American Airlines Sprucing up First-Class Cabins

Few routes are as important to American Airlines as the one that shuttles high-paying business travelers between New York and Los Angeles.

Those are the kind of passengers who value service over price, and American does not want them to think that the United States' largest airline has slipped behind the competition on that score.

American is fighting back with upgraded first-class cabins that include flat-screen televisions and personal entertainment devices offering movies, TV, music and video games.

As a bonus, replacing bulky analog tape systems and cathode-ray-tube monitors will free up enough room to add a first-class seat in some planes.

American will announce Wednesday it is spending nearly $20 million (euro15.1 million) to spruce up its fleet of Boeing 767-200 aircraft, which fly the longest U.S. routes. That's about $1.3 million (euro980,000) per plane.

"Premium travelers are still the backbone of our revenue," said David Cush, senior vice president of global sales at American parent AMR Corp. "American has always been an airline built around serving the business traveler."

American is already in the process of installing lie-flat seats in first class on Boeing 777s and 767-300s used on New York-London and other international flights - a nod to the creature comforts on rival British Airways.

"They have to remain competitive with British Airways, Virgin Atlantic, premium small startup carriers, and some of the Middle East airlines that can fly to London," said Ray Neidl, an analyst for Calyon Securities who flies often between New York and London.

"Their service is perceived as inferior to the really premium service that BA has," Neidl said, although he gave American credit for a strong frequent-flier program that has won the loyalty of many U.S. corporate travelers.

American focused first on improving service on international routes because they tend to be the most lucrative, "and our international customers demand the most comfort because of the length of the flight," Cush said.

Cross-country U.S. flights rank next in importance. Especially those that tend to carry many corporate travelers, such as New York-L.A. - American's top domestic route - and New York-San Francisco, which ranks in the airline's top five, according to Cush.

American has been losing money since early 2001 and hovered near bankruptcy in 2003. It lacked money to buy new planes - executives have cautioned that parent AMR must pay down debt before it can think of updating its fleet - or spend much money to improve its current aircraft.

But analysts expect AMR to earn about $400 million (euro302 million) for all of 2006. Cush said the airline finally has the financial stability to invest in upgrading cabins. He vows the Fort Worth-based carrier will have the best first-class service among U.S. carriers and the only one to offer wide-body planes on all transcontinental flights.

American is also moving into a new $1.1 billion (euro830 million) terminal at New York's JFK Airport - and reviving helicopter shuttle service from Wall Street for $159 (euro120) each way. The airline recently opened a new terminal at Dallas-Fort Worth International Airport, and it is adding new Admirals Clubs and giving first-class passengers a one-day voucher to use the lounges.

With security measures making it more exasperating to move through airports, airlines are trying to improve facilities on the ground.

"Since 9-11, customers are spending more time there," Cush said. "If we make it easy and pleasant to get on the airplane, they'll have a much better flying experience."


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