Topic of the Week: Can Richard Branson Fix American?

Sir Richard Branson, boss of all things Virgin, did an interview with NPR last week explaining how he would fix American.

“You would need to really go into all the planes; gut them out, you know; get the best interior designers, as you would with a new hotel, to completely refigure them, you know; put in the best leather seats; put in the best entertainment you can; work with the crew to make sure they have the best uniforms, the ones which make them really feel great, and let them decide on what uniforms they want to have; and you know, just surpris[e] people. …

“Relative to the income you’ll get as a result, it’s not a huge expense … and, ultimately, it’s the only way to survive….

In other words, Branson says he’d turn American into another money-losing venture, Virgin America. Words can’t express how crazy this sounds to me so I’ll leave it to you…

(Visited 30 times, 1 visits today)

Get Posts via Email When They Go Live or in a Weekly Digest

Leave a Reply

38 Comments on "Topic of the Week: Can Richard Branson Fix American?"

avatar
Sort by:   newest | oldest | most voted
David Johnson
Guest

The bit about not being a huge expense is the part that surprises me most. How much extra would it cost to refit a 150 or 300 seat aircraft at the same time that it’s undergoing a heavy maintenance check ?

flyairdave
Guest

Branson’s ego is writing checks American cannot cash.

Gary Leff
Guest
Why in the world would you invest to “put in the best entertainment you can” — your customers bring their own entertainment. The huge capital expense here is so 10 years ago. American isn’t going to earn a revenue premium off of better seats, and those seats wouldn’t necessarily even be more comfortable. They earn revenue off their corporate contracts and they’ve been driving down costs. American is doing a much better job in its bankruptcy than I expected except for the problems with their pilots, which I don’t mean to minimize. And they’ve been focusing on the right areas… Read more »
Eric
Guest
I feel like you are way off base (just an opinion). If both Delta and American, for example, can fly me from city A to city B on the same MD-80 type aircraft, for the same price, and I am not mandated to fly one over the other, I would choose Delta everyday! The plane is brighter, has Wi-Fi (whether I use it or not is a toss-up), the flight attendants don’t SEEM to be as old, and they wear those red dresses. It’s all about novelties, and American is missing them. People love novelties and they may say they… Read more »
drybean
Member
Eric may have something here… AA could get Herb Kelleher to design hot pants and white go go boots for the flight attendants! After all Herb changed history by making the aisle seat more popular. Seriously, while there may be a comfort zone in AA’s silver shining fleet, the interiors of the MD80s, 757s, and 767s are signs of the past. All of that will go away as the new 737 and Airbus fleet takes to the air. And obviously Sir Richard has not seen the new 777s… For new uniforms AA should conside Harding Lawrence’s idea of having a… Read more »
Bill Hough
Guest

Herb doesn’t get the idea for putting FAs in hot pants. PSA in California was doing this when Herb was cooking up the WN business model, which David Morgan referred to as a “Texas PSA” in his report in the late, lamented “Airliners International” magazine.

Bill Hough
Guest

Of course, that first sentence should read “Herb doesn’t get credit for the idea for putting FAs in hot pants.”

Ben
Guest
I think that Sir Richard does have somewhat of a point here. American’s product comes across as antiquated. The livery has to change, being that it is from the late 1960s and it shows. I can think of no other major carrier (at least in the US) that hasn’t changed their livery at least once in the 40+ years that American’s has been around. The soft product is inconsistent, even within fleet types. Take the 737s for example. Some have wifi and 110v power ports, some have just 110v power ports, and some have only a few power ports that… Read more »
Konstantin
Guest

Now that SRB has spoken, time to hear MOL’s advice…

chinger
Guest

Porn on all the planes. Charge for bathroom use.

CP
Guest
(1) American does have some inconsistency in its fleet features, as pointed out by Ben, but I think it is worth noting that other airlines in the U.S. have the very same issue. Look at United: pre-merger UA had a blue livery on same planes, a gray livery on other planes for years; post-merger UA has Continental planes, ‘new’ United planes, old gray United planes, and blue United planes. On the interior, you have the old CO interior, the old UA interior, the oldest UA interior (on the 757s), etc. Delta has arguably the best product consistency of the majors,… Read more »
Bill Hough
Guest
CP: “post-merger UA has Continental planes, ?new? United planes, old gray United planes, and blue United planes.” I also thought it was pathetic how long pre-merger UA kept the gray-painted aircraft running around after introducing the blue/white update in the ’00s. However, my understanding is that all gray UA aircraft have now been repainted, leaving just some of the blue/white ones running around in pre-merger paint. Some of the UA Express gray planes are still running around though, I think. Getting on with the point of this post, I agree with Cranky’s disdain of Branson’s suggestion that AA waste money… Read more »
David SF eastbay
Member
To Sir Richards point, new uniforms and a nice work area can do a lot to make workers feel better. It doesn’t matter if it’s a 6×6 cubicle in an office or a 767 30,000 feet up, if your workers feel better about their surrounding their attitude and outlook change for the better. And people do get tired if the same old thing which is why we repaint our homes, buy a new shirt, change a hair style, etc. Seeing the same old boring AA (or any company) makes a person loose interest, and when something new and flashy comes… Read more »
DesertGhost
Guest
It seems to me that Sir Richard is suggesting that American differentiate itself from the other legacies. I like the idea in the abstract. With new aircraft on order, there’s not as much gutting required as one might think and added costs could be minimal. Gordon Bethune, in an “Airliners” Interview a few years back, lamented the cookie cutter direction the airline industry was headed in. UnitedDeltaAmerican Airlines shouldn’t become clones of each other; they shouldn’t become an “AmAir” (a la Amtrak). There’s nothing wrong with being unique. Being “something special in the air” is all-too-rare in the increasingly homogenized… Read more »
Bill Rathert
Guest
I agree with Sir Richard on the need for an upgrade of the interiors of the AA fleet, and on an effort to give the employees something to feel good about once more. CP is correct that a change in livery or uniforms will likely draw its share of negative comments, and in all fairness, it does little or nothing to inspire loyalty or gain market share from the traveling public. Where AA could gain on its competition would be to focus on enabling self-entertainment in flight, by providing reliable Wi-Fi and plentiful power. Travelers now and in the future… Read more »
Eric
Guest
I agree with SRB to an extent. People get excited about “new”. Just look at Apple every time a new version of an iPhone or iPad or iPod or whatnot. I wouldn’t compare it to Virgin America simply because most people don’t even know the airline exist. American needs to WOW from the inside so people on the outside would be just as excited. Just think if Apple’s employees hated their bosses and were miserable at work and were no help half the time you went into the Apple store. You would definitely have a different outlook on the product.… Read more »
Fred
Guest
Of course Branson thinks that this is a good idea – that’s because he’s already done it. But how does he claim to know that it’s the only way to survive? Other than his airline not doing so well financially, it wasn’t aged interiors that brought American to bankruptcy and the state it’s in today. Sure, updating cabin interiors and uniforms can’t hurt, and if done at the same time as heavy maintenance won’t cost that much (talking orders of magnitude), and can be part of a new image if American wants. But there are other deeper problems here that… Read more »
DAB
Guest
I am with the comments that Branson isn’t that far off. The point with him, though, is he doesn’t have a head for numbers at all. The question is how much would sprucing up the planes really cost. I am against the comments that say they need a new livery. First, their livery is classic. Second, people really don’t care about the outside of the plane or the paint job inside the plane as long as it is tidy and unoffensive. They care about the seats to the extent of product differentiation beyond safety, and the last time I flew… Read more »
Rob Porter
Guest

Amen! The Allied Pilots Assc. would never cooperate and that goes for the unions in general. They’re motto is “Sho’ me the money!”.

BW
Guest

Some of those things are important for image, such as the things he mentioned that put forth a consistent onboard image.

It is much more important for an airline to provide competitive pricing, good customer service, safe flights, on time arrivals, and not losing bags. If an airline doesn’t do those things well, the rest doesn’t matter.

JM
Guest

Here-here!

Whether Branson’s suggestions have any merit or not, there is far much more work which must be done to fix American and turn it into a profitable airline.

JM

Bobber
Guest
Two riders, first: I am no fan of SRB or Virgin, and I am a loyal UA customer. However – what Sir Dickie says has partial merit. US carriers, in the main, are truly awful in comparison to what is on offer around the world (aka Middle East/Asia carriers). Whilst not all of his suggestions are required, it would make a considerable change for an American carrier to revamp its product – across the board – and make the experience an almost pleasurable one for all classes of service. So, no, I don’t think his comments are crazy; he just… Read more »
kelty
Member

Someone way back mentioned one of my pet peeves in regard to seats. I agree that leather in cars or planes is uncomfortable on a long flight. The airlines use leather because of a classier image, but particularly because they are easy to clean by just wiping off. Also, leather currently is cheap on the world markets.

The other seat issue is space. American some years ago advertised the most leg room in coach. They gave up that uniqueness and United picked up the concept with Economy Plus which seems to be bringing customers.

David M
Guest
The financial reason More Room Throughout Coach has failed while Economy Plus was successful was that MRTC couldn’t be monetized. American couldn’t charge extra for it on top of the base fare. If American increased their fares on the basis of having MRTC, most customers would just see it as more expensive than the competition and fly someone else. United is able to keep their standard product the same as everyone else, but provide Economy Plus as an option for people who are willing to pay extra for it. Since American couldn’t charge extra for MRTC, it was only useful… Read more »
doug
Member
To state the obvious, the reason that AA’s planes haven’t been updated is because they were losing over $1B annually. Similarly, it’s hard to ask your crew to purchase new uniforms (or for AA to purchase them) under the pre-bankruptcy conditions for all the reasons stated. With a better balance sheet and lower costs, AA will implement some of what SRB and others on this site are recommending, just as the other legacy carriers have done post bankruptcy. Anyone who thinks they won’t isn’t paying attention. Regarding AA’s old livery; in fact, that was an “innovation” at the time it… Read more »
Sally Smith
Guest

The best thing American can do is to treat their employees well. Southwest has always put their employees first because they realize that treating their employees well leads to those employees treating the customers well……..hence, the philosophy Southwest has embrace is that they are in the customer service business. The biggest problem American has faced for many years is their poor management/employee relations. When there is no trust, and management doesn’t make similar sacrifices to what it expects from employees, you end up in the mess they have now.

doug
Member
@Sally, have you checked Southwest’s management/employee relations lately? Not going quite as well now that LUV is no longer the low cost / low price leader. It’s always easy to have great employee relations when you are making tons of money and can afford to “spread the wealth” but things get much tougher when hard decisions are necessary to keep growing or just to survive. Check back on the LUV management/labor relations in a few years and I suspect it will be even worse. BTW, good relations are a two way street. It’s pretty hard to build trust with your… Read more »
yo
Guest
Sir Richard has spent too much time in his limo, he has gone a bit dotty. Because, everyone knows that when they go to Orbitz and see a fare for $300 and a fare for $500 for the same flight on two different carriers..they always choose the one with fancy leather seats and nice uniforms on the Flight Attendants. McClain, Air One, MGM Grand Air, Regent Airlines, Legend Airlines, EOS, Silverjet..etc..etc. Hey Richard, get this, American can get 747’s fly them out of LAS and put clowns and face painters and performance artists on them, and call themselves “Family Airlines”… Read more »
BJ
Guest

I agree with the human headline. All he has basically said is refresh the interiors, catch up the technology and get the staff on side. If you want a case study for the benefits look at Virgin Australia, now making a profit. As a confessed geek I embrace people encouraging airline management to do something other than compete in the race for the bottom.

jaybru
Member

Fix American? Fix our legacy carriers? I’d give Sir Richard a better chance than any of the legacy managements out there now.

How long will it be before there are no legacies left in this country? Big ol’ nationals? None. Hubs…kaput Spokes…dead. Nothing but niche carriers like Southwest, and smaller, operated by people like Branson. And, we peasants will demand they name a city to honor…, well, whatever.

eleanor.c.moore
Member
I love my former boss Richard, as he is obviously fun and brilliant. AA has been a stale product for a long time now. But that’s not the main reason for their problems today – that credit can go to Crandall and his predatory tactics. They’ve run more airlines out of business and out of town than any airline in the world. The airline has never learned how to compete. But back to Richard, the idea of retrofitting the a/c and the uniforms is brilliant and I’m in support of that. I don’t like the idea that the old HP,… Read more »
Steve
Guest

Branson needs to concentrate on saving his own failing airline (VX), not telling others how to run their business. I heard two days ago that David Cush emailed the entire front-line staff at Virgin America asking people to take voluntary leaves and that they’ll be chopping their 1st quarter schedule by 5%…

BJ
Guest

CF, agree but I was referring to Virgin Australia of the last two years. Its not long enough to be conclusive but they are making a profit which is a rare thing in aviation. I think the staff engagement is the big thing.

nealo
Guest

I think Cranky and some of the airline wonks here are looking too much into operations and logistics. Branson’s point is that AA [also] needs some branding (or in his case showmanship), something to create buzz and attract people to the overall (logistically good) product. VX may not be profitable, but wow, a lot of people are paying a premium for the cool cabins and simple elegance of their products. Look at Apple, Starbucks, Target as brands delivering on both good products and buzz.

michael franklin
Guest

I’d love to invite the entire management team of American Airlines and United for that matter to take a round trip on an Airbus 380 on Emirates JFK Dubai and back and then understand why people pay a premium for a GREAT PRODUCT , why theyre making money and these dynosaur airlines are all totally financially, spiritually and mentally bankrupt plus beyond redemption OMG the model is right in front of them and copies of ‘ Willful Blindnesss” all round On me

Marissa
Guest

I don’t think anyone can save American.

wpDiscuz