American Airlines says 30% of seats drive half of revenue as premium cabin rush heats up
American says a minority of its seats now accounts for half of its revenue.
American Airlines Group Inc generates the majority of its revenue from a limited number of seats, according to CEO Robert Isom. At a recent Morgan Stanley industry conference, Isom announced plans to expand premium seating options across the carrier's fleet through aircraft reconfigurations and new deliveries. The CEO stated that the proportion of these higher-yielding seats will increase as the changes are implemented.
American Airlines recently unveiled a 70-suite business class cabin on its largest aircraft, the Boeing 777-300ER, with more planes awaiting similar modifications. The carrier had been behind its larger competitors in terms of profitability, but Isom believes that adding premium seating will attract higher-spending customers, particularly as airlines deal with this year's surge in fuel costs, which is their second-largest expense after labor.
Other airlines, such as Allegiant Air and JetBlue Airways, are also adding upgraded seat options. Earlier this year, Isom revealed that American Airlines plans to revamp its Boeing 787-8 Dreamliners and update interiors on its 777-200s, and the company is set to order new wide-body aircraft this year.
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