Bloomberg News

American Airlines Considers Change in Oldest Jet Livery

May 11, 2012

American Airlines Inc. jets sit on the tarmac at Dallas Fort Worth International Airport in Fort Worth, Texas. American’s livery design dates back to 1967. Photographer: Mike Fuentes/Bloomberg

American Airlines Inc. jets sit on the tarmac at Dallas Fort Worth International Airport in Fort Worth, Texas. American’s livery design dates back to 1967. Photographer: Mike Fuentes/Bloomberg

American Airlines is studying whether to adopt a new look for its jets, which sport the oldest livery among major U.S. carriers and an iconic polished-aluminum finish in use since the 1930s.

“We have made a decision to embark on a modernization of our brand,” Chief Commercial Officer Virasb Vahidi said in an interview. “That could culminate with a potentially new livery and logo -- that’s something we are evaluating.”

New planes that AMR Corp. (AAMRQ:US)’s American will begin receiving in 2013 offer a chance to update its red, white and blue stripes on the hull and tail logo with red and blue A’s and a stylized eagle. AMR has set a goal of exiting bankruptcy this year, while US Airways Group Inc. (LCC:US) is considering a possible takeover bid.

American’s livery has been in use since 1967, outlasting mergers, failures and shifting tastes across the industry. A new exterior also may mean dropping the signature bare-metal skin that dates to the era of propeller-driven airliners, which the third-largest U.S. airline has called a fuel-saver because an unpainted plane weighs less.

“They’ve waited so long to change it that their retro look has become chic again,” said Allen Adamson, managing director of the New York office of branding firm Landor Associates, which has worked with airlines on livery redesigns. “They have to balance that against what they would be getting from an identity change, which is best when it’s tied to a bigger story and a better customer experience. The trickiest time to do all that is in bankruptcy.”

No Timetable

The brand review began about 18 months ago, Vahidi said. That was before Fort Worth, Texas-based AMR’s Chapter 11 filing on Nov. 29 and US Airways’ pursuit of American, which includes signing labor accords with the airline’s unions. US Airways told the unions the American name would survive in a merger.

Vahidi didn’t give a timetable for a decision on whether American will change the exteriors of its planes. The cabin upgrades announced May 9 for wide-body planes used on international routes are part of American’s brand update, he said.

American consulted customers and employees, among others, as part of a “very detailed” assessment of the airline’s brand equity, or the idea that a well-known name can generate more revenue than products from a lesser-known brand, Vahidi said.

“People recognized it across the world,” he said of the brand. “It has a lot of equity in the marketplace.”

Carrier Makeovers

Aircraft makeovers have been common in the U.S. industry in the past decade.

United Continental Holdings Inc. (UAL:US) combined the paint schemes of predecessors United Airlines and Continental Airlines Inc. when those carriers merged in 2010. Delta Air Lines Inc. updated its livery four times since 1997, and its purchase of Northwest Airlines Corp. in 2008 marked the end of the smaller carrier’s trademark red tails.

Southwest Airlines Co. (LUV:US) abandoned its traditional orange, red and gold livery in 2001 to add blue, and US Airways changed its design following a 2005 merger with America West Airlines.

Changing a paint scheme on aircraft, which might necessitate updating signs at airports to reflect the new look, would be expensive and might end up as a “quilt approach” if it took too long to complete, Landor’s Adamson said.

“If I’m a creditor in their bankruptcy, I’m wanting to know why they’re spending this money now,” he said. “They have to show that it’s more than just looking out a window and seeing a new color on the plane.”

Dreamliner Challenge

Deliveries of American’s first Boeing Co. (BA:US) 787 Dreamliners in 2014’s fourth quarter pose a challenge to the airline’s traditional metal-finish exteriors: The new jets’ fuselage of composite-plastic materials can’t be polished like the aluminum skin of the carrier’s other Boeings.

American “is doing a lot of studying” to determine what the Dreamliner livery will look like, Vahidi said.

After taking Airbus SAS A300s in 1988, the airline initially painted them gray because of the planemaker’s concern that the uncovered aluminum would corrode, said Tim Smith, a spokesman. American later developed procedures that convinced Airbus the aluminum could be polished and corrosion prevented, he said. The airline no longer flies that model.

Deliveries begin next year for the first of 460 Airbus and Boeing narrow-body planes American ordered in 2011 to refresh its main jet fleet of 610 aircraft.

Smaller planes flown by the American Eagle regional airline are painted white and feature the same fuselage stripes as on American’s jets, with an eagle on the tail.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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