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American Airlines faces pressure to reconsider high fees amid United's new Starlink initiative

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American Airlines faces pressure to reconsider high fees amid United's new Starlink initiative
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In light of United Airlines' decision to roll out Starlink internet across both its mainline and regional fleet, providing the fastest, best-performing Wi-Fi in the sky and making it free for customers, questions arise about whether American Airlines will follow suit. Delta and JetBlue already offer free Wi-Fi, while Southwest and Alaska charge significantly less than American.

CEO Robert Isom had previously articulated his stance on charging for Wi-Fi back in 2018. "Wi-Fi should generate revenue," he said, adding that unless competitors force them not to charge for it, they would continue with their current model. Isom explained the challenges associated with offering free Wi-Fi: "Think about what you do on the ground now put it in a plane and then track satellites in a plane. So what you’re talking about ultimately is something that would be an expenditure of hundreds of millions of dollars."

At American's Media and Investor Day in September 2017, they announced free onboard messaging for passengers but later dismissed the idea as too expensive. Currently, while other carriers generally offer free messaging, this service remains unavailable for most American customers. Additionally, airlines that charge for Wi-Fi typically set prices around $8, whereas American charges between $20-$30.

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When Delta Air Lines prepared to offer free Wi-Fi in summer 2019, American Airlines had plans to match whatever Delta did. Despite a partnership with JetBlue aimed at aligning customer benefits, American did not match JetBlue’s free Wi-Fi offering when Delta finally introduced theirs.

Isom emphasizes that the airline prioritizes avoiding unnecessary expenditures and does not see itself competing in the 'premium' lane like Delta and United. Instead, they focus on their schedule as the product, targeting growing regions such as the Sun Belt to create connections that meet customer needs.

The challenge for American Airlines lies in its cost structure; even if ticket fares are similar among competitors, additional charges like those for inflight internet make them more expensive overall. This market position could pressure them into eventually offering free Wi-Fi despite initial resistance.

Ultimately, it appears likely that American Airlines will have to provide free Wi-Fi to remain competitive but may present this change as a gesture of goodwill towards their customers when it happens.

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