American Airlines pulls many levers to improve PRASM, but cautions there is no overnight solution

Airlines adopting low cost and ultra-low cost business models have triggered numerous industry transformations, but one of the most important effects of their proliferation is a fundamental change in industry pricing. Traditional yield management techniques have been upended, and full service airlines are working to adapt to new pricing methodologies.

American Airlines is in the process of overhauling its revenue management system, as well as creating crucial product distinctions as a base for revenue growth in the future. Product segmentation has become a buzzword in the US industry, as the three large global network airlines develop products to target a customer base that ranges from the infrequent traveller to high-yielding corporate customers.

The revenue management and product changes that American is putting into place will take some time to generate favourable results. In the short term, the airline is joining its large global competitors in acknowledging investor concern about the industry's negative passenger unit performance, and stressing that it is working diligently to return to positive PRASM.