American makes a premium bet with A321T

“It’s a huge, huge improvement,” says the four-million mile flier sitting next to me on American Airlines’ inaugural Airbus A321 Transcontinental flight from New York JFK to Los Angeles.

He would know. The gentleman sitting next to me, who declines to be named, describes the Fort Worth, Texas-based Oneworld alliance carrier’s New York-Los Angeles flights as his “subway” on the 7 January flight. He adds that he flies the route at least three times a month.

American A321T at JFK in December 2013. (Edward Russell)

American A321T at JFK in December 2013. (Edward Russell)

American’s premium A321Ts are a shift upmarket for the carrier. Not only do they have all the bells and whistles that today’s travellers demand – personal in-flight entertainment, power outlets and lie-flat seats in first and business class to name a few – but they represent a clear bet on premium traffic by the carrier.

The number of first class seats that American has in the New York-Los Angeles market will rise by 30% when it converts to 13 daily A321T flights from up to 10 daily Boeing 767-200ER flights in June. The number of business seats will fall by just over 13% and economy seats will decrease by nearly 27%.

American A321T business class. (Edward Russell)

American A321T business class. (Edward Russell)

“It shouldn’t hurt them but the question is will it offset the lost revenue from the economy reductions,” says Savanthi Syth, an analyst at Raymond James who covers airlines, on the premium focus.

If there is one US domestic market where airlines seem to succeed from investing in their premium product, it is New York to Los Angeles and San Francisco.

Syth says about 50% of the premium passengers on the two routes fly on paid tickets, compared to an average of 20% to 30% on other domestic flights.

More high-yield passengers need to react to American’s A321T like the four-million mile flier for American’s bet on premium to pay off.

The capacity cut, especially in economy, and likely fare increases could encourage independent business and leisure travellers elsewhere, says Henry Harteveldt, a travel industry analyst at Hudson Crossing, after flying on the inaugural A321T flight from Los Angeles to New York.

Those more budget conscious travellers have ample choices.

JetBlue Airways will debut its premium Mint cabin, which it says will be priced 50% below competitors, in June and Delta Air Lines’ dedicated premium Boeing 757-200s enter service in July. United Airlines completed a refresh of their premium service 757s this past December.

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