American Plans $2 Billion Upgrade of Planes, Clubs

American Airlines says it will spend more than $2 billion to make its planes more pleasant for passengers, the latest salvo in a competition among carriers to attract high-paying frequent fliers.

The airline had already announced some of the upgrades but added new ones, including retrofitting some older Boeing and Airbus jets, renovating airport lounges and putting satellite-based Internet access on international flights.

Its rival, Delta, is breaking its two-cabin service into five levels and giving a few goodies to economy-class customers who pay more than the cheapest fares.

American Airlines Group Inc. said Monday that it will invest in lie-flat seats, Wi-Fi service on international flights, more entertainment offerings and a refresh of its airport lounges around the world.

American merged last December with US Airways, although the airlines still operate separately. CEO Doug Parker said the company now has a network of flights to compete with rivals and it will be spending money to create a better product. It is adding hundreds of new planes over the next several years.

Delta said Monday that beginning March 1, it will break its two-cabin offering into five classes: Delta One, formerly called BusinessElite, and first class up front; and comfort plus, main cabin and basic economy in back.

Delta spokesman Paul Skrbec said that "comfort plus" customers will get premium snacks that are now limited to the front cabin, and their seats will have new covers - a "visual cue" that they are sitting in a premium section of the economy cabin. The company will release more details at an investor meeting Thursday, Skrbec said.

Most of the upgrades are aimed at high-spending fliers including business travelers who pay among the highest fares. Delta and United will overhaul their frequent-flier programs early next year to better reward big spenders - American has so far resisted.

Changes on the planes and at the airport are not limited to international flights. This summer, JetBlue Airways Corp. added a premium service called Mint with lie-flat beds on transcontinental U.S. flights.

U.S. airlines are able to make such upgrades because they are generating record profits, thanks to strong travel demand and falling energy prices. Demand has been so strong that airline executives have said that they don't believe they need to pass savings from cheaper fuel to passengers in the form of lower ticket prices.

At American, the company earned $2.3 billion in the first nine months of this year, up from $167 million in the same period of 2013, giving it the resources to upgrade its planes and airport facilities.