American Airlines: What’s Next Bottom Line
As many of you know, American Airlines has been in a hurried time frame to finish their merger. The merger closed almost three years ago. Today, we still see many differences between the products offered. They vary on legacy US Airways aircraft and original American Airlines aircraft. The week of October 20th, American had its most recent earnings call to investors. Among the many things discussed, the main point was the pace of the merger. With almost all aircraft already painted with American colors, external aircraft have been “merged”. Employees began sporting the new uniforms the past month. This, though, has come with some itchy problems. Internally, there is a stark difference between American’s more modern aircraft, and US Airways’ aircraft. The latter are in much worse condition, and offer fewer amenities.
Well, as far as we know from the earnings call, American Airlines seems to have a plan. Well, sort of. They have planned out the new cabins for 757s, 777s and 787s. The 767s and older 777s have been retrofitted already. The A330s will be retrofitted in the future. Here is a rundown of what to expect from a passenger experience, based on the earnings call.
Retrofits
Per American, almost all of the legacy US Airways A319s have been retrofitted with Main Cabin Extra. Also, the number of first-class seats went from 12 to 8. The new interiors are now the same across all the fleet of A319s.
The 757s have started to become retrofitted. They will offer lie-flat seats in business, and they did not reduce the number of coach seats. As well, the main cabin seats will be refurbished. The aircraft will not feature inflight entertainment. Yet, they will instead offer the business class passengers tablets. A total of 24 aircraft will receive the retrofit.
All the 767s that were meant to receive the retrofits have been put back into service. The remaining ones without the new business class are to be retired in the coming years. The 767s offer lie-flat seats in business with aisle access. The number of business class seats went from 30 to 28.
The older version 777s are slated to lose their first class and have two cabins of service. The already retrofitted will have the Zodiac version of the seat. The newer ones will have the B/E Super Diamond Seats. They will all offer wifi. The retrofit is expected to be completed in the next 18-24 months.
There was no word on the retrofitting of A320s and US Airways A321s. In my opinion, these are the aircraft that most sorely need the retrofit. As they do not offer IFE not MCE, they should be a priority for the airline.
Basic Economy
Per the earnings call, Basic Economy will be introduced at the start of next year. The slated start of the sale of this new bare-fare is January 2017. The most dreaded change for frequent flyers, this means that American will not necessarily decrease the price of tickets. So, what they will do is to increase the price of the amenities available to passengers. This is a result as the airlines try to compete with the likes of Spirit and Frontier. Delta already offers a basic economy product, and it seems to be going well for them.
Premium Economy
American will begin selling premium economy as its own cabin class during February of 2017. For now, these seats are retailing as Main Cabin Extra, and are available for free for Platinums and Exec Plats. The airline is working with Sabre to be able to offer a separate cabin class by that date. The cabin will be offered, for now, only on the 787-9, but will be rolled out through the fleet by the end of 2018. Also, there was no mention of the A350, since the aircraft has been delayed until the end of 2018.
The Future of American First Class
Probably the biggest question, in my opinion that was not answered at the earnings call. What will be the future of American’s First Class product? With the expansion of the Flagship LOunges, as well as the addition of more qualifying passengers, it begs to show what will happen. First Class will only be on their 20 777-300ERs. A grand total of 160 seats will be available throughout the fleet.
This makes me think of whether it becomes worth for American to continue to offer the product. I am a big fan of first class cabins, as they offer an added level of exclusivity. My main issue is that the price does not add up to the benefits. Only if you are buying them with miles do I see it as worth it. I truly hope American continues to offer First Class cabins and that they improve the soft and hard product offered.
What this Means
In general, these are all positives for passengers (except the Basic Economy fares). The refurbished cabins will offer passengers more comfort, and an enhanced travel experience. Or at least that is what American says. It will be interesting to see if the airline itself begins to train flight attendants and employees to be on par with those of foreign carriers. There is a large disconnect between American and JAL. JAL offers some of the best cabin crews out there, and American is sub-par. This can be due to a cultural issue. Yet, there is definitely room for improvement on American.
Landing Thoughts
Although I am terrified by the Basic Economy fares, I see the business sense behind it. I also hope that this drives business class tickets lower, and making them more affordable for people. Ideally, American would offer better upgrade chances for its passengers, instead of waiting for an upgrade to clear at the gate. I am a big fan of American, but I am also a very harsh critic. American was once the best airline to fly on, at least when I was young. With the case of their older aircraft, I truly hope that the airline gets on top of their game with the A320s and A321s. I also hope that their A330s get wifi. Only time will tell what will happen, but for now American seems to be on a good track. Let’s see if they start trendsetting for good now, instead of following Delta.
