Profile: Stephen Davis, American Airlines
Touchdown for world’s biggest airline
Next week American Airlines becomes the largest carrier in the world following its merger with US Airways. Director of international marketing Stephen Davis tells how it aims to improve passenger perceptions, show off its new fleet and focus on digital innovation.
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Stephen Davis has travelled 26,000 miles in the 10 days before meeting Marketing Week , touching down in two US states and three other countries and covering four continents in total.
When you are the director of international marketing at American Airlines – which on Monday (9 December) will become the world’s largest carrier – this amount of travelling comes with the territory.
After settling a competition-related lawsuit brought by the US Department of Justice last month, the carrier’s parent company, AMR Corporation, is on track to close its merger with US Airways Group with the first changes for customers expected to be implemented in January.
“It’s a surprise to us all that it is going to happen so early,” says Davis, “especially with Christmas coming up and Thanksgiving [last week], as so much happens in the US [at this time of year] and it is a very busy few months for passengers too.”
Based in the UK, Davis has headed marketing for AA across the EMEA and Pacific regions since mid-2011, before adding Latin America to his remit in August this year.
With teams in London, Tokyo, Shanghai, Fort Worth, Bogota, Lima, Buenos Aires, Mexico City, Santiago and Rio de Janeiro, it is hardly surprising that he racks up so many air miles, but he genuinely enjoys flying.
“Yes, I do a lot of travelling but it’s great fun,” says Davis, who is also a keen sailor. He once raced against four-time British Olympic gold medallist Ben Ainslie as well as competing in the 2009 China Cup International Regatta for team Great Britain.
Although Davis is unable to disclose how the company structure may alter following the merger with US Airways – except that the joint business will operate under the AA name (see Q&A below) – he confirms that there will be changes.
“You can anticipate that with any merger,” he says, “but it is too early to talk about the details at this stage.”
One thing that is certainly going to warrant a high level of attention is increasing customer satisfaction and bettering the flying experience. The brand has some distance to go to improve customers’ perceptions, given that it was ranked 81st in the 2013 World Airline Awards, which are voted for by passengers. That was a rise of three places from 2012 but there is still a lot to be done. Emirates earned the top slot in the poll.
“There’s no doubt that we have a job to do to re-establish American Airlines as a premier global carrier,” acknowledges Davis. “That’s what a lot of our investment in products and services is about.”
In the past, we were quite direct in the way we talked about the brand, but we’ve done a lot of work to soften some elements
The airline has taken 1,500 flight attendants through training this year – a programme which it will continue next year. Following the lead of British Airways (BA), it is also equipping cabin crew with mini tablet computers to provide them with more detailed information about passengers, such as their recent travel history and food preferences, in order to make the onboard experience more personalised.
“Giving our crews more information is really going to improve the way they deal with our customers,” says Davis.
“On top of this, we’re placing more foreign language speakers on board, particularly for our Asia routes, because it’s very important that we have both a cultural understanding of our customers as well as the language skills needed to serve them.”
In addition, AA has overhauled its international premium flying experience, which is now heavily influenced by the restaurant and hotel industries. Trolleys have been removed to reduce noise and disruption, so everything is hand-delivered to first- and business-class passengers, who are treated to an amuse-bouche ahead of their main meal, which can be pre-ordered before the flight.
Passengers also have the option of wine or champagne tastings while on board to turn their journey into a special occasion.
“We use the term ‘life uninterrupted’,” says Davis. “Passengers don’t need to stop their life just because they’re travelling. So instead of thinking of flying as a chore, people may actually look forward to it.”
He underlines the carrier’s three core principles: comfort, through improving the onboard experience, particularly in the premium cabins; connectivity, with 90 per cent of the airline’s domestic fleet Wi-Fi-equipped and long-haul aircraft following suit; and ease of travel.
Strategic partnerships play an important role in achieving this last objective. AA belongs to the Oneworld alliance – alongside other major airlines such as BA, Iberia and Cathay Pacific – whose members split costs and operate together on certain routes under ‘code share’ agreements.
Under the terms of AA’s settlement with the US government, the merged airline will surrender departure slots at several US airports, resulting in slightly fewer daily flights. But with a combined fleet of more than 1,400 aircraft, the new AA will still become the world’s largest carrier based on the industry measure of passenger revenue per available seat mile.
Despite spending so much time airborne, Davis tries to stay grounded where these bragging rights are concerned, appreciating that size does not necessarily equate to service.
As such, AA is not likely to mention its size in future marketing activity.
“There are several examples in different service industries where the biggest is not necessarily the best,” says Davis, adding that the airline would not want to appear complacent or conceited.
“[Being the world’s largest airline] is certainly something we can claim and it may be something we use for recruitment advertising, but I doubt we will use it as a consumer message,” he says.
It has been a busy year for AA, which in addition to planning for the merger has also undergone its first rebrand for 40 years after placing what it claims is the largest aircraft order in aviation history. Central to the order, placed in 2011, is the flagship Boeing 777-300, the first of which came into service this year. Davis says the rebrand in particular has required a global effort involving teams across multiple locations led from the company’s corporate headquarters in Fort Worth, Texas.
“My teams then have to ensure that we implement the agreed strategy at a local level,” says Davis, highlighting the need for global consistency but local relevance.
The carrier unveiled its ‘softer’ new look at the beginning of 2013, which over the next five years will see it introduce more than 500 new aircraft with updated branding. In addition, it will repaint existing aircraft, overhaul signage at airports and rebrand passenger lounges.
“We carried out a lot of research to understand what people thought of our previous brand,” says Davis. “We had some good bits that we tried to retain and we had some bad bits that we wanted to lose.
“When you take an iconic brand like American Airlines, you have to be very careful with it, so we didn’t want to throw out absolutely everything and start again.
“We were never going to go green with pink spots,” he jokes, “so what’s happened has been
The eagle emblem, which has featured on AA’s logo since 1934, remains central to the new designs developed by FutureBrand, but the airline was keen to replace the “industrial and angular” look with one that is more “contemporary and appealing”.
The core brand colours of red, white and blue are still present throughout and, for the first time, the tail fin on aircraft features a striped design to mirror the US flag.
The carrier is currently adapting its marketing approach to better reflect its new image.
“Previously, communication was focused on efficiency and run in a similar way to how we operate the airline business,” says Davis. “But we are now trying to make American Airlines more marketing-oriented.
“It’s great for people like me in the business because there are some new windows of opportunity but we’ve still got a bit of work to do in terms of how we bring the brand personality to life [see Q&A below].
“In the past, we were quite direct in the way we talked about the brand and used a very short, sharp, almost staccato, tone of voice, but we’ve done a lot of work to soften some elements.”
The airline has also undergone a huge amount of business change, adds Davis, referring to AA’s Chapter 11 financial restructure – a US bankruptcy law that allows businesses to reorganise their debt. It will complete the process on 9 December.
“The brand relaunch was really about making sure the change in our business strategy and what we are going through as a business are recognised,” he says.
As a result, AA has developed a three-phase narrative for communications.
“The first stage was about ‘reassurance’,” says Davis. “When we entered our Chapter 11 financial restructure in the States, we had to explain what that meant, particularly to our international customers, because although it is a fairly well-known law in the US and our competitors have already been there, it is less understood in the UK, the rest of Europe and Asia.”
Following the rebrand, the business is now in what it calls the ‘reinvigoration’ phase, which involves conveying its product proof points to customers.
“It’s the first time we’ve been able to do that as a business in the past 12 to 15 years,” says Davis. “We now have a new aircraft entering service every week and we’ll continue that into next year.”
The third phase will be ‘re-emergence’, which will see AA exit the Chapter 11 process and merge with US Airways.
The carrier is additionally seeking to boost its profile through brand partnerships, which have been an important part of its strategy for many years and will continue to be so following the merger, according to Davis.
AA has a strong link with the arts in both the US and the UK. It has worked with the London Film Festival since the early 1990s, became the official airline partner of the British Film Institute in 2010 and is partnered with six theatres in London’s West End under the Nimax umbrella.
“One thing we try to do from a marketing perspective in our sponsorship activity is find a bridge between the US and the UK.
“Often theatre productions are shown on Broadway as well as in the West End so it gives us a nice hook,” says Davis.
AA does more than static branding, however, opting for a number of branded bars in the West End, including at the Lyric and Garrick theatres, which Davis says are “a good way of keeping those premium cues in an environment that fits with American Airlines”.
The Hollywood connection is also key for the brand because the Los Angeles-to-Heathrow route is one of AA’s flagship services. For the UK premiere of 3D space thriller Gravity, starring George Clooney and Sandra Bullock, the airline created a 15-second 3D video which played ahead of the film.
The airline also has ties to Disney in the US, after the AA-branded character Tripp featured in this year’s animated film, Planes.
“We have had a lot of experience managing and working with partners in both theatre and film and we want to continue to do that following the merger,” says Davis.
“We are always looking for new opportunities and no doubt there will be many in 2014.”
As 2013 draws to a close, it also marks the end of a year of major change for AA, in terms of both brand and business structure.
Even in the midst of this upheaval, the airline recorded a net profit of $289m (£179m) for the third quarter of 2013 – its highest ever and a $527m (£326m) improvement on the same period in 2012.
With the US Airways merger imminent, 2014 promises to be equally exhilarating as AA’s transformation continues.
Q&A with Stephen Davis
Marketing Week (MW): How did you settle on the American Airlines name being used following the merger with US Airways?
Stephen Davis (SD): We reached an agreement fairly early on that the American Airlines name had a higher level of recognition and brand awareness and therefore we would leverage that. We have made significant investment in the brand over the past two years and throughout the restructuring process have been looking at a number of options and business cases. One was consolidation, which the whole industry is going through at the moment.
MW: What impact will the merger have on the AAdvantage loyalty scheme?
SD: The name AAdvantage, as far as I’m aware, will remain. However, US Airways has its Dividend Miles programme and we will be offering something that uses the best of both schemes. The combination is going to be quite key.
MW: Following the rebrand and merger, how do you plan to get employees lined up internally?
SD: Employee engagement is very important. We have gone through this rebranding exercise at AA so we now need to understand how to reflect the heritage of US Airways. At a senior level, I’m sure discussions will happen around how we merge the best values of the two airlines and then there will likely be some kind of employee programme to bring everybody up to speed.
MW: Can you sum up the AA brand personality?
SD: Distinctively American is what we’re going for. If you’ve got a brand name like American Airlines, it is a very good excuse to behave in that manner. The brand is moving towards a place where we are open, egalitarian and pretty laid back. On board there are American customer service elements throughout the customer journey, including cookies and milk served after dinner and our signature ice cream sundae.