You wouldn’t be foolish for wondering if American Airlines was throwing everything against the wall lately, just hoping something would stick. But I’m going to give American Airlines a bit more credit.
Yesterday, I discussed AA’s mad dash to innovate, including new longhaul service from Seattle and new partnerships with Alaska, GOL, and Qatar Airways.
Is there a coherent logic tying together these distinct moves?
I’d say YES. The goal is to offer an alternative to Delta.
First, American Airlines finally woke up and realized that the status quo was not only failing to produce progress, it was actually regressive. Stockholders? Angry. Employees? Angry. Passengers? Angry.
But while that should have prompted change years ago, it was Delta’s poaching of LATAM that was the straw the broke the camel’s back.
What else prompted the mad scramble to partner with GOL and Alaska?
It was a belief that AA was being left behind; that Delta was not only growing in stature and profitability, but doing so at the direct expense of AA.
The link-up with Alaska Airlines makes a lot of sense. Alaska is a west coast carrier with strategic service to Hawaii, New York, and Washington, DC. American Airlines is a carrier that is weak in the Pacific Northwest. It’s a positive match for consumers too, especially if Alaska maintains that basic structure of its Mileage Plan program.
What about Qatar Airways? How did this come about after American so derisively spoke of its oneworld partner for many years? Part of it, I suspect, was the collapse of Air Italy. With Air Italy’s collapse, so collapsed the narrative that Qatar Airways would sustain an airline hemorrhaging money. But while that may have been the final impetus for the link-up, American Airlines recognized the untapped potential it had to put Qatar Airways passengers on its own metal. Passengers love Qatar Airways. Why shouldn’t American Airlines be the feeder to/from Qatar’s U.S. gateways?
Now AA Management Must Inspire Employees
The strategy is in place. But that’s not the entire battle. All the partnerships in the world don’t build much sustaining loyalty if employees hate their jobs or resent management. It always shows…there is no way to hide it. Capitulation, like the foolish move to proactively offer raises instead of saving that carrot for contract negotiations, isn’t enough. If employees are well-paid but don’t see direction, they will flounder. I’ve seen that in my own work and I’ve certainly witnessed it as an observer of the airline industry.
Inspiration starts with communication. Management must be transparent about its goals and expectations and win the confidence of its employees by following through on its words. That starts with inking labor contracts, but doesn’t end there. Front-line employees need a product they are proud of; not a product they must apologize to customers for.
CONCLUSION
As much as we can fault AA for taking so long to move, at least it is now moving. Some of its recent moves, like the announced build up in Miami and partnership with GOL, are defensive. Others, like its build-up in Boston and Seattle, are offensive. AA’s inertia wasn’t enough to keep pace with Delta and even United.
We’ll have to wait and see what sticks. Maybe Seattle to Bangalore will work, maybe it won’t. Maybe AA’s expansion to more markets in Central Europe is smart, maybe the revenue just isn’t there.
But recognizing the problem and emulating success (i.e., Delta) is not a stupid strategy.
And every single move American Airlines has made lately has the potential to make a better airline for investors, employees, and customers.
Now AA needs to sell this new and fresh vision to employees, reminding them that they are a critical component in changing AA’s direction in a positive way.
image: American Airlines
AS an AA employee I can say that all problems rest with upper management. They didn’t know how to run this airline. They thought that all they had to do was merge and give everyone a small raise. When the mechanics and ramp agents received a raise over 3 years ago, Parker kept saying that he only gave us this raise because “It was the right thing to do”. But if he told the whole truth things would have been better. The truth was that we had to give a “helping hands” agreement which the employees hated. He never acknowledged that we had to give up something in order to get that raise. Now we have an offer on the table and once signed morale will go up just like it went up after that raise 3 years ago.
Parker could have kept almost all of those interline agreements that US Airways had from Star Alliance but he dropped them all, leaving money on the table. He ended the Etihad and Qatar codeshare which was stupid because Delta was upset with those airlines, they were actually friends of AA. That was over $50,000,000 a year lost to the airline each year. And he was about to lose the Alaska code share too. I think the BOD put the finally had to step in because things were really bad.
Hopefully things will only get better and better from here and the airline and employees will thrive.
We love the additions of SEA and BOS hubs. We love the new code shares and striking back to DL and Latam. AA finally realizes that it was the run and airline and actually do work and not just put two airlines together and think that things will work out. We are finally moving in the right direction.
Why don’t we ever see articles like this about Delta- either on this blog or other blogs? Its fascinating there are endless articles analyzing Americans and United’s financial strategy, route choices, products, etc, but no one besides Rene ever writes on Delta. Why?
Delta offers a good product for business travelers who fly primarily within the United States, but from the standpoint of a miles and points blog that discusses premium cabin international travel, Delta doesn’t shine quite as much.
It’s well understood that SkyMiles are of fairly low value. SkyTeam offers fewer perks than the other alliances, and no real luxury airlines. They provide no access to first class travel, and DL’s international product isn’t measurably better than UA or AA. Their lounge offerings are inferior.
It’s easy for Delta to shine within the United States, but globally they’re really nothing special.
It’s not about what “shines,” its about what people actually use. Tons of people fly Delta, collect their points and use their points, including on international premium cabins. Importantly what they do also impacts American and and United. It would make sense to cover them in more detail
You’re not wrong in the points you highlight.
Lucky has written about the one-off/occasional flight on Delta, and he usually comes away more satisfied than he would otherwise be on AA or UA…and then the fanbois for all 3 airlines fire their shots without reading or comprehending what Lucky actually wrote.
As far as a deeper analysis, that would have to come from Rene/Chris or Lucky. I don’t get a sense Matt/Kyle or Gary fly Delta but once in a blue moon (and maybe not even that frequently!).
What specifically would you like to see? I wrote about Delta’s surprise move with LATAM. I’m happy to offer my thoughts on Delta’s direction, which is international growth through JV partners and robust operational reliability on domestic routes.
DELTA IS NON UNION.
YIU GET TERMINATED IF THEY TALK.
AFTER A FEW GIN AND TONICS ON A LHR LAYOVER, DELTS F/A’S TALK!
ITS NIT PRETTY.
DELTA’S BALANCE SHEET?
OF COURSE IT LOOKS GOOD.
THEY DID NOT BUY NEW PLANES LIKE AA.
AA HAS THE YOUNGEST FLEET IN THE INDUSTRY.
DELTA FLIES OVER 30 YEAR OLD 767,S80,757,717.
DELTA HAS NO 777300 OR 787.
DELTA IS Waiting for boeing 797.
It’s on the drawing. Good luck with that.
In fact the AIRBUS A350 Dektas is getting is the USAIR order AA CXLD in opt for 787
“But recognizing the problem and emulating success (i.e., Delta) is not a stupid strategy.”
Problem is, I’m not convinced that Discount Dougie and the rest of the America West gang actually recognize the entire scope of the problem. The tie-ups with QR and Gol are certainly good, and the moves in SEA and to move closer to AS are…thinking outside the box, though I’m not sure I understand the logic. And AA’s long-haul premium hard product is actually pretty good. But then on the other hand, they double down on the “Oasis” concept, are on the road to devaluing AAdvantage to be on par with SkyPesos, onboard premium cabin catering is horrible, and there’s just not much “premium” about their premium cabin service in general. None of these recent strategic moves does anything to address the overall deficiencies of the product, so to some extent, it feels like lipstick on a pig.
I totally agree. I have been EP for the last 10 years. Not any more. The perks for EP have devalued to the point of nonexistence. 4 SWU’s?? Why? You can’t use them. I have been loyal to AA for a long time. They took away the one perk that kept me re-qualifying- my access to a certain agent who booked 100’s of thousands of miles for me. Now I get some random nitwit. Even though I must hub thru DFW, I am heading to Delta. Better product, better service and happy employees who like to make customers happy. Hear that Dougie?? I was so hoping Dougie’s tenure was up…. Once he leaves I may try again, but not before.
I’ll be sure to remember they’re an alternative to Delta as I sit in their 757’s J with IFE visibly removed out of the seat and then connect to a 767 international J flight and get a tablet.
That is a very fair point. Is that a dealbreaker for you?
Absolutely
Maybe the IFE alone isn’t a dealbreaker, but it’s symptomatic of the larger problem I highlighted in my earlier comment – when you fly AA, you have this overwhelming feeling that you’re flying America West. And that’s not a good thing, nor a problem that I think Discount Dougie even recognizes as a problem.
I’d say in the markets they’re trying to expand into – SEA, BOS etc it’s a dealbreaker. The experience in coach on Delta, who has hubs in both, can arguably be better than business on AA these days, especially if you use the cost savings to just get a meal before you fly.
What American needs to focus on is customer service. It needs to start with the top.Happy employees will provide good service Right now they are not happy. They also need to be less ridged. I have been a top tier advantage holder for over twenty years. All achieved by flying not credit card etc. For six recent years I was a concierge key member. I then received a letter stating that they hoped I enjoyed the status which I did but unfortunately I did not do enough to re-qualify. I had just completed 180,000 miles and spent $47,000. Now I do enough to quality for executive plat. which is easy for me. I then fly other airlines especially Delta. American is not happy until I am happy has to change. There are some very good employees
We will see. I wrote in my comment under the previous AA post what you are writing here: the need to fix the people.
Would love to see AA put more focus on customer experience. From rigid and inflexible policies, to agents not empowered to make things happen for customers in need, it comes across as nickel and diming.
No, I don’t want to sign up for your branded credit card. Yes, I do want a video screen on the seat in front of me. And if I’m paying for premium service, don’t feed me the same reheated garbage, trip after trip after trip. I can’t tell you how many times I’ve suffered through a runny omelette with rubbery sausage. Or a dense, flavorless brick of chicken breast with four wilted leaves passing as a side salad.
Would love to see agents excited about their jobs, and eager to help passengers solve problems together. Would love to see flight attendants who are happy, healthy, well-paid, well-trained, and service-oriented. Would be great to have a real strategic vision for the company and the brand that not only AA employees, but also AA customers can get behind.