Dive Brief:
- American Airlines’ investments in better experiences for premium and corporate customers are paying off, executives said on a Q4 2024 earnings call Thursday.
- Loyalty revenues were up 14% year over year, and AAdvantage members accounted for 75% of premium cabin revenue, according to CEO Robert Isom. The carrier enrolled a record number of customers into the program in fiscal 2024.
- The early response to new boarding technology launched in the fourth quarter has been “overwhelmingly positive,” according to Isom. The solution, which eliminates the need for employees to use multiple apps during the boarding process, was rolled out to 100 airports and gives employees more insight into the number of passengers in each flier group, among other benefits.
Dive Insight:
The carrier’s results reflected its emphasis on premium experiences, and the company plans to build on its momentum.
“You’ll hear more from us as the year progresses in terms of how we can take even better care of our customers, especially those that are the highest tier,” Isom said during the call.
Premium revenue was up 8% year over year in the fourth quarter, according to Isom. The airline’s total revenue for the quarter was up 4.6% to $13.7 billion.
Plans include ensuring international customers in premium cabins have access to screens and Wi-Fi, according to Isom. The newest aircrafts in American’s fleet are fully equipped with the latest technology, and older models are being reconfigured to add more premium seating.
While the smallest regional jets used for domestic flights won’t offer Wi-Fi access, all larger regional aircraft will have access to Wi-Fi by the end of the year, Isom said.
The company is building on its efforts to win back business customers as well. American’s corporate and agency flown revenue reached a low point in Q2 2024, but leaders have been working to improve business customer performance.
“I spent a considerable amount of my time making sure that I was up to speed and talking to our corporate customers and agencies as well,” Isom said. “That work is paying off.”
The airlines’ efforts include reestablishing “corporate experience,” that is, experience advantages for corporate customers’ employees, according to Vice Chair and Chief Strategy Officer Steve Johnson.
The company’s corporate revenue recovery may still take some time.
“Don't forget these contracts are set up over a period of time,” Isom said. “Revenue doesn't show up right away. But we're not resting on that. We're learning from, certainly, the issues associated with our past strategy, and that, I believe, bodes well for the future.”
