The fourth quarter of this year promises to be an exciting time for the wildly profitable American Airlines. Headquartered in Fort Worth, American Airlines will implement plans this quarter that are slated to boost sales and reduce operation costs.
According to American Airlines CEO Doug Parker, these measures will secure the airline company's position in good and bad economic times.
In a recent meeting with stakeholders and board members, Parker told the audience that sales could be bolstered by as much as $1.4 billion dollars. Costs would be cut by as much as $1 billion dollars in the next four years.
While revenues in many industries can fluctuate depending on the state of the nation's economy, the airline industry has been able to weather tough economic storms.
How does American Airlines plan to boost profitably while keeping operating costs low? The company's CEO has decided to boost its bottom line by making significant revisions in the cabins.
One of the primary concerns for many customers who travel by airplane is the available cabin space. As airline companies seek to increase their profits, they are revamping their airplanes to seat more customers.
Increasing the capacity of their current jets is one of the newest changes that will be rolled out this quarter. If you book a flight with American Airlines, here are the seating changes you can expect for each jet.
This increase is expected to generate almost half of the revenue increase during this four-year period. Parker's team has estimated that these small changes will add as much as $500 million dollars in additional revenue.
Additional seats in American Airlines jets are not the only changes that will be implemented by Parker. Other changes include the addition of seat power devices, spacious overhead bins, and satellite WI-FI service.
When the plans for these changes were initially revealed, many stakeholders and employees were concerned about the potential drawbacks of this ambitious undertaking. What if the 4-year projections are wrong and American Airlines fails to meet its company targets?
Parker is optimistic that the plans will not affect the airlines adversely. If the company falls short of its goal, employees are not going to be affected by layoffs.
The airline company has put a viable plan in place to prevent it from having to cut staff during this time. Other options to curb spending on staff expenses include early retirement packages, attrition, and worker reassignment.
One thing that will not happen is the addition of new aircrafts. Parker and his team are pleased with their current fleet of jets. They do not see a need to purchase additional aircrafts.
The first draft of the plan called for American Airlines to reduce each seat's pitch to 29 inches. In the airline industry, the pitch is the term that is used to describe the space between a point on the seat and the similar point on the seat that is located in front of it.
To understand how the pitch affects a passenger's travel experience, smaller pitch means less legroom for passengers. This makes for an uncomfortable travel experience.
The pitch on airplanes ranges from 29 to 32 inches. When passengers and American Airlines flight crew members were informed about the plans to reduce the pitch to 29 inches, the backlash was fast and furious.
After receiving thousands of letters and complaints, Parker pledged that the pitch on American Airlines jets would not be reduced smaller than 30 inches.
Founded over 91 years ago, the American Airlines Group is considered to be a legacy airline. Each year, over 51 million passengers select American Airlines as their carrier.
With over 6,700 flights per day, American Airlines is responsible for transporting approximately 140,000 passengers daily. This airline is a publicly traded company that boasts a market capitalization of $25 billion dollars.
Doug Parker is currently the CEO and Chairman of the American Airlines Group. He began his career with the company over 30 years ago as a financial analyst.
Under the leadership of CEO Doug Parker, the future of American Airlines looks promising. These changes will ensure that the legacy of American Airlines remains untarnished.