The Covid-19 pandemic has caused the customer mix at American Airlines to get younger. Customers are also less likely to have AAdvantage loyalty status, or even to be AAdvantage members at all, said chief revenue officer Vasu Raja.
Speaking Wednesday morning during the 2020 Cowen Global Transportation & Sustainability Mobility Conference, which was conducted virtually, Raja explained that American's network, like those of competitors, has historically been built around high-yielding business travelers. Such customers tend to be older than the average traveler, and they will return to flying more slowly.
Meanwhile, the airline has experienced a significant share shift to flyers younger than age 40 during the pandemic. Key for American going forward is to acknowledge the customer is changing.
"There's people out there right now, and we need to go and build a relationship with them," Raja said.
For American to gain a relative advantage during the Covid-19 recovery, it must bring new customers in and gradually move them into higher loyalty tiers.
Raja said that American's primary hubs in Charlotte and Dallas now receive 55% to 60% of its traffic, up from approximately 40% pre-Covid. The shift has been made to preserve as much connectivity as possible, especially to leisure destinations in the South.
Previously, American has disproportionately rewarded business travel over family travel in the AAdvantage program, Raju said. Going forward, the carrier needs to better understand not only where customers are traveling, but why.
"The more we can understand the customer, the more the airline's network will change and the more the loyalty program will change so we can get a disproportionate share of wallet, of the actual customers," Raju said. "And that will enable us to serve both leisure-oriented travel patterns and business-oriented travel patterns."