Tuesday, June 5, 2012

American Airlines – Part I – Today & Tomorrow

American Airlines – Part I – Today & Tomorrow:
It is easy to look back into an airline’s history, or any company’s history, and pick it apart, but all that matters to any company fighting for survival is where they are today and where they are headed tomorrow.  It is no secret that American Airlines, once the World’s largest airline, has fallen to the third largest in the United States, lost US$1,980,000,000 in 2011, is in bankruptcy and is fending off what is essentially a hostile merger by US Airways.

In early May I spent a number of days inside the American Airlines network, speaking with executives to rampers, corporate communications to gate agents, pilots to station managers, tower controllers to flight attendants and anyone else I could find in Hartford, Dallas, Los Angeles, New York and Chicago to get a better sense of where the airline is and where it is going, not as seen from public looking in, or news articles focusing on one aspect of the airline depict it, but from the perspective of inside out.   There are many aspects to an airline operations, revenue and future that are not glamourous and rarely catch the eye of the public, but with millions of dollars being saved or revenue generated they are an important part of the airline’s future.

I expected American Airlines’ corporate communications handlers to shield me from freely seeking out people to speak with and was prepared to be stonewalled by the front-line staff because of tense issues between labour and management. While I found some people interested in discussing labour relations, which is not what I was researching, what I encountered was people on all sides of the airline focused in the same direction of moving forward for the betterment of the company and an improved passenger experience.

American Airlines, today, is moving itself forward. The airline has committed to innovation and change in its operations and exploring new revenue channels in ways other airlines have not developed yet, or pursued to their fullest extent. While innovation is good, the timing for American Airlines was to late and not enough to keep it from bankruptcy, but it has found a way to move forward, which is important to survive bankruptcy and take over.

As American Airlines moves forward to exit bankruptcy the airline’s customer satisfaction is increasing. This increase has to do with improved terminals,  reduced lost and delayed bags, redesign of check in lobbies that make the process quicker, an increase in customer service and customer support, a more in depth understanding of the airline’s frequent flyers and what has been described by travelers as a change in attitudes towards passengers.

What sits on the horizon for American Airline, looming like a black cloud, is the company’s emersion from bankruptcy and US Airways seeking to merge with the weakened airline.   While on paper the US Airways merger makes sense, and has won the backing of a number of the American Airlines’ unions the reality of this merger could kill what American Airlines has been moving towards, inside and out.

While US Airways’ CEO Doug Parker promises the American Airlines name will remain, should a merger occur, what is more important than a name is the corporate culture, alliances and customer products.   American Airlines has been increasing its premium products, even while announcing its removal of first class from some international aircraft; the overall premium products, soft product and hard product are increasing, while US Airways has been steadily focusing on aspects other than premium passengers or customer service.

The merging of the two airlines would result in two combined organizations, with 117,000 employees, two sets of management and three different internal airline labour cliques that do not play well among each other, what would outwardly suffer would be the passenger experience.  Customer service is paramount at one airline and seemingly an afterthought at another airline.

Despite the theoretical merged airline adopting its headquarters at Dallas-Fort Worth International Airport, retaining the American Airlines name, the US Airways management teams will take over the carrier … and historically … would result in a significant internal divide that would last a very long time.

So what needs happen if US Airways forcibly merges with American Airlines?

Should a merger occur, US Airways’ fiscal management needs to take the reigns.  US Airways has proven time and time again they are superior at turning a profit, while at the same time alienating many of their passengers.  While US Airways fiscal masterminds take control, the American Airlines name and brand must be put forward, as well as allowing the company’s innovations, customer service, marketing and premium products to continue growing.

Yes, Mr. Parker says American Airlines would be the surfing name … the reality is that American Airlines must be the surviving brand.

Today the airline is in trouble, but tomorrow, the airline has a brighter future either on its own or as the surviving brand in a merger, rather than being taken up and discarded.

Having spent years flying within the US Airways network and spending an  intense number of days within the American Airlines network, the passenger experiences on the ground and in the air were considerably different.

As I was left to my own devices to largely explore each American Airlines hub, unescorted in the public areas, I found the focus at every gate, on every flight, in each terminal was on putting the customer first. Yes, there were exceptions to this rule, but a corporate culture is being built that despite fractures between management and the front line, the frustration is not taken out on the passengers.

Can American Airlines survive on its own?  It’s parent company holds the exclusive rights to present that case to the bankruptcy court, but the airline has made wise decisions on updating its facilities, rejuvenating its fleet and creating new revenue streams.

Overall what American Airlines is doing today is not what would be expected from an airline going through bankruptcy.

Over the next few days I will discuss different aspects of American Airlines that are generally not seen by the public that are generating revenue, reducing costs, increasing efficiencies and improving the customer experience … because where the airline is today is not what you see when you enter the terminal, set foot on the plane or read a new story. There is much more setting the airline apart from what ‘what was’ and ‘what is.’

Below are a few photos shot while exploring American Airlines.

Happy Flying!


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