American Airlines CEO just figured out his company makes less money than Delta. Three billion dollars less. His plan to fix this involves premium seats, lounges, and thinking about buying planes. Revolutionary stuff.
The carrier is improving reliability. That means the planes will now arrive late instead of not arriving at all. Progress looks different at every company.
They're investing in more premium seats because nothing closes a profit gap faster than reconfiguring the same aluminum tube you already own. Some consultant got paid six figures to suggest this. That consultant drives a nicer car than you.
American is also considering Boeing and Airbus for a new wide-body order. Considering. They haven't decided between the company that makes planes that sometimes fall apart and the company that makes planes that sometimes don't fall apart. Tough call. Really requires some deep analysis.
The lounges are my favorite part. American looked at Delta's crown jewel lounge strategy and thought yeah, we should try that. Only took them a decade to notice people like sitting in rooms with free pretzels before their flight. Visionary leadership.
Retail traders will see this headline and think it's bullish because the CEO has a plan. The plan is we need to make more money. Every CEO has this plan. It's the default setting on CEOs. You could replace him with a Magic 8 Ball that only says "premium seats" and "reliability" and save forty million a year in compensation.
Three billion dollars is the gap. The gap between what American makes and what a well-run airline makes. But sure, some new seat cushions and a lounge in Charlotte will fix it. Nothing says we've closed a massive profit gap like a guy in a suit saying he's considering purchasing aircraft.
The stock will probably go up anyway because the market rewards executives for describing their job responsibilities out loud.
Photo by Ross Sokolovski on Unsplash
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