American to pack in more seats in $1.4bn sales push

epa03583161 (FILE) A file photo dated 29 January 2013 showing a new American Airlines 737-800 aircraft with a new painting and the company's new logo at a gate at the O'Hare International Airport in Chicago, Illinois, USA. Early media reports 14 February 2013 state the logo and paintworks may be used following the merger of American Airlines with US Airways. The boards of American Airlines' parent corporation and US Airways Group have voted separately to approve a merger that will create the world's largest airline, according to The Wall Street Journal late 13 February 2013.  The deal is to be officially announced 14 February 2013 in the US, and documents with the details are to be filed with the US Bankruptcy Court in New York the same day, the Journal reported, quoting people familiar with the merger.  EPA/KAMIL KRZACZYNSKI

Bloomberg

American Airlines Group Inc. will add more seats to some of its single-aisle jetliners as part of an effort to boost sales by $1.4 billion in the next four years. It’s also targeting $1 billion in cost savings.
The carrier’s Boeing Co. 737-800 jets will be revamped to fit 12 more passengers while the Airbus SE A321 planes will carry as many as nine more, according to a presentation. The world’s largest airline also plans to bolster group sales, update technology systems and seek to persuade more customers to upgrade to higher fares.
The plans almost double the amount of revenue gains by 2021 from previously announced efforts to expand sales amid rising fuel costs and heightened competition from heavy discounters. While a new fare war broke out in the summer among US airlines, American Chief Executive Officer Doug Parker reaffirmed his view that industry consolidation will enable carriers to post steady profits and leave behind years of boom-and-bust cycles.
“I don’t think we’re ever going to lose money again,” he said at American’s investor day in Grapevine, Texas. “This is an airline and an industry that will be profitable in good and bad years.”
American climbed 1.4 percent to $47.49 at the close in New York, leading a Standard & Poor’s index of the five biggest US carriers. American has advanced 1.7 percent this year, while the broader gauge declined 1.1 percent. Including the new initiatives and previous programs to boost revenue by $1.5 billion, the airline said it expects total improvements of $2.9 billion. That’s on top of the cost reductions.

Cabin Revamp
In the fourth quarter, American will begin revamping some narrow-body planes with new seats, satellite Wi-Fi service, larger overhead bins and power for passenger devices at seats.
The 737-800 jets will go to 172 seats from 160 seats, matching the total for American’s upgraded 737 Max aircraft. The A321 planes will be outfitted to carry 190 passengers.
That’s an increase of three for the jets originally from US Airways, which merged with American in 2013, and a gain of nine for the aircraft operated by American before the transaction.
The move isn’t likely to be welcomed by travellers, many of whom complain about getting less space on US aircraft. American didn’t provide details of the seat additions, although Parker did pledge not to go below 30 inches of pitch, which is the distance from a point on one seat to the same point on the seat in front of it. The company ditched a previous plan to drop to 29 inches in a few rows on some planes after employees and travelers protested.
The carrier estimated that standardising the interiors at a higher seat count will generate about $500 million in revenue through 2021.
American won’t lay off employees if the 417 efficiency projects it has on tap reveal some parts of the company are overstaffed, Parker said. Options could include attrition, reassigning workers to other jobs or establishing an early retirement plan, he said.
“That’s really important to us,” Parker said in an interview. “We need efficiency, but not if efficiency disrupts progress with our team.” American this month reiterated its willingness to “absolutely, positively” match discount fares to compete with Southwest Airlines Co and Spirit Airlines Inc this summer.

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