American’s Latest Improvements Show An Attempt to Balance Customer Experience with Spending Tons of Money

American

I wrote earlier this week about how Delta was working on re-branding to reflect all the product improvements it had made over the last few years. Well, American and US Airways are about 5 years behind the Delta/Northwest merger, so they still have a lot of work to do. This week, American touted $2 billion in product improvements (some of which we had already known about). It’s good to see these improvements, but it’s clear that there’s a delicate balancing act going on between customer improvements and spending, especially on airplanes that are going to be retired in the next few years.

American 757 and 767 Plans

American does come from a difficult place. Legacy American hadn’t invested in its onboard product in years. (It had just started before the merger, but that hadn’t hit most of the fleet.) Meanwhile, legacy US Airways was an airline that didn’t think it needed an upgraded onboard product. Now, as the combined American, both sides needed a lot of money put in to get the product up to speed.

On the new aircraft side, that was easy. American had already ordered a silly number of new airplanes and those are coming in all the time. About 100 new airplanes came in this year, 112 will come next year, and then 84 more will arrive in 2016. That’s a lot. But the bigger issue is the older aircraft in the fleet and what to do with them.

Some of these things will be addressed through retirements. The MD-80s, for example, are quickly going away. There are still about 150 in the fleet, but as more 737s come in, more MD-80s will be retired. With American keeping the MD-80s on mostly mid-haul flights, the inflight wifi is enough to make it a decent enough onboard experience, though clearly they could benefit from investment. They just aren’t going to get it.

On the other hand, we have a few legacy fleets that are getting long in the tooth but are staying around for awhile. Those are the ones that are being addressed in this round of changes.

The 767
The US Airways 767-200s will be retired for good in the next couple of months (sooner than originally thought), but that still leaves 58 of American’s 767-300ERs in the fleet. These will eventually be replaced by a combination of 787s and narrowbody airplanes, but that will take time. And these airplanes currently have the worst long haul experience in the fleet, tied with the 757. In coach, it’s old school with only overhead video screens and no wifi. In business, it’s that torturous angled bed which I experienced on a Dublin trip.

American had already announced changes in the front cabin with flat beds being installed but only on part of the fleet. That still holds. There are already 11 flying with another 14 scheduled to be converted this year. But that’s it. The remaining 33 will keep flying in their ancient state until they’re retired. But this still doesn’t help those in the back of the bus. Is there any relief? Yes. The 25 767s that are being converted will now have satellite wifi onboard. That’s huge. No powerports though. They apparently can’t justify that.

This means that flying on the older aircraft will still suck. Originally, those were supposed to be retired within about 3 years. We’ll see if that changes. I’m told they’ll try to isolate the older products on routes that might not care as much. Dallas to Hawai’i is probably the biggest one you’d expect. But with 33 flying today, some are going to do long haul routes.

The 757
Today, there are about 100 757s still flying between the legacy American and US Airways fleets, and they are one giant hodge-podge of onboard experiences. American has some domestic ones with wifi and international ones with angled flat beds up front. US Airways has a mix of airplanes it picked up in various places. The 757 has been such a workhorse for every airline serving all kinds of different markets that the number of configurations out there is mind-boggling.

But now, American will work to retire the 757s in favor of A321s as much as possible with the realization that there are some missions that no other airplane can really accomplish with the right number of seats. (Well, that is until Airbus officially launches its long range A321….) With that in mind, we’re going to see a 757 fleet stick around for a long time. In particular they’ll be used for East Coast – Europe, US – Latin, and West Coast – Hawai’i flying.

The East Coast – Europe and West Coast – Hawai’i US – Latin airplanes will be retrofitted. They’ll get flat beds in business (we don’t know what they’ll look like yet) along with powerports throughout the airplane. Oh, and satellite wifi will be installed as well. Pretty nice, actually. But what about the rest of the 757s?

Well, I’m guessing that West Coast – Hawai’i flying won’t see many upgrades. And for the meantime, domestic 757s will probably also not get any love. It’s going to take a while to get that many 757s out of the fleet.

The A319/A320
Legacy US Airways has a lot of A319s and A320s and those aren’t going anywhere. It has 93 of the former and 64 of the latter, in fact. And while legacy American has no A320s, it did recently start taking delivery of tricked-out A319s with all the bells and whistles.

The A319s in the US Airways fleet will be getting an upgrade but it won’t match the legacy American fleet (because it’s nearly impossible to justify that level of bling). The configurations will also be a bit different, at least until they decide to change the legacy American fleet. The legacy American A319s have 34 Main Cabin Extra seats. US Airways A319s will have only 24. [This is incorrect, configurations should be the same.] There will, however, be powerports through the airplane, so that’s great. They already have wifi, so you know that’ll be the extent of inflight entertainment on these airplanes.

But here’s the thing. The A320s aren’t getting these upgrades. So far, they aren’t getting any upgrades at all.


As you can see, we’re a long way from an even remotely consistent product experience. It sounds like American wants to offer wifi, streaming content, and power outlets on all of its airplanes in the distant future. That’s not a bad plan, but it’s going to take a long time to get there.

I suppose that’s the nature of the beast in a merger like this, but with airlines like Delta finally getting everything to be consistent, it makes it harder for American to put out these varying experiences. I know it might not be the most financially prudent decision, but I would think that heavier investment, even in airplanes that will only be around for a few more years, would still be worthwhile.

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25 comments on “American’s Latest Improvements Show An Attempt to Balance Customer Experience with Spending Tons of Money

  1. This strikes me as standard USAir fair. They are only doing the minimum amount they think they can get away with instead of biting the pilot and developing a comprehensive upgrade path for the entire fleet. In my opinion fleet types and aircraft that aren’t going to be retired in the near future should be brought up to a consistent standard. The current plan is only going to anger the regular fliers who are looking for a consistent product experience. And those are the people an airline like American could and should be going after.

    1. 121 Pilot – Well it’s certainly not the legacy American MO post
      bankruptcy. They wanted to spend money on all kinds of things whether it
      made sense or not. But I don’t think this is standard US Airways either.
      They’re doing things that they never would have done as US Airways
      (powerports, for example). I guess the question is… how do you define
      “near” future for retirements? I assume that’s the bar they’re trying to
      set.

      1. Cranky,

        First my post should have ride “biting the bullet” not “biting the pilot”..

        Okay why do I see it as standard USAir? And what do I consider near term?

        Near term to me would be the next 2-3 years. I get that the two carriers have a large fleet of aircraft that haven’t been updated many of which are going to be replaced and I think customers will give them some time to create a uniform product. But beyond that time horizon I think people are rightfully going to get annoyed at the lack of a consistent product. And by people I don’t mean price sensitive leisure folks I mean the frequent fliers that are the lifeblood of a large legacy carrier. Especially on long haul flights they are going to rightfully demand a consistent and up to modern standards experience. And that means true lie flat beds in the front cabins. That even the upgraded 767’s aren’t getting power ports is another big miss in my opinion.

        From what I can see beyond that 2-3 year timeframe we will have some 767’s doing long haul without an update. 757’s and A320’s domestically operating without any updates and presumably the USAir 321’s as well. As you said I think a bigger investment to get to a uniform product would be worthwhile.

        Why do I see this lack of investment as typical USAir? Because pre-merger USAir didn’t seem any more interested in their customer experience than they had to be. The airplanes were allowed to get old and tired and beyond wifi there seemed to be no attempt to update the fleet. Look at their terminal in LGA as a classic example. Pre-merger USAir made no investment at all in the place allowing it to grow old, tired, dirty, and dingy. It still had CRT flight info monitors many of which were so old you could barely read them. The investment Delta is making in that Terminal shows just how badly out of date it had become.

        But hey they were making money and in a place in the market where a major investment in product probably wouldn’t have helped them much. So why spend on it?

        But I don’t think half measures and a minimum investment in the product is the best idea for a carrier their size. Were it my call to make as a CEO I’d set a deadline (probably 3 years out depending on the scope of work) by which time the product should be consistent across the board. But in this case my impression is that 3 years from now their product will still be all over the map.

  2. You make it sound like all 767/757’s in the world are terrible airplanes, but I like both. Isn’t it more what each airline does with those airplanes that can make them bad and not the aircraft themselves?

    1. David SF – Didn’t mean to make it sound that way. Yes, it’s absolutely
      what each airline does with the airplanes. But these are airplanes that
      have had so many missions with so many airlines that they very often do end
      up in all kinds of crazy configurations.

  3. Eventually after the Delta/Northwest merger, the bar was set really high. Delta poured money into everything (look at LGA branding after the swap with US Airways). US Airways was all about limiting spending and not upgrading the onboard experience, like Brett notes. American, well, just remained oblivious. Now, Doug & Co. know that in order to actually ‘compete’ with the big boys, especially Delta, they need to spend money. It’s about time too. The US Airways fleet is very standard and the American fleet very outdated. If you can’t make your employees happy, might as well try making the passengers happy.

  4. My last flight on American to Malta via London, I think, reminded me of going to the Walmart. The food was bland, not unusual, but bland. The cabin was full of crying babies and loud passengers, but worse were some of the cabin crew who managed to pierce my noise canceling headsets as they conversed with passengers two aisles over the four seats forward. Most attendants that went about their business professionally, but two that seemed to prefer including us all in their conversations.

    1. What exactly was AA to do about your travel companions? Kick them off the flight? If being away from the teeming masses is essential, there are certainly other options, including shelling out for the Flagship suite or business class.

  5. Brett,

    I used to not care about “branding” but that was back in the day when all I used to do was fly economy and everybody offered a consistently crappy product.

    But then I started flying in premium cabins, and realized it sucks when airlines market the hell out of their newest product, but it’s only available on a limited set of routes. And sometimes, even then, the route itself is no guarantee.

    Point being, if I can’t count on getting that great new product, its mere existence isn’t enough to sway me towards that airline… you know, sorta like United selling me a ticket between Chicago and Milwaukee… they’ll sell me a ticket, but I won’t even be flying United.

  6. These $2B in “product improvements” are improving the experience for the few people in the front of the plane at the expense of the many in the back of the plane.

    To those of us in the back, seat-back TVs and WiFi take a back seat to our comfort.

    I’d gladly ride in an old MD-80 with only one middle seat per row with 33″+ pitch than a new A320 or 737 with 30″ and two middle seats per row. I’d gladly ride in an old 767 with only one middle seat per row and two aisles and 33″ vs. a new 777 that’s cramped with narrow 10-across seating and 30″ pitch in hard “slimline” seats.

    While American and the other legacy US carriers — soon to be joined by JetBlue — continue to worsen the flying experience, I’ll continue to travel domestically on Virgin America and Southwest, and internationally on foreign carriers.

    1. That doesn’t make any sense. Southwest’s seats are the same now as all the other legacy since they moved from 32 to 31. Most legacies, depending on planes, are in that 30-31 bracket, with the occasional Spirit bumping you into a bruising 28.

    2. My thoughts exactly! As an infrequent flier (~5 times/year) who lives in Dallas you always have that conundrum of whether to fly non-stop on AA as lowly Coach passenger or fly the far superior JetBlue or Virgin with a likely connection. Opening up Love Field has been an awesome by allowing non-stop competition to AA with Virgin and Southwest. Once I use up my AAdvantage miles you may never see my on AA again.

  7. DL has always, but especially since the merger, done a great job with branding and other than a dip in the mid/late 90s, have always had a decent cabin product… That said, I’m hoping the latest annoucement from AA is just one of many that we’ll see in the next 2-3 years. And frankly, if all the fleets got wifi, streaming video and USB/power, I think that’d be just fine. In-seat video is going to be a thing of the past in the not-too distant future, anyway. I hope Doug & Co can at least shell out that much $. He said to all company leaders that he acknowledges AA is not US, and that the not spending strategy at US wouldn’t work at AA. Let’s just hope his pockets get a little deeper as we move forward. If not, AA won’t be the “great” he’s going for.

  8. Brett-

    For the 757s, it’s unclear whether the West Coast – Hawaii ones will be upgraded or not- the post says so in one paragraph, only to say not in the next.

    I won’t really miss the Mad Dogs myself. While I suppose they are better than taking RJs from DFW, and the 3/2 configuration is nice, they always seem loud and dirty (showing the cabin’s age) when I fly them.

  9. So just a comment about the USAirways 757s that are doing the PHX -> island flying (maybe not HNL). They’re really old. And apparently, for a almost 5 hour leg, at least the two we took (PHX -> KOA and LIH -> PHX) have no changing table in the bathrooms for diapers.

  10. CF,

    Did you notice they mentioned nothing about the sUS 321 fleet, which at over 100, is the largest A321 fleet in the world? Other trivia, AL/US was at one time the largest DC-9 operator, with 89 Series 30’s?

  11. Here’s what I don’t get about the 757: everybody (including this post) says it’s a unique workhorse and airlines have no good replacement for many of its missions. Yet, production ended a decade ago precisely because airlines stopped ordering new ones. So: why?

    1. Great question. Most importantly, the 757 did very well for itself and
      many airlines ordered the airplane. But as the A321/737-900s became more
      capable, the missions that needed 757s shrank dramatically. With that,
      there were already plenty of 757s out there to fill the needs on the
      remaining niche missions. No need to build new airframes when there are so
      many on the used market that are easy to obtain if you want them.

  12. Given that I almost always fly in coach, I’m a fan of the 767. With the 2-3-2 configuration, only 1/7 (14%) of passengers are in a middle seat. That’s the best ratio of any airplane. In addition, I can have a window seat and be only one seat away from an aisle. Those are 2 good reasons for airlines to keep flying the 767 plane, but the legacy airlines don’t even pretend any more to care about any comfort issues for passengers in the back of the plane. Those seating arrangements are more important than wi-fi or individual TV monitors.

    1. Can’t agree more, of all the wide bodies the 767 has the best “back of the bus” configuration. If a flight is +4 hours I have specifically sought out this aircraft. Sad to see if going away. Also love the 757, the A321 is super bland like most Airbus (personal view) and the 737-900 is just another 737…meh. The narrow body market needs another option than the 737 vs. 320 duopoly.

      As for AA product, how times have changed. Per DL/NW merger I flew to MIA quite a bit and always took AA over NW because their on board product was better. Today I would take DL over AA 10x over regardless of route. Given the mess of planes and experiences it’ll likely be a few years before I consider AA again.

  13. Correcting some of your misinformation:

    1) The 757s have been getting new interiors in coach for the past few years with brand-new seats, LCD sidewalls, AC power and overhead LCDs. There are only 16 757s left in the old configuration.

    2) The 763s with the old seats will not fly to Europe whatsoever effective approximately July 2015. They absolutely will be isolated, and this is because the terms of the JBA with BA/IB/AY require AA to use only full flat beds; AA is already missing the self-imposed deadline of January 2015.

    3) The 763s have powerports in business and Main Cabin Extra. Old interiors have DC; new interiors have AC.

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