American Airlines Wants to Clarify Its Mission and Get More Customers to Recommend Them

In the American Airlines internal ‘Tell Me Why’ podcast Kurt Stache, American’s Senior Vice President of Sales, Marketing, and Loyalty talked about the airline’s new Airbus A321neo, on board entertainment, the airline’s new mission, and getting customers to want to recommend the airline. He’s a legacy American Airlines executive who once ran the AAdvantage program, and AAdvantage reports up to him.

The New Airbus A321neo is Now in the Fleet

I was excited to fly the American Airlines Airbus A321t inaugural in 2014. I was excited to fly the Boeing 787-8 inaugural in 2015, the Boeing 787-9 inaugural in 2016, and the Boeing 737 MAX in 2017 (because I wanted to know what the new domestic product was going to be like).

In contrast I didn’t bother to fly the A321neo inaugural, because it’s an extension of the Oasis interiors project we’ve already seen with less distance between seats, less padding in the seats, and no seat back video.

Stache emphasizes the aircraft’s range; 20 first class seats (albeit with less legroom and a less comfortable seat than customers may be used to); 47 extra legroom coach seats (though with less legroom in those seats than the airline offered on their 737-800 and MD80 aircraft); larger overhead bins so there’s enough space for each customer to bring on one carry on; satellite wifi; and seat power.

Live TV and Power at Every Seat

The airline now has free live TV on over 700 planes – 12 channels on its narrowbodies, 4 on widebodies. Of course that’s available for streaming onto your own device and not via seat back video screens like Delta is committed to.

Finally we’ll have power at every seat but not until the end of 2021, including on 2 class regional jets. Power at every seat though in some cases meaning that two seats share a power outlet so it isn’t power for every passenger).

Likelihood to Recommend Scores

Delta focuses on its net promoter scores and argues they earn a revenue premium as a result of customers preferring to fly the airline.

American surveys over 1 million customers per year, though I’m surprised the number is that low actually. They see the most important question on these surveys as likelihood to recommend and “since the merger we’ve seen the LTR scores increase quite a bit.” It’s not clear how much of that simply stems from updating legacy US Airways aircraft.

Stache reports at “the biggest impact to LTR is dependability” and that “there’s a 20% decline in LTR scores when an airplane arrives late and that’s why we have significant focus in 2019 on running a more dependable airline.”

American Clarifying its Brand Purpose

Stache reported on the airline’s brand project,

It’s been a long time since we’ve had a real brand purpose and a brand campaign and so the marketing team is well underway on this project and we have interviewed or surveyed over 10,000 team members and customers both analytically, qualitative, quantitative, to get a sense of what is our brand purpose. We’re well underway, we’re now under the creative phase of this.. the goal is to launch something by the end of this year..

Currently the airline lacks a mission statement. It’s not clear what they’re trying to be, and I find employees often get a sense for mixed messaging – whether they’re trying to be a premium carrier (thanks to investments in international business class hard product, lounges, and the ConciergeKey program) or an ultra low cost carrier (given the seating in their new domestic product, even the poor first class seats).

I do think that a mission and purpose for the company gets set at the top. While surveys can help you understand how others perceive you, and what your reputational assets are, setting the vision and purpose needs to come from leadership and not surveys. I’m excited to see how this project develops, though, because a clear statement about who the carrier is can help,

  • Clarify what investments the airline should be making
  • Help employees focus on goals that align with those of the business
  • Serve as a tool to beat back bad decisions that are inconsistent with the vision

Hopefully what we get is that real clarifying purpose, and not just an ad campaign.

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. Mission statements are generally empty and worthless. Everything you need to know about who they are is already obvious. Now if they came up with a new mission statement, which in turn resulted in changes to strategic objectives, processes, investments, etc., then that’s something, but in this case it would just be a meaningless string of words.

  2. “I’m excited to see how this project develops, though, because a clear statement about who the carrier is can help,

    Clarify what investments the airline should be making
    Help employees focus on goals that align with those of the business
    Serve as a tool to beat back bad decisions that are inconsistent with the vision.”

    Agreed that’s how consultants say mission, vision, and values statements work. In practice, these statements do little if anything to change corporate behavior. Too often they merely provide cover for the same actions that a company would have taken even without such statements. But hey, you can put together some fun, high-priced retreats for execs and the board to come up with them.

  3. It doesn’t sound like they’re coming up with a mission statement. They’re putting words around their brand purpose (e.g. “Going for Great”) for marketing and brand positioning. The two should not be conflated.

  4. Glad I am happily retired otherwise it would be a fun challenge for this retired federal Gov’t Stratgeic Planner & Performance Improvement Officer to take on. The mission is the top of the pyramid. What are goals that will fulfill the mission. What are Performance Measures to determine whether you are achieving your goals and Mission. What are risks to achieving the goals. And on it goes. It’s not rocket science :-).

  5. If he was running AAdvantage in it’s heyday (which was clearly the market leading program driving real loyalty) then he has a good sense of what customers want. This sounds like a bunch of fluff to me.

    Solid product (nope), reliability (nope), loyalty program (nope).

    I believe AAdvantage is perhaps marginally better than SkyMiles, but not enough to justify sitting on an OASIS plane in economy or first class versus what Delta is offering (IFE, better seats, more comfort, better reliability).

    I think they may right the ship eventually when forced to, but not in the near future with their current top management in place who doubled down on initiatives such as OASIS and AAdvantage devaluations.

  6. Delta has a revenue premium because they have an absolute lock on traffic in 3 business traveler heavy cities- Atlanta, Detroit and Minneapolis. Plus most of their bread and butter markets in the southeast have zero exposure to any low cost competition. That’s what gives them the revenue premium, and that’s what has subsidized their expansion into nyc, lax, and sea, where they are exposed to a ton of low fares and are simply competing for share. They have a great spin machine that tells a wonderful story, but that pr deflects attention from the true story- that delta is sheltered from meaningful competition in its largest markets, does whatever it can to minimize completion, and uses the extortionate fares it can charge in those markets to fund a somewhat better customer experience and compete in brutally competitive but large and strategic markets.

  7. That’s what they think they need to go to get customers to recommend them? I don’t think they are talking about those who order special meals.

  8. “It’s not clear what they’re trying to be”

    I thought American was an airline. What other choices are there?

  9. The board of directors need to wake up and fire Parker. At one time AA was ranked #1 in surveys until Parker arrived from USAIR. Now AA is ranked second from the bottom (only ahead of Frontier).Who in their right mind would recommend AA!

  10. This was eye opening and leads me to think that the Kirby era that caused the decline of USAir and the “new” American is finally coming to an end. If you’ve ever been involved in merger you can only focus on one, maybe two things at a time and both airlines had issues. The merger went smoothly, Kirby was creating an other Useless Air, but then was let go, they took a breathe and now moving forward.

    My AA experiences have been as good as DL domestically and I think the Oasis 737 and Maxes will be reduced by a row. The A321 will be the same as the DL configuration (actually 1 seat less for both CEO and NEO) and the A319 will have 4 less seats than DL so the only difference is seat back screen. Since only jetBlue and DL are keeping them, the trend of streaming, live TV and a device holder with outlet is where people are heading domestically. I actually prefer this set up (more under seat room).

    AA is heads and shoulders above the DL product internationally and I feel that their domestic product in the next 3 years will equal them. Note AA fares are usually lower then DL. . .a seat back screen isn’t work a nearly double fare between PHX and MSP.

    This is the light at the end of the tunnel, I think the US will have two solid large carriers in the next 3 years. UA, your old livery was bad, your new one is worse, just like the airline Kirby is killing.

  11. I’m Likely To Recommend anybody but American Airlines. Want poor reliability, a weak product and getting weaker everyday, and a premium price-tag? Then I’d recommend AA.

  12. Empower employees. Celebrate and promote the positive stories of them creating great experiences for the passengers. Develop a way for employees to recognize and thank each other in a public way and make any “mission statement” a simple set of principles that can be followed by all and not some lofty bs statement that sounds nice but no one really knows how to execute.

  13. @Jason – that doesn’t align w/UA leadership (your former employer I believe) consistently talking about how they are in the best/most premium/highest income markets.

    Might want to check those US GDP by city rankings…ATL is the only one top 10 (and it’s 10).

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