American wants to get the low-fare word out

[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

 



American wants to get the low-fare word out
By Dan Reed, USA TODAY

Low fares rule, and now even the nation's largest airline is conceding the
point. American, which has long sought to be known as the preferred carrier
of discriminating corporate travelers, will begin repositioning itself as
the top provider of travel value in an ad campaign beginning today. The ads
are built around the tag line "Get a great low fare. And a lot more
airline." They attempt to sell the notion that for the same price charged
by low-cost carriers, American's passengers get more legroom, the world's
biggest service network and points in its highly regarded AAdvantage
frequent-flier program. American also touts its full-service features, such
as reserved seating and meals, at least on the flights where meals are
still served. For the past year American executives have claimed,
tongue-in-cheek, that American is "the world's largest low-fare carrier."
That's because competition and economic conditions have forced it to offer
millions of seats at very low prices. But American's parent, AMR, lost $5.3
billion in two years, and management is seeking to chop $4 billion a year
from its operating costs. Without the savings, management warns that the
carrier almost certainly will have to file for bankruptcy protection this
year. Standard & Poor's cut AMR's debt rating three notches Friday to CCC,
deep in junk territory.

American, like most other big carriers, has seen revenue fall 20% in two
years as consumers have curtailed flying and demonstrated a strong
preference for low fares when they do travel. In 1998, 22.7% of all
passengers were high-fare-paying business travelers who produced 36.6% of
the industry's revenue, according to a recent study by LECG of Cambridge,
Mass. In 2002 such travelers represented only 13.4% of the market and
generated just 20% of the industry's revenue. "The reality is that people
think we're expensive," says Rob Britton, American's advertising director.
"So we've got to get the word out that we've got lots and lots of low
fares, that we have a great product and offer great value." Still, it's far
from certain that the new appeal to the price-sensitive masses will work,
either in attracting a bigger share of that end of the market, or in
producing profit. Consumers must jump through too many hoops to use the
lowest discount fares on full-service carriers like American, says Rolfe
Shellenberger, a marketing executive for American in the 1980s and now a
corporate travel consultant. The new campaign, developed by Temerlin
McClain of Irving, Texas, uses customer testimonials. That's a first for
American, and a rarity among airlines. The ads start Monday in St. Louis
and Chicago and later this month in New York and Los Angeles.



***************************************************
The owner of Roger's Trinbago Site/TnTisland.com
Roj (Roger James)

escape email mailto:ejames@escape.ca
Trinbago site: www.tntisland.com
Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/
Steel Expressions www.mts.net/~ejames/se/
Site of the Week: http://www.dbombo.net/muddyangels/
TnT Webdirectory: http://search.co.tt
*********************************************************

[Index of Archives]         [NTSB]     [NASA KSC]     [Yosemite]     [Steve's Art]     [Deep Creek Hot Springs]     [NTSB]     [STB]     [Share Photos]     [Yosemite Campsites]