International growth and “high value” passengers are central components of American Airlines’ (AA) plan to generate $1 billion in new annual revenue by 2017, chief commercial officer Virasb Vahidi told company employees Tuesday.
AA, which filed for Chapter 11 protection in November, is seeking to trim annual costs by $2 billion, including $1.25 billion in labor expenses. It also wants to boost yearly revenue by $1 billion.
Vahidi outlined how that could be achieved in a letter sent to AA employees Tuesday. He said a primary goal of AA's restructuring is to "create the premier airline for high-value customers, who choose airlines based on network, alliances, products and services. While the number of these customers is small, they provide a disproportionate amount of revenue and are critical to our success."
He said "the competitive costs we plan to achieve" via restructuring would enable more profitable growth with most of that expansion coming from international operations (domestic services will be more focused on feeding international flights).
"With improved profitability, we plan to build the scale of our network and alliances," Vahidi told AA workers. "We plan to grow our departures significantly at all of our hubs over the next five years, and to diversify and substantially grow our international flying as part of this strategy. We also intend to grow our joint business agreements across the Atlantic with British Airways and Iberia and across the Pacific with Japan Airlines and Qantas."
Article Source : ATW Daily News
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