Steve M

I agree with everything you said, except the word "tiny." Based on other Amex lounge access agreements, the lounge doesn't get a fraction (tiny or otherwise) of the $450 Amex Platinum membership for each member, but gets a per-visit fee that's probably in the neighborhood of $20/visit.

There will certainly be a set of travelers that AA gets less revenue from if they drop their AA membership and use Amex. Consider the case of the person that travels once a quarter, and uses the lounge in each direction. That's 8 visits a year, so AA would get about $160 a year for that passenger. They'd lose out if that person drops their AC membership

But also consider all of the Amex Platinum cardholders that might visit the Admirals Club only a few times a year (say, 3-5) and would never justify a regular AC membership. That's $60-100 more per year for each such person to AA than if they didn't have the Amex arrangement, and I suspect that there are a great many of these people out there.

Then there's a third category of traveler: consider a business traveler that travels one round trip on AA a week, 40 weeks a year, and has a lounge access for each direction. If such a person already has an Amex Platinum and an AC membership, and drops the AC membership because of the Amex access benefit, AA's revenue goes from $450 a year for the AC membership to $1600/year from Amex. As far as why Amex would allow this to happen, there are two answers: the main one is that for every person that actually uses the lounge access to that degree such that Amex's cost is more than the annual fee, there are probably hundreds if not more that pay the fee in expectation of using the features but never do to the extent they'd like to. Another reason is that a heavy lounge user with an Amex Platinum is likely to put a huge amount of other travel expenses on the card.

fti

+1. Pretty much what I was thinking before I read your post. Obviously lobo411 doesn't understand the mechanics of the AX Plat card, habits of their cardholders, etc.

HookemHorns

Here's my view, as an AmEx Plat - the lounge benefit is very useful to me since no one legacy carrier can meet my route needs. In the decade prior to AmEx adding AC access, I had flown maybe 1 or 2 AA segments total. Since they've added AC, I've spent an average of $10,000 per year on AA flights. Although I've come to like some aspects of AA, I think if the lounge benefit were to go away, AA could count on losing at least half that business.

wesheltonj

Years ago when I was commuting between DFW & SAT, and DFW was a DL hub, I was a CR member. They had 3 CR in DFW & 1 in SAT, DL closed the SAT, I was upset but, I still was a member. However, when I no longer had to commute, I dropped the membership and went with AMEX as I only used the clubs a couple of time a year. When AC was add even better. I am sorry to see CO go for folk like me who only use it a few time a year the clubs are making money, as I would not purchase a membership only flying a few time a year.

mia

Some of these travelers would have purchased Day Passes at $50 per person. A party of three adults would pay $150, but could be admitted with one Platinum Card. On the other hand, many people would choose to sit at the gate rather than pay $50 for a brief visit, but (we assume) AA collects from American Express each time a card is swiped. After three years AA should be able to measure the change in annual memberships and Day Passes sales, and weigh that against the card swipe revenue. (A revenue reduction is not necessarily a negative. This gives AA a method to extend different pricing to different groups without lowering published prices. )

Bear in mind also that American Express and American Airlines are not strangers. They do have a co-branded card-issuing relationship, though not for consumer or small business cards.

The hidden variable is whether Citi has ambitions to issue an AAdvantage card bundled with an Admirals Club membership. If they do, I expect the AA arrangement with American Express to end, otherwise not.

lwildernorva

Could see Citi doing that if they wanted to get into the high-end game as Chase has done, but that would be a big jump in their annual fee structure. Maybe they'd dip their toe in by first offering a card with an approximately $150-175 annual fee that provided waiver of baggage fees and a couple of AC day passes per year.

kuaa

OK phew, thanks.

I heard it from the first clerk, and then went back and asked another clerk. Both said the same thing. Strange.... The other comments about a co-branded Cit AA/Amex are interesting too. I guess we can only see!

Kagehitokiri

PP select has AA...

mtkeller

No it doesn't. AA clubs are not part of Priority Pass. (Well, possibly an odd one here or there, but it's not a blanket inclusion in PP.) AA clubs are provided to AmEx Plat/Cent cardholders through the lounge access program.

mia

Citi is already in the $500/year annual fee market, but not with an AAdvantage card. It's an obvious omission from their product mix.

garykung

Even I don't fly the dAArkside, I have AMEX Platinum as well.

I guess right now it is too early to tell if something will happen.

Unlike UA/CO, the dAArkside does not seem to have problems with AMEX...

It may be another DYKWIA AC agent...

Kagehitokiri

ah PP has 10/43 AA

http://www.flyertalk.com/forum/16027439-post3.html

mia

Citi does not seem to have the same rivalry with American Express that has developed between Chase and American Express.

lwildernorva

Had missed that one. And you're right, that's a big omission from their stable.

jammanxc

American Airlines club in HNL accepts Priority Pass