FlyerTalk Forums - LUS Management Shift to Building AA as a Premium Airline (?)

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- - LUS Management Shift to Building AA as a Premium Airline (?) (https://www.flyertalk.com/forum/american-airlines-aadvantage/1904807-lus-management-shift-building-aa-premium-airline.html)

Quote:

Originally Posted by SNA_Flyer (Post 29661069)

That indeed was a market leading hard product at the time, however the soft product was not something I'd consider premium.

I can't say that I found LAA and LUS J soft product that different, either, though admittedly I'm not overly picky on my airplane food and sparkling wines. (To this day I tend to find LUS crews more friendly, though this may have to do with the smaller number of J seats in the Airbuses vs the Boeings.)

Quote:

Originally Posted by Fanjet (Post 29662709)

I think people are conflating two different things with Parker's statement. He did not say that he was trying to transform AA into a premium airline. He said his intentions are for AA to offer a "world class product". And in that sense, AA is in the process of accomplishing that. However, that doesn't mean that every product AA offers (such as Basic Economy) is going to be world class, let alone "premium".

Ah, the literalist interpretation, I hadn't thought of that. Really good point. If they buy a single unit of a really nice F seat, install it in 1A of one 77W somewhere, and poach a single SQ flight attendant to personally serve just that passenger, then they'll be able to say that they offer "a" world class product. Not plural. How clever!!! Yay, semantics!

The rest of us will just be waiting and hoping that maybe we'll stop finding used kleenexes in the seatback pockets of our E145s.

Quote:

Originally Posted by SOBE ER DOC (Post 29662577)

I'd like to believe what Parker is saying, but the actions of AA speak much louder that Parker's words. Building a premium airline is about more than have a premium product on a few routes. The true premium carriers have built out a premium product on EVERY route. Does that mean that AA has to install lie-flat seats on E-145s and serve beluga caviar at check in? No. But what it does have to do is exceed the service of its competitors and provide...wait for it...a highly consistent experience. This is where AA falls flat. Illustrative examples:

1. AA has an inconsistent hard product on its mainline domestic fleet. AA's planes are all over the place. They are three years post-merger. This should not happen. When I board a mainline flight on DL I know the plane will have wifi, powerports at every seat, etc., etc., etc.

2. AA needs take a hard look at what they offer on their regional carriers. E140s, E145s and Dash-8s? These are not the aircraft of a premium carrier. I get it, you can't fly a 789 into MDT (Harrisburg, PA) but when your competitors have all but phased out these aircraft and you haven't, it's hard to argue that you are offering a premium product. Boarding an aircraft that is rundown, filthy with trash in the seatback pockets and popcorn all over the floors does not make a premium product.

3. AA has an inconsistent soft product. Some flights give you PDBs in F and some do not. Seem totally at the whim of the FA on the flight. May seem petty but you would NEVER experience this on QR, CX or any true premium carrier. Premium service is consistent, predictable and should make one feel valued and special. There is little AA does that fits this bill. Speaking of inconsistency, I have have some of the finest FAs I've ever flow with on AA and some of the very worst FAs I've every flown with on AA. Some try to make it a LAA / LUS thing, but it's not. There are serious inconsistencies in service excellence on this airline. Yes, the FAs are there for my safety, but on a premium carrier they are also there to provide a premium service.

Some of this may seem petty, but it's not. It is what separates an average airline from a premium airline. If AA wants to be a premium airline it need to figure these and many other things out. It's lovely that JFK-LAX/SFO are premium experiences but I'm expecting my ORD-FLL, ORD-PHL and ORD anything to be a premium experience. Until it is, AA is just another airline that I use to get from point A to point B

I don't necessarily agree with all of this. DL and UA still use lots of one-class regional aircraft like the CR2 and E145. There is absolutely a place in the fleet for this type of aircraft because it makes economic sense for many markets. AA is however behind DL, and perhaps even UA depending on the route, when it comes to upgrading to at least two-class aircraft. Take ORD-MDT. UA runs mainline 1x a day and 2x E1175/CR7. In the summer this is upgraded to two mainline and one regional flight. Meanwhile, AA alternates between 2x E145 and 1x E175 and 1x E145 and 2x E175. AA definitely could improve its product to compete. That being said, I don't expect every route ex-ORD to be premium. But certainly business markets with heavy competition.

Quote:

Originally Posted by Fanjet (Post 29662709)

Anyone who understands Doug Parker should understand that this was what he meant. He is trying to offer premium products where there is a market for it, but he certainly will try to retain the economy market where they can effectively compete in that market.

People on this forum want a consistent "premium airline," but that was never DP's approach (and hasn't been LAA's in a long time either)

Yes, it will result in an inconsistent product and it will be extremely difficult to straddle the divide of being two entirely different types of airlines (with the same brand), but he thinks that is the way to go and he has gotten a lot further in his career than I have, so I would give some deference

Quote:

Originally Posted by Fanjet (Post 29662709)

Yeah.

Doug Parker and LUS management have always been about effective market segmentation: drive down costs to what customers are willing to continue to pay for. Sometimes they try something, it’s a step too far, and they retreat. For example, US cut free sodas in coach but quickly found that the competition wasn’t following and they were losing more revenue than their cost savings, so they retreated.

What’s new to Parker with the LAA network is that it’s possible to segment up as well as down. From his LUS experience, he didn’t think there was a market segment that was willing to pay a premium that justifies the cost of three-class F and real F/J lounges. He’s apparently discovered that in fact there is, on some routes. And he’s willing to cater to the market where it exists.

That’s all entirely consistent with segmenting down on most domestic routes, where American (the country more than the airline specifically) customers have voted with their wallets, indicating that the 737 Max 30” seat pitch and cramped bathrooms are not a step too far (that is, lost revenue does not apparently exceed the cost savings and increased revenue due to the extra seats).

And fewer F seats on those 737s for upgrades is certainly consistent with segmentation: if you want to sit in F, AA generally has F seats to sell you.

All that said, though I can buy the business case from AA’s point of view, I now book away from AA. Since I moved from being based at PHL to YYF/YLW, that has (unsurprisingly) been entirely possible. I fly AS, which hasn’t (yet?) gone this route, even when it involves paying a bit more, and haven’t set foot on in AA-branded airplane since I moved.