AA Lowers Some Transcon Fares, Reduces Extra Leg Room

American Airlines today capped coach class fares on certain transcontinental routes and announced a partial reversal of the popular extra leg room concept brought to coach class throughout the fleet. Both initiatives are part of a four-point plan, unveiled today by new CEO Gerard Arpey and meant to return the world's largest carrier to profitability as "a leaner, stronger and more agile competitor."

The carrier will return to "standard seating" on 23 percent of its fleet, primarily serving leisure markets accounting for 20 percent of daily departures. "I also want to be clear that we are not creating an airline-within-an-airline because we don't believe a successful formula for that concept yet exists," said new American CEO Gerard Arpey. "We are simply returning to standard seating in those markets where customers tell us price, and seat availability at low prices, is predominantly how they choose a carrier."

Though the added leg room in coach, which provides passengers an extra few inches, has been hailed broadly by American's customers, competing carriers repeatedly have said they experienced no marketshare loss as a result. Affected aircraft will undergo the reconfiguration beginning this fall. The carrier expects to complete the project by February 2004.

Meanwhile, all one-way coach class fares on routes between New York JFK and Long Beach, Orange County and San Jose, Calif., now are priced at $299 or less, excluding taxes and fees. First class fares on those routes were capped at $599.

Both announcements are clear responses to low-cost competition and, according to Arpey, position American for the future. "It is also an acknowledgement that we cannot build that future if we don't generate enough earnings and cash flow to restore our balance sheet," he said.