American's Chief Commercial Officer Nat Pieper keeps repeating a new goal: becoming "the premier global airline based in the US." I respect him, but the goal seems wildly unrealistic.
What do I make of it?
LOLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL.
US airlines will never even reach 3rd tier. They treat customers like cattle. The government's complete lack of regulation also means this will never change.
I’m all for better consumer (and worker) protections, but… most US carriers in solid ‘2nd tier’ status, globally. At best, they’ll rank 4 out of 5 on Skytrax… (gotta pay them more for a better ranking.) No US carrier is gonna be NH, CX, BR, JL, KE, QR, SQ, or JX; yet, AA is not Aeroflot or Lion Air, either (true 3rd tier).
Hey, wait a minute. I flew Lion Air (well Thai Lion Air) last year and I actually liked their airport/onboard service. Granted it was a short flight to Phuket but it was perfectly fine.
Sorry to Thai Lion Air catching strays on here… Should I have said Air Asia? Cebu? Indigo? I’ll admit, I’ve only taken one of those; survived, but it was not ‘great’…
The difference between those carriers and US based comes down to the front line people.
As long as unions are protecting underperformed freeloaders, they will never be able to catch up to Asian standards.
Um, no Eskimo, the difference between US carriers and many overseas legacy or LCCs is relative cost of living. You can't hire five-star hospitality crews at pennies-on-the-dollar in high-cost domestic US markets, union or not.
Most of that is driven by culture. There's more respect in those cultures and also the people complain less. I've flown many of those carriers and the product is decent, but not mind blowing. In economy it's actually far worse than AA/DL/UA with less IFE options, less WiFI availability, many times less seat pitch, and sometimes no A/C vents. Here people complain about everything instead of being grateful. If those carriers flew Americans around 90% of the time they would not be highly ranked.
@1990: You obviously haven't flown Aeroflot in a VERY long time....
For the past 25 years (Yes, since about the year 2000), Aeroflot has been an excellent airline for both the hard and the soft product. They beat without contest ANY European airline on short / medium range flights, and they are ultra competitive for long range sectors,
I have never had to contact their customer service, so I do not know that part of Aeroflot,. but for the rest I only wish that American could catch-up with them.
Just one minor detail...you have to connect or arrive/depart in Russia. Have fun with that if you aren't Russian.
So Aeroflot will "beat without contest" Swiss for ZUR-TLV, using SVO-CAI for comparison? (those flights have air distances within 100 miles of each other)
So Aeroflot will "beat without contest" Swiss for ZUR-TLV, using SVO-CAI for comparison? (those flights have air distances within 100 miles of each other)
I don't know what today's Aeroflot would be like, but my experiences with them in the late noughties/early 2010s were very positive, they were at least on a par with AF (I don't go to the USA with any frequency, but I did fly DL once during that era and I'd say SU were better than them at the time).
I agree. I literally laughed out loud when I read this. I had to check the calendar to make sure it wasn't April Fool's Day
Good for them - I wanna be the best whale on the beach!
Undifferentiated markets (commodity products) compete on price, not quality. As they have no pricing power over consumers, they increase earnings via cost cutting. Differentiated markets (value-add products) compete on quality, not price. They do have pricing power over consumers. The take-away from the failure of the ULCC model and the ULCC move to the legacy model is that quality matters.
The first step is to take what you already have in place and build in the target level of quality. One promise that Isom made on Day One was: every aircraft ready to fly and the beginning of every day. You need network routes and network schedules that customers can count on. Then, you need to execute on that. This is the starting point and it hasn't been happening. After that, you can start talking about expansion.
From there, customer service and in-flight experience. But, there's huge inertia to overcome. For 15 years, British Airways focused on cost cutting over quality. When it had the chance, it offered buy-out packages to high-wage long-tenured cabin crews (those with the service corporate memory). What was left were flight crews without that service corporate memory. So, while BA's CEO stated years ago that he wanted to bring back BA's reputation as a premier carrier, nothing has really changed. And, I honestly don't think BA will ever get that back.
AA needs a thorough house cleaning. The America West cost-cutting poison has been in AA's veins for years and has brought it to where it is today.
One thing I believe everyone overlooked is the fall of ULCC and NK.
People like to assume NK customers are not AA DL UA customers.
To loss of ULCC affects the pricing and demand more than what most people understands.
You need a strong budget carrier for premium carriers to thrive.
Not going to happen.
There's no such thing as a "premier" global airline based in the US. They're all essentially the same when it comes to service.
As to the most global of US carriers, that crown probably belongs to United.
I would cut them some slack. What are they supposed to say?
AA does have some strengths. Of the big three they have the best domestic network. If you need to go from Rochester to Duluth AA will probably have the best options of the big three. Their central and South American networks are really strong.
If they expand on other global markets and figure out you can’t keep treating customers like garbage they may make something of themselves someday.
Now they just need a better slogan.
What’s the difference between ‘premier’ and ‘premium’… at this point, I’d settle for operating reliably, complimentary on-board WiFi, and, umm, a smile? 🙂
Ironically, WN let me down today, and AA saved the day; that felt ‘premier’-ish. (Even got a PDB on an American Eagle regional. Bah!)
Why is WN ick? I find although they lack in some places they far and away have the best “people” working the front lines of any US airline. AS is second and it goes rapidly down from there.
@Timamtrak How good is WN? Always avoided this airline in the past because of their cattle calling.
Why can’t it be something like “our goal is to be an airline our customers want to fly and that our employees are proud of?”
You'd never make it as a management consultant as this goal is more vague than the one you criticize.
Top third of the bottom quarter. Set low goals and consistently fail to meet them
Skeptical like everyone else. But I guess you have to start somewhere.
1. What's with the Americans recently being obsessed about the term "global airline" (as if it meant something)?
2. It's not possible to operate premium airline in the US, certainly not on the above-mentioned "global" scale. They can't even teach their crews that call button isn't "only for emergencies"...
Imagine trying to base a global airline in a country that requires visas and baggage rechecking even for the simplest international connection. They're so deluded that they think that UA and DL get global reach by flying cruise-going boomers to Malta etc.
agreed--neither Emirates, nor Turkish, which would probably be considered among the most "global" airlines if ranked by non-domestic destinations, can get you from Abbotsford to Cordoba, neither of them trivial cities. For that matter, even Copa can't!!
Might be easier to move their corporate registration to Belize and declare “We are the premier global airline based in Belize.” Mission accomplished.
Realistic goals for American:
1. Abandon US Airways management style. Stop thinking of the airline primarily as a no frills deliverer of people from Charlotte to Tampa. Bring back PTVs, convince customers you're not the sad also-ran to Delta and United. In corporate speak this is probably "Transform ourselves into a leading premium carrier
2. Expand wide-body fleet and introduce more service to Europe. UA/DL are eating their lunch with TATL service. Running people through LHR on BA, with terminal changes a majority of the time, is non-competitive against EWR-CTA, JFK-OLB, etc.
3. Maintain market dominance in Latin America.
4. Honestly they're probably too far behind in Asia to do much other than offer some loss-leading routes to HKG or Tokyo so maybe just cut losses there, especially with a shortage of widebodies.
5. Generate more profit from credit card/lounge networks. There's room to grow there
HKG has neither the importance nor the imputed financial profitability that it did prior to 2019, due to Xi personally inspiring/motivating many multinationals to move their regional HQ to anywhere-but-PRC...
Numbers 3 and 5 are probably the most realistically, in the short term. Number 1 is probably the most important, yet culturally difficult.
great take, Ben.
The airline industry EVERYWHERE has always been an ego game. Part of the reason why airlines are such poor financial investments in general (if they are not state owned) is because there is always a "need" by its leaders to expand beyond what it can afford.
The US needs competition and yet the big 4 are stronger than they have ever been and competition to the big 4 is weaker than it has ever been even as LUV is fully embracing become a big 3 clone.
right now, none of it matters in light of jet fuel prices that keeps going up and is unlikely to stop going up. The Middle East remains a flaming mess while Russia used a couple days of throttled back Starshield (the military version of Starlink) in Ukraine to destroy as much in such a short period as they have in any week than they have so far in the war; Ukraine's answer is that it will move full speed forward with targeting Russian energy infrastructure including refineries making the Starshield screwup even more costly for the west.
Airlines around the world are cutting capacity for the normally slow winter in light of high fuel prices. AA had one of the most aggressive growth plans for the 4th quarter and beyond to try to cut AA's high unit costs but they will have no choice but to cut capacity in light of high fuel prices.
UA's total debt is only a couple billion less than AA's and UA still has massive aircraft deliveries coming for which it cannot generate cash to pay so it is taking on debt.
Just as at covid, the US big 4 is divided between DL and WN which are very conservatively managed financially and AA and UA which are financially fragile; AA just happens to be more fragile.
all of the strategies and exec hiring and firings that AA is doing are not much different than B6 over the past couple years; both carriers are fundamentally weakened in an industry that shows no sign of returning to financial strength just as every airline starts chasing the same "premium" traffic.
Love it - after years of Isom staying in the shadows, it's about time some bravAAdo. Nuke any/all elements of the US Airways culture and get moving forward. Really want AA to succeed.
I was never good at maths but even I know two out of three is two thirds and not half re airline, American, premier.
I know folks are focused on how long it takes to implement the long lead capital investments…and I am incredibly eager for a better international route network, newer wide body planes, faster internet, etc. (don’t really care that much about seat back tvs or the wine list personally)…but I have to say that I am impressed by how much of an impact some of the smaller changes have made to my customer experience in a very short amount of time. A recent delay was appropriately handled in the app with no rolling delays. As an EP, I have been proactively thanked by name on every one of my recent trips, even when sitting in MCE, and have been proactively offered my snack/sandwich benefit at the start of service when in economy on a longer mainline flight. And as lame as it sounds to say this, it honestly seems that the service has been offered with more smiles than in the past. I get it…it is a pretty low bar and doesn’t get them anywhere near overtaking Delta and United yet…but this is what you get when you lay out a better vision for your employees and make changes that reinforce that message, even if it is low hanging fruit. I’m generally a believer that people want to do a good job and buy in to the success of their employer, if you give them a reason. I’m excited to see where this goes and actually feel some hope for the first time in a long time with the direction of the airline.
Ben wrote: For a while, it was all about “we want to be premium,” whatever that means, exactly.
Well, Ben, two of your most well known commenters answered that in their own way several months ago. For a U.S. carrier premium has most to do with how profitable it is. It is achievable by U.S. airline standard by becoming credit card flying machines with barely above average soft products and less surly airline employees. U.S. companies sign contracts with them but not by their own choice and certainly not because they think the U.S. carriers provide the most premium experience or premium value.
if I am one of the ones you are referring to, no, profitability is not the definition of premium.
The definition of premium is what people are willing to pay. A designer label handbag is functionally no different than one from a discount retailer. If you throw enough bells and whistles and trademarked bling on a handbag and restrict the volume of what is produced, it becomes premium.
the revenue sources you mention are part of the problem and driven in part because credit cards allow people to spend more than they otherwise would; airlines have convinced banks to tie high spending to their loyalty programs.
and, as much as people scorn US airlines, they have access to the US domestic market, something that foreign airlines cannot do even if their service to/from the US is better. Loyalty programs keep passengers loyal to bigger companies for the US consumer.
and specific to AA, they have cheapened their own brand for so long but are trying desperately to pivot; remember that UA made a pretty fast pivot while DL did it over a slower period of time. Each new airline that pivots to the DL model is trying to do it faster than what it took someone else. WN could well beat AA.
AA and WN are going to spend a whole lot of money; UA is nearing the end of its premium pivot while DL is at the point of working on its 2nd generation of a number of "premium" products and services.
When you have 4 big carriers all chasing the same thing even as the economy risks a slowdown because of high fuel prices which also are a huge risk for airlines, it isn't hard to believe that one of the 4 is at risk. AA's finances just make it much more vulnerable perhaps even than WN.
Note to my designer lable executive friends, (or any executives).
He might know a bit of aviation to fool some people. But that's it.
Tim Dunn knows nothing about management or business or econ.
The closest he can be in the industry is sewing knock off bags in a sweatshop.
D: Delusion.
And I want to “date lili reinhart” but we all have lofty ambitions I guess