After the American Airlines first quarter earnings call on Thursday, employees gathered to hear from CEO Robert Isom, flanked by other executives. One question that came up was the kind of customer that the airline is targeting?
The airline insists business travel is returning despite leisure travel taking up the slack. Changes to AAdvantage have been made to reward more infrequent flyers and customers who engage with the program in ways other than just flying, indicating a shift away from laser-like focus on the road warrior. The employee was wondering if the airline was targeting a different customer than before.
Robert Isom said that American Airlines needs to be all things to all people.
We’re the largest airline in the world. Every day we’re out there hunting for 500-600,000 even more customers. To be the largest airline in the world and over the pandemic we carried one out of every three passengers. We have to have a product that really attracts everybody, and in unique different ways.
Part of this is right and part is wrong. Large numbers of people will buy different services if they are offered a quality product.
That means a quality product, not a degraded one, so that they're offering the minimum product needed to attract budget flyers. It isn't possible to be all things to all people.
Employees have complained for several years about being confused about the kind of product they are supposed to offer, whether they are a premium carrier or an ultra low cost one. After checking the fare class on the manifest, employees don't take on a different persona. American Airlines doesn't have a mission statement and they don't spend a dollar more than they need to.
The previous business customer is behaving in different ways, according to the Chief Revenue Officer.
So much of who our customer is is changing in a way that’s a real opportunity for us…the nature of demand is changing…there’s fewer people that do a single day business trip..it’s a huge opportunity because suddenly those people who are flying on blended trips are paying us fares which are pretty close to what business customers are paying. Primarily they’re coming to us through AA.com, our lowest cost of sale channels, where we can create the best consumer experience for them.
…We are seeing more people enroll in the loyalty program than ever before…more international enrollments than what we’ve seen before…the same thing applies to our credit card, more people are not just spending on the card but our spend is growing at or above the rate of inflation.
The airline is adapting. They need to remove the idea that these are all things to all people. They need to have a consistent model of who their customer is, what that customer needs, and put that at the forefront of thinking as they evaluate every policy at the airline. Do you know what decisions make doing business with American more convenient for these customers? What will make these customers happy? Don't ask what the minimum we can give these customers is, even if they are different from us.
Robert Isom will become the CEO of American Airlines in March of 2022. The new boss was the same as the old boss. Before becoming President of American Airlines.
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