American Airlines' Vasu Raja talks:
- Plans to deepen domestic and international partnerships
- The future role of mobile health passports
- Getting ready for the return of the Max
2020 has been a busy year for American Airlines in terms of partnerships. The carrier announced a new "West Coast International Alliance" with Alaska Airlines as well as a rebooted codesharing agreement with Qatar Airways even before the Covid-19 pandemic shut down air travel. Later in the year, the carrier also announced an East Coast alliance with JetBlue to complement its Alaska partnership. American Airlines chief revenue officer Vasu Raja recently spoke with BTN transportation editor Michael B. Baker about the status of those partnerships and their significance for American's corporate travel partners, as well other developments including American's elimination of change fees and the status of international Covid-19 testing programs.
BTN: What's the status of your partnerships with Alaska Airlines and JetBlue?
Vasu Raja: We are really excited for these partnerships. Our goal is to create a really seamless experience for customers who are originating in the East or West Coast, going to the East or West Coast or traveling through it to go international, and we want to do it in such a way where we preserve and enhance the brand differences between the airlines.
In the West Coast, where we've started an international hub in Seattle connecting to Alaska's domestic hub, we'll be able to offer more people more connectivity through Seattle and people in Seattle more access to the world. We'll do the same thing with JetBlue in New York and Boston, where we anticipate adding the first new American Airlines international flights out of New York in five or six years when we start Tel Aviv and Athens next year.
The other thing we're looking to do to fulfill a promise is make it so the loyal customers of one airline are recognized on the other airline, and that when flying on our partnerships, benefits are enhanced. We recently announced with Alaska the largest reciprocal upgrade proposition of its kind anywhere in the world. If you are an AAdvantage Elite Member, you can be upgraded on an entirely Alaska-operated flight and still have the same kind of status as if you were on an American-operated flight. The same thing is true for [Alaska's] Mileage Plan members. We'll roll out something similar with JetBlue.
We'll make it so throughout your customer journey, whether it's at the airport or in flight, you will have an experience that works for you and we [will] recognize your level of loyalty of the brand you are with, even if you are flying on the other airlines. Imagine if you are a road warrior and you're flying to London and L.A. on American Airlines in New York. Now you can burn miles flying on JetBlue to Aruba or on their Mint product flying to San Francisco. This can help customers come back to travel and see some pretty cool places that would be difficult for any airline in the post-pandemic world to do alone.
BTN: Are you still planning to add some of your previously announced services out of Seattle, such as Bangalore?
Raja: The first of all these will be London Heathrow, which starts in March. Shanghai is due to start in the May-June period, and then Bangalore in the fourth quarter of 2021, like the middle of October.
BTN: And what is the status of your new international partnership with Qatar Airways and Gol?
Raja: We continue to build on both of those partnerships. We have extensive codesharing both with Gol and Qatar. We have reciprocal frequent-flyer benefits so you can earn and burn miles on one or the other, and we anticipate doing a whole lot more. Yesterday, we were meeting with the Qatar guys about doing more things, making it easier to sell Qatar flights to Africa and things like that through our website. The same with Gol, where if you are an AAdvantage elite, you can get upgraded on both of those carriers' service when you connect onto them.
If you take someone like Qatar, they fly so many markets in Africa, the Middle East and India that are really hard to get to—nobody in the world can get there without two connections—but there are a lot of customers that want to fly the whole thing in business class. We have a lot of AAdvantage elites based in Dallas looking to go to Lagos, Nigeria, or places in India, and they want an experience where they can get upgraded, get lounge access and things like that. We've delivered the basic things, where you can get a connection to Lagos. Through this year and into early first quarter, we're going to deliver things so that it's easier to get upgraded and access more premium seats.
BTN: Do you expect this will help you win new corporate accounts?
Raja: Most definitely. All of it together is huge for our corporate customer base. For so many of them, though business travel is really low now, as we start getting into the third and fourth quarter of next year, we're already hearing that they're eager to come back to travel, and we think there will be a bit of a run at first where a lot of people will want to pursue new opportunities, chase new investments and lock down new sales. Having these partnerships up and running is going to be key. While we're doing all of that, we're frantically including all of these companies in our corporate programs and dealings. They're eligible for all the rewards out there, too. As people are ready to come back and resume their lives, we want to make it as easy as possible to do business through the AA brand and our partners.
BTN: Will you be relying more on these and your established partners in the post-Covid world?
Raja: In a world where there is less demand than there is supply, it makes what we do across these different partnerships so critical. It used to be that we could sustain a flight to Dubrovnik, for example, because there are so many customers who go to London or Madrid and the other places, that it was hard to provide connecting seats to get someone to Dubrovnik, which was great for us. Now, there isn’t the same level of demand to justify 14 New York to London flights, so we have to get more creative about how we do that. One of the ways to do that is instead of flying nonstop to Dubrovnik, we'll connect some of that over London. Having these partnerships being seamless in the eyes of the customer is important.
What hasn't changed is having a large and expansive network is very valuable, and we do that both by flying to places ourselves and by having partnerships that enable connectivity and by using these partnerships to grow our own organic network. What is changing rapidly, and we are probably the vanguard of that, is that these partnerships are very seamless for the customer. We're keen to bring that about as quickly as possible, not just with Alaska and JetBlue, but with [Japan Airlines] and [British Airways] and others, and as this thing goes along, those partnership we treasure the most are the ones where we're the most integrated.
BTN: How are some of your testing programs going so far?
Raja: VeriFly could be uniquely big for the world of international corporate travel. There's already increasing amounts of comfort with short-haul travel, and with the greater distribution of the vaccine, that grows exponentially. For the really long-haul trips to deep South America, Asia or parts of Africa or Europe, the differences in quarantine, testing and vaccine distribution is going to make it so that having things such as VeriFly as crucial to have for markets, both from the perspective of the health regulators out there but also from the customers' perspective in having the confidence of knowing coming into or going out of a market is verified as being healthy. It's a really big, crucial step forward to bring corporate travel back into long-haul. It helps a lot of corporate travel managers really know that they're handling the duty of care very well, so we're keen to push it and are proud to be able to test it in Chile to start.
BTN: Just keeping up with what the requirements are by region will be a challenge.
Raja: Even for so many corporate travel managers, who are arguably the most knowledgeable travelers who are out there, in the current world it's really confusing. Do I need a test? What test do I need? Do I need to quarantine? When I get there, do I need to quarantine? There are so many different things that are there, and the more we can standardize it and automate it, the better things will be.
BTN: American Airlines has gone a bit beyond its competitors in terms of eliminating change fees, including the recent announcement you are getting rid of them for long-haul international flights. What is driving that?
Raja: We've applied it to international, but we always give people the residual value as well, which for all customers but especially corporate customers, is big. It's really simple. As we see it now, for the foreseeable future, there are going to be fewer customers than airline seats, and those airlines that are going to be the most successful, not just in the post-pandemic recovery but the long run, the next seven, 10 or 20 years after the pandemic, are the ones that are really easy to do business with.
BTN: You recently hosted a press flight on Boeing Max aircraft. What will its return mean for your fleet?
Raja: We couldn't be happier with the progress that's been made around the Max and especially with the huge effort from our own team. We'll be the first to bring the Max back. Our pilots were crucial in the [U.S. Federal Aviation Administration]'s work, Boeing's work and the global community's work. We're really proud to be able to do it. It's a highly capable airplane that can serve a lot of markets from Miami to South America. The early returns, from those who've been on it, have been nothing but glowing. We think it's something that can help us operate the network we have a lot more efficiently. We can streamline our fleet in places like Miami and New York. The first commercial flight begins on the Dec. 29, and we start stepping it up from there.