Dive Brief:
- American Airlines is deepening its investments in premium products and experiences to meet growing customer demand, executives said on a Q3 2025 earnings call last week.
- The airline is reconfiguring its aircraft and expects to increase the number of premium seats to nearly two times the rate of main cabin seats. It plans to increase the number of lie-flat seats by over 50% by the end of the decade.
- Stephen Johnson, chief strategy officer at American, described premium as a win-win on the earnings call. “We're very excited about the growth in premium demand, again, because it allows us to serve our customers better and allows us to earn higher yields. And we are going to invest and provide product and grow the number of, the capacity of our premium cabins as our customers demand us to do.”
Dive Insight:
Amid tariff-induced economic uncertainty this spring, many consumers watched their pocketbooks and pulled back on travel. But not all.
While American’s main cabin revenue faltered in recent quarters, premium revenue grew, and American, like other major airlines, is doubling down on courting luxury flyers.
So-called Liberation Day, during which the Trump administration announced a series of tariffs, was “very difficult on main cabin revenue, the demand from our most price-sensitive customers,” Johnson said. Premium revenues, however, “have been strong all year long.”
American reported third-quarter revenue of $13.7 billion, up 0.3% year over year, according to an earnings release.
Premium revenue per available seat mile outperformed the main cabin by 5 percentage points year over year, Johnson said. “Nearly 50% of our ticket revenue comes from premium.”
The airline is also investing heavily in its loyalty program to win back customers, with active AAdvantage accounts increasing 7% year over year. In Chicago, a top American hub, enrollments grew 20% year over year.
“AAdvantage members are more engaged, generate a higher yield versus nonmembers and are a key driver for premium cabin demand,” Robert Isom, CEO and president of American, said on the call.
Isom also announced the appointment of Nat Pieper as chief commercial officer, effective Nov. 3. As part of his new role, Pieper, who most recently served as CEO of oneworld, will lead co-branded credit card programs and loyalty programs. He will also co-lead the airline’s customer experience team with Chief Operating Officer David Seymour.
Customer experience investments, like the ones Pieper will lead, “are the value multiplier on top of everything we're doing,” Isom said.
The airline is currently rolling out a new flagship suite designed to “elevate privacy, comfort and luxury,” Isom said. Premium enhancements include new amenity kits and partnerships with Champagne Bollinger and Lavazza.
The airline is also installing high-speed satellite Wi-Fi, sponsored by AT&T, which it will offer to AAdvantage members for free starting in January.
