In a move it says will allow it to “provide an even higher level of support in the future,” American Airlines plans to outsource hundreds of customer service jobs from the USA.
American Airlines Plans To Outsource Customer Service Roles, Slash Jobs In Phoenix + Dallas
As it attempts to improve profitability and more effectively deal with customer service issues, American Airlines believes the path to success includes cutting positions for US workers and outsourcing those jobs. It plans to cut:
The job cuts are effective March 30, 2024. These employees will be invited to apply for open positions in the company, including 135 spots on the new “Customer Success” team. Those who do not take a position within the company will be offered a severance package and help finding other employment.
By outsourcing some of these roles, American says it can offer more reliable 24/7 support on “lighter-touch problems” including lost luggage and certain AAdvantage loyalty programs. This will allow remaining US-based workers to focus on more complex issues.
Rather than maintaining several numbers based on the issue, AA plans a single customer service telephone number that can then redirect calls to the appropriate department.
“Today, we announced updates to our contact center organization that will help us better serve our customers. As part of these updates, we are creating a new Customer Success team that will be dedicated to providing more convenient, elevated support to American Airlines customers with some of their most complex travel needs.”
American began establishing “international customer service teams” in 2021 and claims the groups have been successful. It is not clear to which country these jobs are heading.
CONCLUSION
American Airlines plans to lay off over 600 of its customer service workers while ramping up hiring outside the USA. It claims this will streamline service and lead to better outcomes for consumers.
Finally, a personal word.
For nearly 15 years I have written this blog and for 20 years I have closely followed the airline industry. I understand the allure of being able to hire dozens of agents in India or the Philippines for the price of one American worker.
But in my experience, it simply doesn’t work. These agents, while well-meaning, lose whatever competitive advantage they have in terms of labor cost by the slow and often inflexible way issues are handled. Most of the time, customers are placed on hold so that these agents, poorly trained and not empowered to offer any solutions themselves, can contact their “support desk” to help on what should be very simple matters like schedule changes or flights that have not credited. The end result? Both a US agent and a foreign agent are occupied to get a small issue taken care of. That’s inefficiency, not efficiency.
Wall Street may love outsourcing (AA stock is up on the news), but I cannot recall a single case in which I have received better, more efficient, customer service from a foreign call center.
Thank you- well said. I still recall the frustrating days of trying to find United partner award availability with their offshore call center (in the days before you could search partners online), and even today dealing with IHG’s customer support in what I believe is the Philippines is an exercise in frustration.
Many of us have deafness problems , and we cannot understand any soft-voice , heavily-accented off-shore representatives . Moreover , when computer AI voices are used , they never address the issue we are asking about . Although I have a special phone , I have stopped bothering with any customer service phone lines . Anyhow , I do all my business at an airport counter , where a manager is present . =
Outsourcing has a bad name because most companies are myopically focused on cost cutting. There are many “premium” providers of BPO services that hire native-English speakers and deliver better service than the clients do directly. The problem is that the cost of these providers is more than the “way offshore” providers, but still 50% less than domestic labor expense. The question is whether American will race to the bottom in India, Philippines and South Africa or invest properly in domestic and nearshore companies.
I agree completely. American needs to shift from having inept management to having actual leadership. Unfortunately that means removing most of the Board who continue to enthusiastically support the ULCC AmericaWest people who drove the airline into this situation to begin with. AA has a very high cost structure. That leaves two realistic options: drastically reduce the cost structure for labor which is largely driven by pilot pay or improve AA so that people actually want to fly your airline. Instead, American is characteristically doing neither of the two choices that would alleviate the situation but is making shortsighted moves like this that will ultimately cost them more money.
@ Matthew — I wasted an hour and a half MAYBE fixing a problem with AA yesterday. The agent could have completed a satisfactory resolution in 10 minutes, but instead they were required to send me through a bunch of poorly thought out steps to have AI rudely resolve my issue. Not a hopeful sign for the future. Obviously, my time doesn’t matter to AA.
@Gene … +1 .
Too bad they are not unionized employees; thought the cuts may still be made, at least there would be a negotiation on the number of redundencies and the benefits they would receive. you are correct, worse customer service to ensue.
Keep the phone reps. Outsource the flight attendants.
Important point – this only impacts the non-union contact centers (handling customer relations/complaints, AAdvantage account help, and lost bags). The Reservations folks (who are unionized) represent the vast majority of contact centers, and are not going anywhere. They handle all ticket-related transactions. Notably, as part of their new union contract (literally 3 weeks ago), they cannot be let go if they were working at contract time. Very smart move! So the company’s response to the union protection is to cut almost all of the non union centers. While there is a need to cut costs, this is a huge slap in the face to these folks. It never made sense to have a mix of union and non-union contact centers in the US (UA does not) but if you’re going to, don’t do it this way.
Agreed, a very big slap in the face, especially since those employees are US taxpayers whose hard earned tax dollars helped bail American out during Covid. Thanks for the bail out US employees, we are going to show our thanks by outsourcing and terminating those who contributed to our success!
@Matthew, in principle I agree with you (as I do most of time) but I do have one time where I received more than I was owed from an oursourced call center.
It was circa 2005, I had a ticket in First Class JFK-IAD-LAX, my JFK-IAD flight was delayed by 5+ hours which would have caused me to misconnect at IAD.
I girded my loins and called the UA Res line which had been oursourced to India for all non-Elite passengers, the agent was absolutely clueless, it was comical how bad he was, but after helping him, he was able to offer me JFK-LAX in PS F (which cost way way more than my orginial ticket and violated the fare rules of my ticket) and I said yes please ticket before he had a chance to think about it.
He put me on hold, did whatever he had to do to ticket it and I got to fly on UA PS F which cost thousands more than I paid for my JFK-IAD-LAX ticket.
Oursourced call centers are usually a massive downgrade, but sometimes they are so poorly trained that it can work in your favor, it is rare but it does happen.
The only time I recall it helped to call a foreign AAdvantage call center was to book an Etihad award back 7-8 years ago. I recall reading your blog or Lucky’s where you guys gave a tip to call the Australia AAdvantage call center (actually located in Fiji) to book an Etihad F award since they somehow know how to do it or see the space correctly (compared to calling the US number).
The foreign desks you’re referring to are outside the US, but are not outsourced and often you get more experienced agents in these centers. If AA sometimes wanted to route calls to Singapore or Australian call centers to balance call loads, I don’t think most of us would know the difference in terms of quality of support. This is about hiring lower skilled contractors and giving them the most basic of training. If you come into contact with them, you will know the difference!
If these lower skilled, lower paid workers are truly for “light touch” issues only, and are a first pass for non-elite customers to filter out easily resolved issues, I get it. AA needs to cut hold times, which we also complain about, and a lot of that hold time is taken up by agents dealing with light touch issues in bulk. But they need to exempt elites from going through this first pass, and the agents need to be able to pass complex issues for non-elite passengers through to the next level (not put them on hold and play telephone with a support desk, but actually pass the customer through to a more experienced agent). If this turns into a Miles-And-Smiles transformation of the AA support desk, that will end my loyalty.
Outsourcing is always about lowering costs for the company, nothing more, regardless of the quality of the people hired (and not all outsourced call centers have low skilled workers as well).
I kinda resent that you have no distinction between Indian and Philippines call centers. The latter is vastly superior
Last year I needed to call UA customer service. Instead of English language service kine, I called Asian language customer service phone number. To my surprise, the customer service agent answered my call was based in Texas. He truly understand my request and tried his best to help me.
My experience lead me to understand why UA earn money on transpacific flights but AA did not. AA had to give up flying to Japan and China completely from Chicago even before Covid.
It’s a shame because I feel like the EXP line is one thing AA does right. Hopefully that won’t change. When you consider how terrible JL, BA, QR, EK, AC, TK(!), and many other airlines, that often are quite premium can be, you almost yearn for the “quality” of US carriers phone lines.
DL’s call centers were terrible for the year I was Plat (2021-2022), maybe they’re better now… but it seems like outsourcing call centers is an inevitability. I don’t think offshoring is the problem, I think empowerment is the problem. Hopefully they address that.
Looks like we’ll be talking to Ahphu again. Thank you, come again!
So before stating our request/s, the question to ask at the outset now will be … What form of English do you speak?
I have personally implemented offshore delivery centers multiple times from everything to hunting for office space offshore to hiring 250 employees in 3 years. That’s also how I got my status on AA, UA & DL (and Virgin).
You’re quite right about service being awful if you replace an American worker with someone offshore who looks similar on paper. The key is to hire someone with a much better resume and focus intensely on communication skills while hiring. It might cost 2x of the cheap worker but it’s still 50% of the cost of the US worker. Then you have to train these workers intensely and monitor their every move. It can definitely save money in the long run AND provide better service, shorter hold times etc. But it’s going to be more expensive in the short term.
AA needs to bust up it’s unions
Dude, you’re not supposed to DRINK the bong water. The reason that service is about to suck is specifically because these nonunion people are getting fired. In this context that means unions = good.
Considering baggage service a “soft touch” operation is a mistake I think for an airline with the worst baggage performance now is not the time to soft pedal baggage tracing. Baggage tracing requires a detective like approach and keeping files updated and being agressive in getting mishandled bags back into the hands of owners asap.
Who says AA isn’t a true International airline? Their call centers will be in Bangalore and Manilla!
In a race to the bottom, never bet against HP dba US dba AA!
Your experience mirrors my experience. I think AA continues to make bad decisions.
And then people in the USA complain about job losses ! LOL No wonder the country is falling flat on its feet. Purchasing Chinese made goods by the boatload, seeking lower prices and lower quality to save a dime and then wondering why the US is losing its ground as a respected entity !!! Can’t have it both ways
I spent over 6 hours with an Advantage customer care representative. As noted in the previous comments, the service was terrible. The agent mentioned he is based in Monterrey, Mexico. His way of treating me almost felt similar to the bad service I get when flying with a low-cost Mexican airline like Volaris. I hope that American Airlines is at least able to hire capable and trained representatives, considering they are already saving money from sending the service offshore.