Recently, American Airlines stock reached its lowest point in two years. All its competitors, such as United, Delta and Southwest, have seen share prices rise over that time period. In some cases, shares are close to all time highs. What, then, has led investors to shy away from American’s (AAL) stock?
I spoke with a few minority investors and some frequent fliers in order to gauge their opinions. I also include my own opinions, as well as some borrowed from Gary Leff from View From The Wing and this article.
How to Improve?
Overall, I see four major themes in which American can strongly improve to give it a stronger competitive perception. These will be spread out in 5 articles. The links for the themes are here:
The Overall Conclusion from the different articles is that there is a LOT of room for improvement. Three of the five investors I spoke with are unhappy with the job American’s C-Suite has been doing, and all five believe the company is headed in the wrong direction. Among the frequent fliers I spoke with, they believe American is not focusing on their needs as revenue generators, nor are they valuing their loyalty. The non-premium travelers I spoke with mentioned that American does not distinguish itself out from the pack, they would not pay a premium to fly AA since they do not see their brand as adding value to their experience. One thing that one of the fliers mentioned was their consistent bad experiences with American Airlines operations, with her flights cancelled or seriously delayed on all 5 instances she has flown with them this year.
The main solution for American Airlines is for them to LISTEN to passengers and employees AND ACT ON FEEDBACK. There are clear cut issues between the C Suite and major non-investor shareholders in terms of communication. I believe that the airline has been focused on the bottom line’s numbers, without focusing on what goes into the calculation itself. Although I am a frequent AA flier, and have gone out of my way to fly them for years, there have been moments where I have been close to a full divorce with American. I truly hope that the airline does listen to feedback, and looks into these and many other consumer- and employee- friendly decisions.