American Airlines, which began its merge with U.S. Airways a year ago, has announced plans to upgrade its planes and airport hubs. The airline company stated that it will spend nearly $2 billion on upgrades. The investments will go to improving in-flight entertainment in addition to renovating lounges and check-in zones. Nevertheless, American Airlines is late to the party in terms of providing a comfortable flight and wide-array of entertainment options on its flights, especially for international routes.
The decision to improve its flight experience stems from growing customer dissatisfaction, which has skyrocketed since the merger. During the merger, the firm decided to keep the standard of the least-cost carrier. And although low costs are important for firms, only so many corners can be cut without sacrificing consumer benefits. As a result, many consumers are flocking to Delta as the firm has revamped its image to that of a premium airline service. Product differentiation is important in the airline industry, particularly for first-class fliers who want the most comfortable flight experience. American Airlines has come under fire for awful first-class service – mostly due to scaled-back food options.
American has rolled out new advertisements in an effort to draw back more customers. The advertisements are both informational and persuasive: many of the ads detail the new improvements that are being undertaken by American, while others use catch-phrases such as “We’re going for great.” Nonetheless, it will take time for all of the upgrades to be implemented, so the success of the ad campaign may be limited.