Analyzing American Airlines’ ‘Roadmap to ‘Long-Term Success’

By Paul Riegler on 25 January 2019
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American Airlines unveiled its plan to improve corporate culture and the customer experience in 2019 in a memo to employees.

The airline set forth very specific goals under three top-level objectives.

“These short-term goals will help us achieve long-term success and will change each year as we prioritize and focus where it matters most,” it said in the memo.

The three-pronged plan calls for making the airline’s culture “a competitive advantage” as well as creating a “world-class customer experience.” It also calls for building the airline “to thrive forever.”

The airline wants 2019 to be the year it leverages the benefits of its merger with US Airways, with the enhancement of its in-flight offerings, improvement of the airport experience it offers, and improvement of overall safety and reliability. It also wants customers to be more “likely to recommend” American by virtue of what it is undertaking.

To that end, it will complete the rollout of its international premium economy cabin as well as of satellite Wi-Fi and live TV on its narrow-body Boeing 737 and Airbus A319/A320/A321 fleet by the end of June. It will install larger overhead bins in one-third of the fleet by the end of the year, and seat power will be in 88% of its entire fleet by year-end.

The Fort Worth-based airline said it will deliver “customer-focused airport and world-class lounge construction and development,” which means completely new concourses and gates (in some cases, such as the concourse at LaGuardia Airport, which just opened) at Dallas/Fort Worth International, Ronald Reagan Washington National, Los Angeles International, Boston Logan International, and San Francisco International airports, as well as at LaGuardia.

American also wants to improve corporate culture, given the dismal results of its most recent employee service from November of last year in which only 41% of employees said that the airline’s management makes “the right decisions that take care of customers” and only 32% said they believed that the airline’s leaders listen to and “seek to understand the frontline team member experience.”

In order to improve its culture and make it a competitive advantage, the airline is rolling out a new employee recognition program, introducing new uniforms that replace the current attire which many employees complained caused allergic reactions, improve compensation to ensure it is “industry leading,” with the goal of running “the safest and most reliable operation” in its history.

The airline also wants to build a foundation for the future, to ensure that the airline would “thrive forever.” To that end, it said it expects $1 billion in incremental revenue from product segmentation such as basic economy and premium economy sales; network enhancements such as operating flights with joint venture partners; and upselling such things as upgrades after the initial ticket sale.

American said it expects to lower its costs by $300 million “by eliminating post-merger redundancies” and holding cost growth with the exception of fuel and raises in new labor deals to 2%.

(Photo: Accura Media Group)

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