American Airlines says it will spend more than $2 billion to make its planes more pleasant for passengers, the latest salvo in a competition among carriers to attract high-paying frequent fliers.
American Airlines Group Inc. said Monday that it will invest in lie-flat seats, Wi-Fi service on international flights, more entertainment offerings and a refresh of its airport lounges around the world.
The airline had already announced some of the upgrades but added new ones, including retrofitting some older Boeing and Airbus jets, renovating airport lounges and putting satellite-based Internet access on international flights.
The announcement comes on the eve of the one-year anniversary of the merger between American and US Airways. The deal became final on Dec. 9, 2013 and created the world’s largest airline.
CEO Doug Parker said the company now has a network of flights to compete with rivals and it will be spending money to create a better product. It is adding hundreds of new planes over the next several years.
Its rival, Delta, is breaking its two-cabin service into five levels -- Delta One, formerly called BusinessElite, and first class up front; and comfort plus, main cabin and basic economy in back -- and giving a few goodies to economy-class customers who pay more than the cheapest fares.
Changes on the planes and at the airport are not limited to international flights. This summer, JetBlue Airways Corp. added a premium service called Mint with lie-flat beds on transcontinental U.S. flights.
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U.S. airlines are able to make such upgrades because they are generating record profits, thanks to strong travel demand and falling energy prices. Demand has been so strong that airline executives have said that they don't believe they need to pass savings from cheaper fuel to passengers in the form of lower ticket prices.
At American, the company earned $2.3 billion in the first nine months of this year, up from $167 million in the same period of 2013, giving it the resources to upgrade its planes and airport facilities.
NBC 5's Brian Curtis contributed to this report.
