American Airlines’ stock slumped as much as 16% Wednesday as CE Robert Isom promised to revamp a novel sales strategy that so far is generating less revenue than expected from critical corporate travellers and travel agencies. The carrier has been engaged in a year-plus effort to move bookings away from traditional sales channels, which are run by intermediary companies, in favour of bookings through American’s own system. But the approach has made it harder to book with American. Isom partly blamed it — as well as weaker pricing owing to an industry-wide abundance of flying capacity — for the softness in last-minute domestic sales since April. Corporate travellers frequently book close to when they will fly. CCO Vasu Raja, a champion of the plan to sell tickets through a channel controlled by American, will leave the company next month in what Isom called “a reset”. “We moved faster than we should, and we didn’t execute well,” he said at an investor conference. “We regret that and the difficulty that it created for our agency and corporate communities. So we are going to modify our distribution strategy. “We’ve used a lot of sticks,” Isom added. “We’ve got to put some more carrots in place and make sure our product is available wherever customers want to buy it.” Q2 operating earnings would be “off by a couple of hundred million dollars”, Isom said. American lowered its second-quarter guidance on Tuesday, saying it would earn between $1 and $1.15 per share, instead of $1.15 to $1.45. Total revenue generated by flying one seat one mile, a standard industry metric, could fall as much as 6% compared with the second quarter of 2023 — double the company’s earlier forecast. The Fort Worth, Texas-based carrier began trying to overhaul how it sells tickets in 2023. Longtime executives overseeing its sales team for corporate customers began departing, while lay-offs thinned the lower ranks. It began pushing for travel agencies — not just large volume sellers like Expedia or Priceline but also ones managing corporate bookings — to use its “New Distribution Capability” system rather than traditional global distribution systems like industry mainstay Sabre to book tickets, by removing nearly half its published fares from older systems.<br/>
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Three Black men have accused American Airlines of “blatant race discrimination” over its temporary removal of them and five other men from a Jan. 5 flight from Phoenix to New York, in a federal lawsuit filed on Wednesday. The men said they were seated on a plane at Phoenix Sky Harbor International Airport when an airline employee went row by row asking them to get off the plane. As they exited, the passengers noticed that all the Black men on the flight, eight in total, appeared to have been removed. The men did not know one another, according to the lawsuit, which was filed on their behalf by the legal arm of Public Citizen, a liberal nonprofit group, and the law firm Outten & Golden. Once the men left the plane, they asked for an explanation from an airline employee, who said they had been removed because of a complaint about body odor, though nobody had accused the men of an offensive smell, according to the suit. An American representative told the men at the time that the complaint had come from a white flight attendant. The men said they had been singled out because of their race. When one described the removal from the plane as discriminatory, an American employee said, “I agree, I agree,” according to a cellphone recording that was shared with The New York Times. “We take all claims of discrimination very seriously and want our customers to have a positive experience when they choose to fly with us,” American said in a statement. “Our teams are currently investigating the matter, as the claims do not reflect our core values or our purpose of caring for people.” The men are asking for compensation for the “fear, humiliation, embarrassment, mental pain, suffering and inconvenience” they endured and punitive damages, according to the lawsuit, which was filed in federal court in Brooklyn.<br/>
Qatar Airways expects to have its first three Boeing 777-300s equipped with Starlink’s in-flight connectivity service by the fourth quarter, as it embarks on upgrading its fleet with the technology over the next two years. The Oneworld carrier last October outlined plans to outfit its fleet with the Starlink solution to enable it to offer complimentary wi-fi access across all classes. It has today during AIX detailed its initial roll-out plans. ”This strategic move solidifies the airline’s commitment to elevating the passenger experience onboard, with plans to progressively extend SpaceX-powered technology across its entire modern fleet within the next two years,” it says. Qatar Airways group CE Badr Mohammed Al-Meer says: “This exciting collaboration with Starlink is a testament to our customer-first mindset and commitment to elevating our passengers’ experience to unprecedented heights, as we continue furthering our innovative offerings to meet and exceed passengers’ expectations throughout their journey with Qatar Airways.”<br/>