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TheStreet Open House

American Airlines Aims to Be On Time

"The skies are less crowded today, so business travelers have a little higher expectations, so it's even more important for a carrier like American to get this right," said Kevin Mitchell, chairman of the Business Travel Coalition, an advocacy group. "Schedule reliability is among the most important things to a business traveler."

Mitchell said business travelers clearly noticed American's poor performance earlier in the year, but "complaints were muted" because American wasn't the only carrier with problems. Rather, the entire industry was plagued by congested New York airspace, several fleet-type groundings by the Federal Aviation Administration and concerns about record high fuel costs. "The frustration was there, but everybody was having problems," Mitchell said.

American concedes it was late to make adjustments. In 2005 and 2006, it focused on improving revenue. For instance, to conserve fuel, its airplanes flew more slowly. Likewise, it encouraged rising load factors but didn't necessarily allocate more time to board aircraft.

Initially, lower industry capacity and good weather in American's hubs blunted adverse operational impacts. But in 2007, flying and air traffic-control delays increased, weather worsened and American finished 17th in on-time performance. The trend continued into 2008.

"We were a bit slow to adjust our system to the things in the world that were changing around us," says Mark Mitchell, managing director for customer experience. "We hadn't kept up with the changes in load factor and air traffic control and the rough year for mother nature."

In 2007, American had begun an effort to improve the customer experience, upgrading service areas such as boarding, cabin cleanliness and cabin maintenance. It asked employees around its system to devise improvements. Then in 2008, it began an effort to improve operations. Many changes took effect in September, as the fall domestic schedule was cut about 12%.

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