American Airlines and Technology

This afternoon at CntrStg Shane and I got an inside peek American Airlines and how they are using technology to move forward in their highly competitive business. We talked about a number of different hurdles they are looking to surpass and I believe that one of the major ones is power for accessories on flights.

The majority of the aircraft that American Airlines operate are currently equipped with power for the passengers to take advantage of. However it is only available on specific rows of seats due to the amount of time it takes to retrofit the aircraft with the power capabilities.

American Airlines have also worked with the TSA on electronic boarding passes. These boarding passes will show a barcode on the screen that will be scan able by TSA as well as the airport agents. Originally they were using handheld scanners but had problems scanning the device. They have now moved to a flat "table like" scanner.
Another topic that came up during our discussion was tracking baggage. One of the CntrStg members brought up the fact that her baggage has been lost for six long days on her ten day trip to Vegas (her airline was not American just for the record). American Airlines have a bagging system where the bags get scanned in certain points and tracked. They have researched the option of putting RFID tags as "bag tags" but it would raise the cost of the tag up to 4 - 5x the current cost of the paper tag.

I was surprised to find out the avid Advantage member check their miles online 4 – 6 times monthly where the average online banking user only checks their accounts online 2 – 4 times a month. There are 16 million people in the Advantage program and only 51% of miles gained are through actual air travel. Not only that but they actually sell 40% direct, either through their website or their reservations line. I would think with websites like Priceline this number would have been a lot lower.

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I fly a lot between the US and Canada and American Airways is the worst I ever fly. Air Canada is by far the best. Their planes are quite new, all have TV's with on demand and free movies Plus TV on the back of each seat, it has USB power that works for some devices I suppose, and they do electronic boarding with a barcode on a blackberry or whatever. None of these things mentioned are revolutionary.

Uh, what are they working on with the TSA for? Oh, the electronic boarding pass on my cell phone that I used with my NWA flight a couple months ago? I don't see how any of this is anything other than "IF WE YELL LOUD ENOUGH PEOPLE WILL THINK WE'RE SAYING SOMETHING IMPORTANT!"

I always found American Airlines somewhat "off kilter" somehow:

1) Aren't they the last major user of old McDonnell-Douglas jet designs among carriers in the US? I'm assuming, given that McDonnell-Douglas has been gone for what? 10 years? now that it implies an aging and nasty group of aircraft.

2) When you search for fares, I can't say I usually see them among the lowest.

3) All the press I've seen where they sue google, etc. over advertisements related to their name.

What exactly keeps them in business? Is it that they serve parts of the country I'm not in aggressively? Do they eat up a lot of "subsidy provided" markets?

And as for competition: If you want to win my business-- develop an airline which operates outside the traditional security hassle. Find a way. Say you're a cargo carrier, who specializes in live animals. Claim you're an airborne railroad. Offer service in Cessnas out of private airports. I'd take a 1:10,000,000 risk increase in being blown up for the time and dignity savings of not having to be scanned, queue miles deep, get there two hours early, and schlep my bags with me.

10x the current cost of paper tags? What exactly does a paper tag cost to print. Somehow I doubt that this cost is that big of an issue compared to baggage getting lost and loosing an customer.

Ricky Smith said,
10x the current cost of paper tags? What exactly does a paper tag cost to print. Somehow I doubt that this cost is that big of an issue compared to baggage getting lost and loosing an customer.

I mis typed that. I double checked my notes and the author actually said 4 - 5x.