This article is a part of a 5 piece opinion on how American Airlines can regain investor confidence, passenger loyalty and general good public perception. For the index of the articles, see here.
Critical Capital Expenses
American has been purchasing aircraft like crazy. They have dozens of 787s on order, and the airline has even more A320neos and 737MAXs on order as well. These planes cost money. If American was truly serious about keeping costs down, they would focus on key capital expenses. These would focus on retiring the 767s and the remaining MD80s. They can still add 787s in order to replace some of the 777s, but this is more of a 2022+ plan. Project Oasis also costs money, and passengers universally hate it. They should discontinue the program, and save the investment costs of a poor customer experience, and possibly use that money for experience improvements.
Retiring Old Aircraft
American has a fleet of ageing and unreliable 767s. In order to improve fleet efficiency, the airline should retire them, and replace them with the 787s mentioned above (this would be a smart capital expense). These aircraft are gas guzzlers, and operational reliability is pathetic.
American needs to retire their PHX-Hawaii 757s, which are inefficient and do not offer the best experience for passengers. This is in stark contrast to my opinion regarding the international 757s. These airplanes, although old, fill a niche that American cannot replace, especially for thin TATL routes out of PHL and JFK, and some South American routes out of MIA. So, in the retiring aircraft conundrum, I am torn. Retire the 767 and some of the 757s, but be mindful of how you retire the 75s.
I will keep this brief. American needs to listen to its frontline employees. They are the ones who deal with customers on a daily basis. If they aren’t happy with the company, and do not enjoy their jobs, customer service will suffer. Before anyone says that this cannot be done in a US carrier, see Southwest Airlines employees and jetBlue employees. It is possible, but it takes time and effort, things American’s C Suite doesn’t seem to want to invest.