As part of its premium pivot, which I revealed exclusively in January, American Airlines has been ticking through a lot of quick wins, like announcing free wifi, bringing back second drink service on longer domestic flights and an end to collecting headsets from business class passengers an hour prior to arrival on long haul flights. They’re adding buy on board options to economy.
American Airlines Philadelphia Flagship Lounge, credit: American Airlines
The airline’s new Chief Customer Officer Heather Garboden appeared in a brief episode of the airline’s employee-focused “Tell Me Why” podcast.
Here’s a key line early in the brief episode,
I’ve been in this business for 20+ years, and for most of that time I think customer experience was really defined as running a reliable operation and getting you to your destination on-time and with your bags. Of course that’s by far the most important. In today’s environment that’s table stakes.
Reader James, who flagged the new episode for me, wrote “You at last got AA to call just being on time tablestakes!” Calling reliability important, but table stakes, has been my specific mantra about American Airlines for a long time.
- Customers will avoid flying you if you aren’t reliable.
- They aren’t the most reliable in any case.
- But to prefer you, you need to do more than that.
- American Airlines is a high cost airline. They need to earn a revenue premium to be successful. An that means offering a product that customers will pay more for.
Garboden says that 55% of customers are millennials and younger generations value experience. Premium demand is holding up, even in the current economic environment (airline executives in April earnings calls talked about domestic coach demand lagging).
I’d note that premium demand doesn’t just extend to premium cabins, which is why small investments in the coach product matter – like United’s stroopwafels, Illy coffee and buy on board program and also their mobile app that is available to everyone.
Henry Harteveldt, who very politely but also pointedly called out American Airlines in a mid-May episode of the Airlines Confidential podcast noted that Garboden comes out of the airline’s finance organization. On the one hand that’s a surprising place to look for someone to spearhead customer-facing improvements. On the other hand, maybe it’s necessary to have the credibility and speak the language of a finance-dominated organization that’s been built on never spending a dollar they don’t have to in he words of their CEO.
In contrast, United’s CFO says they’ll sell more tickets if they improve the quality of the chicken.
Really great American Airlines product elements like the new Philadelphia Flagship lounge, and upcoming premium cabins on the Boeing 787-9P and the (hopefully great) Airbus A321XLR are things that have been in the works for several years. They aren’t really attributable to this new premium focus.
American Airlines Business Class Suites, Credit: American Airlines
That’s why it was significant to hear in this interview that there’s a new customer experience vision and philosophy that’ll be rolled out in late summer or shortly thereafter.
- There is currently a “holistic review of our food and beverage program.” That’s a real reversal from the ‘more modern’ meal service where the airline hoped to make some pandemic cuts permanent.
- What’s more we can expect more lounge space – there really hasn’t been a new lounge pipeline in a long time.
Lounge constraints have been an issue in some of our airports, so we’re really focused on making sure that some of our busiest airports that we have the lounge space capacity for our customers.
Washington National Airport E Concourse Admirals Club
The new lounge template is really fantastic. While food and beverage offerings trail Delta and United, the spaces themselves are genuinely gorgeous. There’s no lounge where I enjoy the space as much as the Admirals Club on the E concourse at Washington National airport. I’d enjoy amenities in other lounges more, to be sure. At that airport go eat at the Capital One Landing! But then sit and work in that Admirals Club. More spaces like that would be game-changing.
In many ways I’m more excited for American Airlines than I have been at any time in the last dozen years. But a lot has to come to fruition to move from quick wins to sustainable improvement that translates into customer preference and economic performance. Still, this represents a huge shift in mindset from where the airline seemed to be a year ago.
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