American Airlines Chief Commercial Officer Vasu Raja appeared on the airline’s show. Podcasts for employees He then explained what he thought about their strengths and the plans they would pursue.
He emphasizes that customers “run the airline,” not the product or experience. [but] “Selling Travel” and “Selling Travel is Easy: Build a great network, reward the people who use it, deliver well over and over again, and do it efficiently.” He What is desired is
- Route networks and schedules that take people where they want to go, when they want to go
- Reliable operation
- Benefits program that encourages customers to choose airlines
There’s a lack of actual actual discussion there. experience Flying with American Airlines: Friendly and helpful employees, quality lounges, and food and beverages. He has long argued that schedules are a commodity.
American Airlines’ new business class suites are here, credit: American Airlines
Chief communications officer Ron DeFeo, who met with Raja, asked about his focus on “the best domestic and short-haul network.”
The raja explained (and Transcription of Eniluria) American Airlines’ core offering is offering optimal schedules to connect passengers from small cities to other cities around the country via hubs and to other cities around the world using American’s partners. That’s it.
In many ways, it’s the core, the foundation, the heart of everything we do as a company…but when you look at the United States and split the country in half from the sunny, warm regions. The same is true. And the north, well the north has a large population…
They have big cities, coastal cities. But in the South, what has really started to change in recent years is that the population is increasing and the economy is growing at a significant rate. However, they are often not necessarily concentrated around the largest cities in the Sun Belt. So for us, it’s a big opportunity. Frankly, that’s the source of our competitive advantage.
Frankly, by luck, we have a huge hub of activity in the Sunbelt. Phoenix, Dallas, Miami, Charlotte, two of his three biggest megahubs on the planet are ours, and I think they’re in the Sun Belt.
But we also operate very large positions in huge population centers like Chicago, New York, and Philadelphia. As I said, it’s a matter of luck, but our advantage is that we can uniquely serve you in a way that no one else can.
We do that with very large mainline jets. We’re talking about the 321 Neo and 737 MAX. We were the first people to go. As we like to say, we were upping the gauge before upping the gauge was cool.
But on the other hand, there are also large regional jets, two-class regional jets. And they allow us to connect all over the world, accessing different cities that many of our competitors cannot access because they don’t have flights.
What this means in practice is that we serve about 300 cities in North America, and in 200 of those cities, we can serve customers with better appointments there.
This means that our domestic system brings in customers, who can take advantage of international flights and participate in various things…
American Airlines’ focus on high-flying countries is reinforced by flying passengers to and from British Airways, Japan Airlines, GOL and Alaska.
At its core is an excellent short-haul network linking the country, Mexico, the Caribbean and Latin America. That’s our great short-range network. This has allowed us to build a series of partners that give us access to a really important, large, high-growth customer base, whether it’s London or Tokyo, or more recently Seattle, Doha and São Paulo.
What our partners bring us is more access to more customers, but what they benefit from is, and frankly, they value us less. The reason we have this is this unique domestic system and the short range system that we have because no one else in the world is doing it. Bring that customer base.
In some cases, there aren’t planes long enough to fly to the South Pacific. This allows us to build long-distance networks that are meaningful for our customers, profitable for us, and deliver vitality and growth.
People focus on long-distance networks. I fly to Doha, London, and Buenos Aires. And we will continue to grow it. We will combine 87, Triple 7, and 321 to grow them profitably. But behind it is a network of partners that makes it possible and feeds customers into it. But the very heart of that doll, its central beating heart, is our short-range network.
This is not a new message from the Raja.eniluria Interpret This means that American Airlines focuses on short-haul flights from its hub airports, and is “much more focused on flying over the United States than Delta or United Airlines,” and on long-haul flights. focuses on partner hub airports.
There is definitely a bias toward winning more small ball games than taking high-paying opportunities with long-distance wide-body flights. They want narrow-body frequencies to fly domestic routes supported by connections through Dallas and Charlotte.
Tactically, American approaches this by:
- “Productization”[ing travel] In an infinite number of ways.”
- American is focused on “AAdvantage and our credit card programs” to help customers “always have access to travel…people are always thinking about travel.” “We want to give people more miles at a lower price and give them more benefits than ever before,” he said.
- American Airlines, not alone, first leveraged revenue management decades ago (“machine learning, before machine learning was cool, large-scale systems for predicting demand; [which] became very accurate over time). My point is that American Airlines’ revenue management predicts that they will sell more seats at higher fares than customers are willing to buy, which will negatively impact load factors and reduce premium passengers. This means they are chasing other airlines that sell front cabins at lower prices.
- Eliminate travel agencies and go “direct to the customer.” He overstates the airline’s digital capabilities, saying, for example, it’s impossible to confirm upgrades online using miles or the entire system, and that the only verifiable upgrade the airline had was One Business ExtraAA has been discontinued.
[American has] We are investing heavily in digital services. As of the end of this year, almost everything you buy in the United States from American Airlines instead of through a travel agent will be serviced through the app. We are the only ones who can go and do it.
Mr. Raja says that selling travel through agents often “creates more complex issues,” so that agents “effectively pass the cost on to the customer, create no service advantage, and do not provide any real “We are moving away from distribution strategies and technologies that do not enable us to provide meaningful services.” Experience the magic of air travel. We are encouraged by the results so far. ”
American Airlines continues to focus on moving away from the high-touch service of managed corporate contracts and working with travel agents who sell tickets. They’re betting they won’t need discounts to fill planes, and that may be true in Dallas, Charlotte and Miami. But losing this business could hurt them in the inevitable economic downturn. Other airlines have been happy to take over what American has left off, and the better airlines say it’s American that “poses a more complex problem” and that’s why airlines would argue that they make it difficult to untangle the confusion caused by