Aa. Maybe I can use it to match other carriers. I’ll still only fly you when you have the shortest routings; and with 36 inches in first, I’d rather sit in economy exit rows. So you lose revenue there. It’s MINT to NYC and BOS

  7. Love your convoluted argument on how this is relevant. It’s not. It’s recycled. It’s click bait.

  8. Like K says, this is just recycled garbage in order to drive clicks.

    Gary, you’re better than this. At least I thought you were.

  9. Actually, I just had a thought: GARY IS EXACTLY THE SAME AS PARKER!

    He doesn’t listen to his “customers” – aka us. He keeps rehashing the same old tired crap over and over again to drive clicks/ad revenue… because like Parker, he knows who his *real* customers are.

    And it’ ain’t us.

    The irony is delicious.

  10. I bailed on AA , as an ExecPlat and after 3.8 million miles, and got 1K on UA. Time will tell if that’s smart or dumb. So far (only 6 months in, however) my UA experience has been excellent. I’m DFW based so flying UA is somewhat of a challenge.

  11. AA has become trash. What I would like some commenters and bloggers to acknowledge is that many of us live in places where we have almost no choices.
    Almost every flight is via an unwanted hub which often adds an extra five hours to an already long trip. American, United, Delta each offer two flights a day to their favorite hub (not mine!) in order to connect on to another of their cities. The flights are often quite early or after 6pm.
    But, hey, we have ONLY these miserable choices.
    Or, we can fly Southwest. No big seats there. Their hubs are not lovely options either. And, wow, they usually offer two fiesta boardings per trip.
    AA may focus on big spenders in the first class international market, OR they may vow and declare that customers want cheap seats, but the larger truth is, many of us have NO choices.
    AA, United, Delta provide crumbs, Southwest provides idiosyncrasy. And yes, there are a couple of oddities. That’s it. We used to have some real choices. Not any more.
    Oh sorry, there is one other choice which I take more and more often: stay home.

  12. Doug Parker has not tried the “new” product because he can’t fit his oversized ego, head and butt into an American coach seat.

  13. @Bob – totally misses the point AA is reducing space for first class and main cabin extra. They are not catering to their high revenue customers.

  14. @Rich – Since the very beginning this blog has been about whatever interests me. I have never presented it as anything else and there is no charge to read.

    Suggesting that because you aren’t interested in this post I am somehow failing totally misses the poiht about what the goals are here.

    In any case my point is not ‘Parker isn’t listening to customers’ it is that the airline isn’t delivering a quality domestic product and isn’t focused on doing so.

    I guess your counter is you don’t like this blog. Opinions, as they say, vary.

  15. Dear American Airlines
    Whatever happened
    to More legroom throughout Coach?
    The ability to fit through the door to use the onboard lavatory
    Edible food on board even to purchase
    Ability to redeem miles at Saver Award levels
    A customer relations phone line for elites to solve concerns when there is a problem
    Empowered front line agents
    I don’t want to check in at a kiosk as a first class passenger I want an agent
    Internet support in another country which can actually help customers to complete their purchase
    You have destroyed a once solid good airline with greed arrogance and neglect
    Yes I have left for other carriers that still cAAre
    No longer a race to the bottom you are the legacy carrier@ the bottom and its a disgrace

    Signed a from a former decades long loyal customer

  16. RE: AA has become trash. What I would like some commenters and bloggers to acknowledge is that many of us live in places where we have almost no choices.

    @Cassandra,

    Have no fear! I have, and will contnue to do so here, and elsewhere, post in readers’ comments sections, exactly what you noted above in your post!

    Yes, our country is afflicted by a desperate lack of competition in the airline, and several other industries, that results in low quality, overpriced goods and “services”.

    And that is a terrible thing.

    What’s worse, though is that our country is also afflicted by many liars who say this desperate lack of competition is a good thing – because they’re profiting from this crap, while also NEVER having to fly in the horrible seats/cabins they falsely claim are perfectly fine (a good example being American’s CEO Doug Parker who is taller and broader [not “fluffy”] than most of us and most assuredly would find the seats too small to sit in for even an hour, let alone 5-15 hours)…

    …and/or badly misinformed folks who defend this crap, if only because they’re just…badly misinformed…and somehow believe NOT having competition is “no big deal”.

    Make no mistake! Competition is a good thing…and hopefully soon, when our country returns to its senses, we’ll elect leaders who will appoint competent people to lead the Department of Transportation, and who will vigorously enforce existing anti-trust regulations/laws, or seek to break down the trusts that now control our airlines and are using Oligopolist business models to capitalize/exploit the lack of competition that currently exists in the airline industry.

  17. If Parker is right, then there are enough consumers who whose only interest is price. If he’s wrong, then he won’t have enough customers to justify his choice. Since nearly all air travel is miserable, it’s hard to say Parker’s bet is a bad one. AA has been a bad service/bad aircraft standout for awhile, so I’d bet that making it marginally worse won’t hurt its bottom line. At some point, though, some airline may decide to distinguish itself by keeping low fares and making the experience less awful intstead of more awful. And here’s my question: Do you think that the airlines know how many of their customers hate their product?

  18. Cramped seats and poor award availability drove me away from AA many years ago. Looks like nothing has improved since. I’ll stay with UA. Upgrades to first don’t always clear, even for 1Ks, but they still offer plenty of Premium Economy seats and I’ve almost always found saver awards when I needed.

  19. Common sense would normally suggest that if the CEO doesn’t “buy” (or in this case, fly) the product her or his company sells, then neither should anyone one else buy/fly the products most of our airlines now sell.

    Alas, common sense seems to be in short supply these days… 🙁

  20. This will just make me stop wanting to fly American and stop collecting my miles there. I’m sick of trying to squeeze myself into those bathrooms which are undignified. The seats are becoming undignified and immoral to be pushed up against some stranger like that. All of this indignity just so American can make some more profit? Really? Seriously? I’ll just start collecting my miles on United and Delta.

  21. @Rich – glad to hear you are one of Gary’s customers, I’m sure he appreciates your clicking on his card links. I just thought you were a whiner.

    I live in Dallas, and am lifetime plat. AA offers more flights to virtually every place I fly. But I am so disgusted with the destruction of my mile value, the crappy service, and degraded product that for me to chose AA for any particular flight, they actually have to be either the only alternative or cheaper – ties go to competitors. I fit neither the mold of frequent business traveler, nor once a year chump. But my 8-10 round trips a year add up to a reasonable amount of revenue. We used to put $50K a year on an AA credit card, now it’s zero. My goal to give as few $’s as possible to AA.

  22. If this isn’t what the public wants, then why is Spirit the most profitable airline in the US?

  23. RE: If this isn’t what the public wants, then why is Spirit the most profitable airline in the US?

    Because they see low ball, too good to be true (for most flyers) base airfares on an internet search engine, and:

    1.) Most people are neither road warriors nor avgeeks, and as such do NOT spend much, if any, time reading industry focused blogs/news/magazine stories to know about Spirit’s fee heavy pricing model that by the time the last charges are paid, can easily be as much or even more than fares offered by the Big 3 legacy airlines, or others such as Alaska Airlines, Jetblue or Southwest;

    2.) As PT Barnum said, “there’s a sucker born every minute!”

  24. I have status with AA this year but I won’t next year. I fly whomever works out to be cheapest and most convienant. Except Spirit or SW.

  25. Allegiant’s business model includes a larger percentage of hotel/land packages for leisure travel that allow for higher markups/margins than most other airlines offer in addition to its Ultra Low Cost Carrier a la carte pricing/business model.

  26. I remember when I sought out American because they were the first to offer “more leg room” seats. I am super cheap in general, but I look for good flights: the times I want, the connections I want, even if it costs more. Most people I know buy the absolute cheapest flight, no matter what they have to go through. Even if it’s just $20 cheaper. It really is kooky, given these very same people spend that much in a moment buying expensive wine or drinks which I would never do, paying for wi-fi on the plane, buying food on the plane because they didn’t plan ahead. I don’t get it. If I am helping them choose a flight and point out “this one would be way better and it’s only $30 more”, they’ll often take it. So they need their instincts to be overridden. Of course when I’m paying for the ticket they have all kinds of requests!

  27. Remember, the largest shareholders of AAL — I.e., the owners — are T. Rowe Price Funds, Vanguard Funds, Oakmark Funds and Primecap Funds. They together account for about 20% of share ownership. And the largest individual owners of AAL are Parker, Isom and the former CEO, Kirby.

    If anyone thinks anything will change in the foreseeable future, think again.

    But just for grins and giggles, buy some shares of AAL, go to the annual meeting of shareholders and raise the issue.

  28. We are seeing the physical manifestation about the income/wealth disparity in this country. The richest have gotten richer at a much faster pace than the poorest and middle class. What do you expect something as routine as travel to look like? The sections for the poorest and middle class reflect their income disparity. Improve the purchasing power of the poorest and middle class, and they will purchase more. I don’t mean to post this for political reason; rather, I mean to show that income disparity has far-reaching consequences.

  29. The new reality: Air Travel is just faster bus travel. Thank goodness that highways and motor vehicles are comfortable and internet accessible. Between the TSA, the small airplane seating, a boarding and de-boarding process straight from the 18th century, and the high costs of group air travel, only recently mitigated by low cost carriers such as Spirit, Frontier, etc, a six hour road trip is a suitable alternative to 2 hours of flight time, or else every hub in the country would be jam packed more than it is now.
    I think the best days are now behind us. But oddly, I also think that there is so much room for improvement, it will get better and more affordable. Unfortunately, we are the test subjects.

  30. The reason Spirit and Frontier are growing – the main airlines don’t provide a superior or differentiated product.

    It’s the wrong conclusion to determine consumers want minimal legroom for the lowest possible price.

  31. @Gary: Perhaps I’m wrong, but first and business aren’t getting worse as quickly. Plus, I imagine most first-class flights on domestic flights aren’t actually people paying the first-class price. If they’re mostly people getting upgrades, that would explain the downward pressure on quality. Lack of purchasing power is everything. If American were flying full cabins of revenue first-class fliers on each flight, you wouldn’t see a drop in first-class quality; American would be raising fares at that point, not dropping quality.

  32. Well. Making an effort to fly Alaska Airlines for now. When they go down the rabbit hole of revenue requirements and basing miles on spend, I will dump them as well.

  33. @Sam — ” I imagine most first-class flights on domestic flights aren’t actually people paying the first-class price. If they’re mostly people getting upgrades, that would explain the downward pressure on quality.”

    Except that it was mostly upgrades 10 and 20 years ago when first class was better… in fact paid first used to be just 10% of a domestic cabin.

    Now Delta is generating cash for 2/3rds of its seats, American for half of its seats.

  34. @David Kaplan “It’s the wrong conclusion to determine consumers want minimal legroom for the lowest possible price.”

    The problem with that unsupported statement is that “minimal legroom for the lowest possible price” is what they buy.

    Did you bother to read Gary’s numbers (above) on the percentage of first class that the majors sell on domestic routes?

    Ryanair is the end-state.

  35. Last week I flew transcon on AA in an A320 in F. No IFE, no in-seat power, indifferent service, crappy snacks. On the way back I flew on AS (former VS plane) on an A320. Cheaper ticket price, $99 upgrade to exit row, hours of free TV and movie on a snappy high-def screen, free food and snacks on demand through IFE ordering, and a much better service attitude from FAs.

    I’m not a once-a-year flyer. Diamond with DL and Exec Plat with AA. I decided a few months ago to say good bye to AA, and last week’s experience confirmed my decision.

  36. Isom states:

    “The fastest growing airlines in the United States Spirit and Frontier. Most profitable airlines in the United States Spirit. We have to be cognizant of the marketplace and that real estate that’s how we make our money.”

    Are crappy seats really the reason Spirit is more profitable?

    He then says”

    “We don’t want to make decisions that ultimately put us at a disadvantage, we’d never do that.”

    With respect to the new domestic interior American just put itself at a disadvantage compared to Delta, Jet Blue and others.

  37. Date: 1984
    Muse Air, HOU-LAX, non-stop $99.00, 149 seats available, 50% of MD80 seats were First Class, complementary drinks, meals and snacks both cabins, leather seats, non-smoking, 60-70% total load factor.
    Southwest, HOU-SAT-LAX, $89, 122 seats available, B737-200… FULL (also operated B727-200 FULL) Purchase drinks and free cookies, cloth seats, smoking section aft of overwing exits.
    Muse Air…failed
    SWA…still going strong
    Air travel is still a price driven market. Comfort Value proposition doesn’t significantly alter the bottom line especially for flights of less than 3 hours.
    IMHO

  38. @Juan Trippe: Good example. AA tried extra legroom for a time as well. It was a non-starter.

    A lot of the commenters on this topic are telling us their tastes (often when someone else is paying). That is of limited interest to anyone else.

    Good SEO topic choice Gary!

  39. I stopped flying American 30 years ago. After Eastern went bankrupt I moved to United. I have been a 1K with them for the past 23 years and have accumulated well over 2 million actual miles flown. As an aside, I left them when their service declined and went to Continental for two years until the United Continental merger. When American merged with US Airways they created the “evil of two lessers” and I will never fly them. Living in Philadelphia, I would rather drive to Newark and fly United to South Florida than to fly American from my home airport, 15 minutes from my home downtown. In a pinch, I fly Delta or the best no frills airline, Southwest. The sheep in this country just accept poor service, poor treatment, and poor attitude as a given instead of hitting these corporate whores where it hurts most, in the wallet. If you are unhappy, tell them by spending your dollars elsewhere. When a major hotel chain infuriated me in 1995, as CEO and owner of my company, I put a five year moratorium on using any of their properties by any employee unless personally approved by me. I would only grant approval if it were the only hotel in the area. Eight people who travelled stopped using this chain because I said that our company no longer reimburses travel expense for their brand. I did the same with US Airways. Stop writing and start voting with your dollars and watch them change their tune. The hotel chain in question did, and now I am a Lifetime Platinum. The downside for the hotel chain was that prior to this incident, they had 80-90% of my business. Now they get 20% at best because I tried other hotels and frankly like them better. My advice, don’t get angry, get even!!

  40. OK, folks, let’s be honest here.

    How many of you have corporate travel departments that book you into Basic Economy (E) fares for your travel – or book you into Spirit or Allegiant or Frontier?

    How many of you select or accept a booking (fare class, time or airline) you really don’t like, just to save a few dollars on a $300-400 fare — and to save the hassle of either having your expense report rejected or justifying the incremental expense to a supervising authority?

    How many of you just accept this as the price paid for corporate travel?

    How many of you actually have used your own money to upgrade – for comfort, convenience or earning miles?

    No further questions. I rest my case.

    And, yes, before I retired, I traveled extensively for more than 30 years using and dealing with corporate travel departments.

Leave a Reply

Your email address will not be published. Required fields are marked *