An American Airlines aircraft flying over the mountains. Those passengers willing to pay an $8,000 fare are getting quite a ride. American Airlines
For $8,000, American Airlines treats select Los Angeles passengers to private berths, three-course meals boasting shrimp scampi and even vented compartments that can house socialites’ chihuahuas.
The costliest U.S. domestic fare is a bet that some fliers will pay for the ultimate in pampering from New York to Los Angeles and San Francisco. The 10 first-class seats on each of the Airbus Group NV A321 jets dedicated to those trips are the only ones offered on any route within the U.S.
Picture a front cabin where the aisle is flanked by just one berth on either side, in the space usually given over to three-abreast rows. Nosy neighbors can’t shoulder surf. The water is cucumber-infused, the wines billed as award winners. Noise-canceling headphones muffle a six-hour trip. The biggest question after an investment of almost $2 billion of planes and millions more in upgrades is whether the experiment will work.
“There certainly is a risk in doing this,” said Henry Harteveldt, founder of travel advisory firm Atmosphere Research Group. “If this proves to be profitable only on the New York to L.A. run and neutral or losing money on San Francisco, who knows if the profits from L.A. will be enough to sustain it?”
The 17 Airbus jets, dubbed A321Ts for “transcontinental,” are alone in flying within the U.S. with three cabins, for first, business and coach. United Airlines went to a two-class setup on cross-country routes in 2013. Delta Air Lines Inc. already had just two cabins on its aircraft.
‘Tremendous Sum’
“Eight-thousand dollars is a tremendous sum of money,” said Jay Sorensen, president of aviation consultant IdeaWorksCompany in Shorewood, Wisconsin. “If they are publishing that, then they are getting it. At this point, they have a very rare and meaningful distinction."
Chief Executive Officer Doug Parker and his top lieutenants initially were skeptical of the A321T, the brainchild of former CEO Tom Horton and Virasb Vahidi, his chief marketing officer. Fort Worth, Texas-based American had the plan in the works when Parker moved over from running US Airways as the companies merged in December.
A321T flights began in January, and President Scott Kirby said the service generated an enthusiastic response at an investor conference near Los Angeles this week.
“I bet I had at least six to eight people seek me out at the conference to tell me how great the transcon product was,” Kirby told analysts yesterday at an Imperial Capital event in New York. “It’s a huge hit with our customers and doing well.”
Rarefied Market
A round-trip fare to Los Angeles tonight from New York’s Kennedy airport in first class was offered on American’s website yesterday for about $7,400. Some recent tickets topped $8,000. Either would be an expense-account stretch for a typical corporate flier. The A321T’s routes let American tap a niche that includes entertainers, investors and lawyers willing to pay for exclusivity.
Privacy and extra workspace in the first-class berths attracted Matthew Bennett, who used frequent-flier miles to book one way on an A321T.
“The difference between business and first-class is akin to the difference between economy and business,” said Bennett, who is based in Monterey, California, and publishes “First Class Flyer,” an advice newsletter on redeeming loyalty awards and elite upgrades. “It’s pretty darn significant.”
So is the cost difference. At yesterday’s prices, buying that New York-Los Angeles round trip for tonight in business class would have run about $5,200. (A reservation with a month’s notice would pare the bill to about $3,200).
Filet, Gnocchi
For those springing for first class, the seats are 27.4 inches (70 centimeters) wide, compared with 19 in business and 17.7 in coach. Three-course meals — don’t like shrimp? Try the beef filet or butternut squash gnocchi — are included. The heartiest coach entrée: a $9.99 chicken Cobb sandwich.
American offers 13 daily Kennedy departures to Los Angeles, and five to San Francisco. Most aren’t redeyes, so the first- class pillows, bedding and lie-flat seats are more a convenience for napping than a full night’s rest. To wake up, passengers can sip an espresso or cappuccino, and refresh with hand lotion, lip balm and toothpaste in the amenity kit.
First-class pets are cosseted as well.
The two berths at the front bulkhead each have a space with a vented door to hold a kennel or carrying case for takeoff and landing. It’s known as the “Paris Hilton compartment,” for the celebrity who often flies with her dogs, Atmosphere’s Harteveldt said. Los Angeles-based Miller PR, which represents Hilton, didn’t return messages.
Reclaiming Glory
Parker is positioning the premium service as part of a bid to return American to its role as an industry innovator in the 1970s and 1980s, when it introduced the AAdvantage loyalty program and the hub-and-spoke route system.
“It’s a really unique market in the country connecting the two largest corporate travel centers,” Chief Marketing Officer Andrew Nocella said in an interview. “It’s ultra-important to probably every airline. It’s particularly important to American, which has a real strong legacy presence there.”
American configured the whole plane to cater to high-fare fliers. With 102 seats, the A321T has barely half as many as A321s flown by other airlines. First and business class account for 29 percent of the total, more than twice the share as on the Delta and United jets flying the same trips. Another 36 seats boast extra legroom, for a fee. There are 36 in coach.
Keeping Track
Even as Delta and United parent United Continental Holdings Inc. say they aren’t considering adding a cross-country first class, the American competitors may be paying attention.
“Once somebody disrupts a market with a product of that quality, the others are going to want to analyze it and see if they want to follow suit,” said John Beauvais, president- corporate brands for Flight Centre USA and Latin America, a division of Brisbane, Australia-based Flight Centre Travel Group Ltd. “They certainly are not ignoring it.”
For American, a first-class cabin can act as a lure to regain corporate contracts lost during the carrier’s two-year bankruptcy and merger negotiations. With the A321T, business travelers can guarantee themselves same level of service across the U.S. and onto other American flights to Europe, Asia or Latin America.
Offering the only first-class seats on domestic routes sets American apart, said Hubert Horan, a Phoenix-based airline consultant who as a Northwest Airlines executive helped create that carrier’s Pacific route system in the 1990s.
“If you’re trying to send a message to the high end of the market,” Horan said, “this is the way to send a message.”
To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net Molly Schuetz
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