Gary Leff: SEC filing - AAdvantage devaluation hurt AA profits
Apr 13, 2017, 7:44 pm
#1
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Gary Leff: SEC filing - AAdvantage devaluation hurt AA profits
Interesting.
"KILLING THE GOLDEN GOOSE: SEC Filing Shows AAdvantage Devaluation Hurt American Airlines Profits"
by Gary Leff on April 13, 2017
http://viewfromthewing.boardingarea....lines-profits/
(Mods - feel free to merge/move)
"KILLING THE GOLDEN GOOSE: SEC Filing Shows AAdvantage Devaluation Hurt American Airlines Profits"
by Gary Leff on April 13, 2017
http://viewfromthewing.boardingarea....lines-profits/
(Mods - feel free to merge/move)
Apr 13, 2017, 8:31 pm
#5
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Love the Casey Neistat reference in the title. I guess the memories of his AAdvantage video still live on.
Penny-wise and pound-foolish, indeed. I don't see it getting any better, though, and it could very well get worse.
Penny-wise and pound-foolish, indeed. I don't see it getting any better, though, and it could very well get worse.
Apr 13, 2017, 8:33 pm
#6
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That whole blog post is just nonsense and a great example of post hoc ergo propter hoc.
They had an estimate as to revenue (which is still expected to be up 330M) and they had to change that expectation, this happens. My guess is the airline credit card market is getting saturated, there was the large 100K signup bonuses last year that many in the target market probably took advantage of, so they just had fewer signups than they hoped for in Q1 (shrug). To claim this was caused by a change in the award table or earning rates for flying would be funny as a joke but I think the author in that blog was serious so its kind of sad.
They had an estimate as to revenue (which is still expected to be up 330M) and they had to change that expectation, this happens. My guess is the airline credit card market is getting saturated, there was the large 100K signup bonuses last year that many in the target market probably took advantage of, so they just had fewer signups than they hoped for in Q1 (shrug). To claim this was caused by a change in the award table or earning rates for flying would be funny as a joke but I think the author in that blog was serious so its kind of sad.
Apr 13, 2017, 8:36 pm
#7
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Penny pinching Parkers continues to sacrifice future dollars to save pennies now.
It is a losing cycle - cuts to AAdvantage hurt profits, which lead to more cuts to try to lower costs, which lead to less revenue (people become less willing to spend more to fly on USdbaAA), which leads to more cuts...
It is a losing cycle - cuts to AAdvantage hurt profits, which lead to more cuts to try to lower costs, which lead to less revenue (people become less willing to spend more to fly on USdbaAA), which leads to more cuts...
Apr 13, 2017, 8:46 pm
#8
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Sounds like Non Sequitur to me. I dropped AA CC when they no longer counted towards MM status. Nothing to do with devaluation.
^
That whole blog post is just nonsense and a great example of post hoc ergo propter hoc.
They had an estimate as to revenue (which is still expected to be up 330M) and they had to change that expectation, this happens. My guess is the airline credit card market is getting saturated, there was the large 100K signup bonuses last year that many in the target market probably took advantage of, so they just had fewer signups than they hoped for in Q1 (shrug). To claim this was caused by a change in the award table or earning rates for flying would be funny as a joke but I think the author in that blog was serious so its kind of sad.
They had an estimate as to revenue (which is still expected to be up 330M) and they had to change that expectation, this happens. My guess is the airline credit card market is getting saturated, there was the large 100K signup bonuses last year that many in the target market probably took advantage of, so they just had fewer signups than they hoped for in Q1 (shrug). To claim this was caused by a change in the award table or earning rates for flying would be funny as a joke but I think the author in that blog was serious so its kind of sad.
Last edited by nutwpinut; Apr 13, 2017 at 8:55 pm Reason: Moved thumbs up down to make sure it was affiliated with ryan182 and not to the article.
Apr 13, 2017, 9:13 pm
#9
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Does the dual credit card strategy have anything to do with this? I dropped AA CC a while ago but this new system is not worth it IMO.
Apr 14, 2017, 12:58 am
#10
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So when is VFTW's next post on an unprecedented/outstanding/great CC sign up bonus miles offer?
These bloggers have no credibility on frequent flyer program devaluations when they refuse to acknowledge any link between the reason for those devaluations and the credit cards that they are constantly hawking.
These bloggers have no credibility on frequent flyer program devaluations when they refuse to acknowledge any link between the reason for those devaluations and the credit cards that they are constantly hawking.
Apr 14, 2017, 1:08 am
#11
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They might have devalued them, but don't worry because the value doesn't matter when you can't use them!
Apr 14, 2017, 1:43 am
#12
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I don't know how this guy comes to the conclusion. But the SEC filling is MARCH traffic report only. From what I read, the weather related cancellations and seasonable adjustment kicked in and influenced the result. The high value of US dollar is hurting Atlantic and Latin America market, but was compensated by expansion in Pacific market. Nothing indicate AAdvantage devaluation anywhere in the SEC document.
Apr 14, 2017, 5:02 am
#13
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Apr 14, 2017, 5:14 am
#14
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I think that conclusions like the devaluation of AAdvantage is directly responsible for a bottom line profit reduction are hard to reach or verify with any degree of certainty in a business as complex as an airline.
OTOH, and just as a single data point, the reduced value in AAdvantage, by itself, caused me to look at other carriers' programs. I ended up with QRPC and now fly QR almost exclusively. Although I may not be a very frequent flyer compared to other FTers, I commute between BKK and BOS five or six roundtrips annually in paid premium cabins.
OTOH, and just as a single data point, the reduced value in AAdvantage, by itself, caused me to look at other carriers' programs. I ended up with QRPC and now fly QR almost exclusively. Although I may not be a very frequent flyer compared to other FTers, I commute between BKK and BOS five or six roundtrips annually in paid premium cabins.