American Airlines CEO Robert Isom has outlined four key priorities, which he believes will improve American Airlines’ profitability to reporters at Dallas Fort Worth International Airport (DFW). The airline is set to focus on improving passenger experience through investment in premium cabins and expanded airport lounges, as well as using new methods to improve operational reliability, and purchasing new long-haul aircraft. Isom hopes to close the large profitability gap American has, relative to its U.S. rivals United Airline and Delta Air Lines.
What Are American’s Priorities?
Isom told U.S. broadcaster CNBC that he wanted American Airlines to become the “best at everything that we do.” As well as setting out a range of improvements that the airline will begin implementing across its services.
American aims to add new premium suites to its Boeing 777 and Boeing 787 jets, which could cost as much as $10,000 per seat on some long-haul flights.
The airline is also set to open a new Admirals Club lounge at DFW, one of its key hubs. This will provide pre-flight food and drinks, as well as Wi-Fi, to American’s highest paying customers.
Isom also acknowledged American’s relatively poor punctuality record compared to its largest rivals, and said that the airline would integrate AI technology to predict maintenance issues, which would otherwise damage operational reliability.
The CEO later suggested that American could potentially order a new fleet of widebody aircraft later this year.
Despite setting out an extensive investment programme for American’s luxury flight packages, Isom did not comment on whether American was taking any measures to reduce the price of its economy class tickets, which are used by the majority of flyers
How Profitable is American Airlines?
Despite being the U.S.’s largest airline in terms of annual flights, American Airlines’ profits have been much lower than those of its direct rivals.
United Airlines made $3 billion more in profits than American last year, while Delta Air Lines made $5 billion more.
Wall Street analysts suggest that American’s fortunes are set to improve however, with the company’s shares predicted to increase by 80% more this year when compared to last year. Some investors believe this growth could accelerate next year, predicting adjusted earnings per share could quadruple in 2027.
American, along with all international airlines, has experienced recent financial uncertainty however. The U.S.-Iran conflict, which disrupted many of the airline’s flights to the Middle East, contributed to the company’s share price dropping 33.6% in the first quarter of this year.
Will American’s new priorities improve profitability? Is the airline focussing too much on its highest paying customers? Let us know what you think in the comments.
