American Airlines has named Oneworld airline alliance CEO Nathaniel Pieper as its new chief commercial officer, effective Nov. 3, American CEO Robert Isom announced during a Thursday morning earnings call. Pieper will report to Isom.
Pieper has been Oneworld CEO since April 2024. Prior, he held executive positions at Alaska Air Group, Delta Air Lines and Northwest Airlines, according to American. While at Alaska, he "spearheaded" the carrier's entrance into Oneworld and "constructed" its commercial partnership with American.
Former chief commercial officer Vasu Raja left the company in June 2024 after American decided to reverse course on the carrier's controversial sales and New Distribution Capability strategy, which alienated some corporate customers.
Vice chair and chief strategy officer Steve Johnson had stepped in to oversee the commercial organization and was able to "quickly stabilize and reenergize this part of our business," Isom said Thursday.
Johnson and his team have "strengthened our commercial position, and we're now in a great spot to make a transition," Isom added.
Johnson will return to his prior role when Pieper joins the company, according to the carrier.
Improved Corporate Segment
American continues to build out its sales team and is "aggressively using our loyalty program to win back customers," Isom said. "In the third quarter, we grew our corporate revenue by 14 percent year over year."
He reiterated the carrier's expectation to have fully recovered by year-end the revenue share that "was lost by our prior sales and distribution strategy," but added that "we're not all the way there. We have not only some share left to catch up as we exit the year, but we're not going to stop on that front." The carrier plans to shift its focus to "growing our share beyond those historical levels."
After also noting American's work to strengthen hubs in Chicago, New York and Philadelphia this past year, Isom said that each of those cities has a long history with a base of corporate and premium customers loyal to the American brand. "Our improved schedules, along with our new sales and distribution strategy and other product improvements are helping us win local high-value customers," he said. "This targeted expansion will continue through the fourth quarter and into 2026.
Isom noted that American's ability to grow capacity in premium markets would be further supported with the delivery of new aircraft, allowing the carrier to grow premium seats at nearly two times the rate of the main cabin, he said.
"We're positioning American for long-term success," Isom added. "Our commercial efforts in sales and distribution and revenue management are taking root driving business and premium revenue performance."
This led an analyst to ask about premium leisure yields eclipsing corporate yields in some markets, and if that would change how aggressively American would pursue corporate share.
"This is one where we've learned some lessons," Isom replied. "Quite frankly, corporate travel is incredibly rich in terms of yield, and while we love what's happening from the premium space, premium leisure, we need both. That's why we're doubling down in terms of our investment in our sales team."
Isom also noted that overall business travel volume remains lower than pre-pandemic levels. "It has not recovered in terms of passengers to the levels that it was in 2019. There's a lot more room for growth," he said. "I don't know if we ever [will] get back to the total percentage of business as a percent of total revenue, but there's a lot more that can be gained."
Johnson added that "business travelers are very frequent travelers, even if they're a little bit less than our premium yields now. They're still one and a half to two times the yields we get from other sources. … We calculate that business travel is only 80 percent of what it was in 2019, and that's an absolute number, not adjusted for the size for the growth in the economy. So [there] is very significant upside. As Robert said, we'd love to fill the airplane with business travelers and premium leisure travelers."
American Q3 Metrics
American reported third-quarter passenger revenue of nearly $12.5 billion, down 0.4 percent year over year. Total revenue increased 0.3 percent for the period to nearly $13.7 billion. The net loss for the quarter was $114 million, compared with a loss of $149 million a year prior.
Third-quarter capacity increased 2.3 percent year over year. The average fuel cost was $2.37 per gallon.
For the fourth quarter, American expected capacity to be up 3 percent to 5 percent year over year, according to American CEO Devon May, with revenue expected to also increase 3 percent to 5 percent for the period.
RELATED: American Q2 performance