American chases Delta with $2 billion in onboard amenities

DALLAS – American Airlines is chasing rivals led by Delta Air Lines in updating passenger amenities with a plan to spend $2 billion on new seats, in-flight entertainment and onboard power outlets.

A year into the US Airways merger, American is embarking on upgrades more visible to fliers after emphasizing the basics of meshing operations. With the blending of the carriers still underway, the world's largest airline faces challenges years after competitors finished their mergers.

"American is playing catch-up to other airlines, the result of past business decisions to not invest in its passenger experience," said Henry Harteveldt, a travel consultant with Atmosphere Research Group in San Francisco.

Most of the changes unveiled Saturday by Fort Worth, Texas-based American involve larger jets used on international routes. Work has begun on American's Boeing 777-200s and 767-300s, including in-seat entertainment or in-flight connectivity and lie-flat business class seats. It's due to be completed in 2016.

Lie-flat business seats also will be added to single-aisle Boeing 757s flown on overseas trips, while power ports and Wi-Fi will be extended throughout the plane.

On the heels of American's product changes, Delta on Monday said it would rebrand its cabins to create five distinct offerings.

"Delta is leading the industry in what products we are offering our customers, and the market is seeing that," he said.

American has produced record profits since the US Airways deal closed on Dec. 9, 2013, paid its first dividend since 1980 and announced a $1 billion share buyback plan — soothing creditors who ended up with stakes in the new airline when it left bankruptcy via the merger. The shares have more than doubled in the past 12 months.

By year's end, American will have received about 100 new aircraft while retiring older planes, swaps the carrier said will give it the youngest fleet among its U.S. peers at 12.3 years. It will add 112 new planes next year, 84 in 2016 and about 300 more through 2022.

Most of American's new aircraft will have seat-back video screens throughout. All of the planes in the carrier's primary jet fleet now have Wi-Fi, with plans to expand to it to regional aircraft, said Joshua Freed, a spokesman.

American's merger was the last among the deals shrinking the ranks of U.S. full-service carriers to just three. Delta bought Northwest Airlines in 2008, and today's United Continental Holdings was formed in 2010 when former United parent UAL Corp. combined with Continental Airlines. The "angled-flat" business-class seats that American began installing in the mid-2000s had a slight slope and were inferior to the lie-flat models being adopted by United and foreign carriers, according to Atmosphere's Harteveldt.

While American's earlier strategy squeezed in more seats, it now has to meet the lie-flat standard to appeal to high-fare corporate customers, Harteveldt said.

Delta has had seat-back entertainment systems on all cabins of its international fleet since 2013, Skrbec said.

Among changes announced Monday, Delta will rename its BusinessElite cabin, which is found on long-haul international routes and some transcontinental U.S. flights, as Delta One. Its Economy Comfort section, which offers extra legroom for a fee, also will get a new name, Delta Comfort Plus. Customers in the premium section of coach will get expanded access to complimentary beer, wine and upgraded snacks on international routes and domestic flights of more than 900 miles.

Delta is retaining its First Class, Main Cabin and Basic Economy fares and cabins. To better differentiate its offerings, the airline will install new seat covers on its Delta One, First Class and Delta Comfort Plus seats, Skrbec said.