American Airlines (AAL.O) said on Tuesday it would add more premium seats and restore seatback entertainment screens on its narrowbody jets, stepping up its bet on higher-spending travelers as it tries to narrow a wide profit gap with Delta Air Lines (DAL.N) and United Airlines (UAL.O).
CEO Robert Isom has ramped up premium upgrades to lift American's earnings as U.S. airlines compete more aggressively for premium revenue.
American said premium seating would rise to about 40% of seats on narrowbody departures in coming years from roughly 25% today. It will add more first class seats and main cabin seats with extra legroom as aircraft are reconfigured and new jets join the fleet.
At American, premium travelers generated nearly half of ticketed revenue in the second quarter while accounting for roughly 30% of seats.
The airline, however, continues to trail Delta and United in profitability, adding to pressure on Isom to show the strategy can close the gap. Flight attendants earlier this year called for a leadership change, while the pilots union has questioned whether the current management team can deliver the improvement.
American expects roughly break-even results this year, while Delta and United have forecast solid profits. Isom last week shook up senior management and acknowledged a "meaningful gap" between American's performance and where it should be.
SEATBACK SCREENS RETURN
The return of seatback screens also marks a reversal of American's previous inflight entertainment strategy. The airline began moving away from the screens nearly a decade ago, betting that passengers would instead watch movies and television on their own devices.
American said customer preferences have since changed, particularly among younger travelers who increasingly want access to larger screens alongside their own devices. Advances in high-speed satellite Wi-Fi have also made it possible to offer a more connected and personalized onboard experience, the airline said.
The carrier expects more than 800 narrowbody aircraft to ultimately have seatback screens. Retrofits will begin in 2028 and are expected to be completed in the early 2030s, while new Airbus (AIR.PA) and Boeing (BA.N) aircraft with the screens will also begin arriving in 2028.
American already has more than 140 widebody and Airbus A321XLR aircraft with seatback screens. It declined to disclose how much it expected to spend on the program.
