There was a similar post on the UA board. I responded there that I don't think the major airlines get it. The majors like to divide travelers into two camps, business and leisure. While it's true that there are a number of travelers who only travel for leisure, almost all so-called business travelers travel not only for business but for leisure too. The number of business-only travellers is probably close to zero. I believe that the people who travel for business also travel more for leisure than most of your basic leisure travelers. Having said all this, my perspective is that if AA starts cutting benefits and coming out with fares that don't allow upgrades and the like, it will certainly lessen the likelihood that I will fly them in the future for my leisure travel and that, in turn, will negatively effect the business travel I give them as there is less opportunity to achieve elite status.

If, for example, AA adopts low cost fares that do not provide FF benefits (miles or upgrades), then they are offering nothing more than Southwest or JetBlue. (OK, MRTC is something they would have going for them.) On these fares, AA loses my business if their price is the same or higher than SW because I can travel on Southwest and still get credit for segments in their FF program. If AA can manage to consistently beat the low fares of SW, then I need to assess the loss of AA FF benefits against dollars saved. If the price is only a few dollars less, then SW would likely get my business, again because I would get something in their FF program vs. nothing in AA's program. The only opportunity is if AA significantly beats the competition's price.

Basically, the major airline that attempts to compete with a no-frills model can only do so if they can beat the competitor's price. And in so doing this, they stand to turn the entire industry into one where price is everything and thus isolate a substantial number of their travelers who have a lot invested in their FF program. For AA to prosper, they need to reduce their costs to such a degree that they can continue to offer a world-class FF program, while charging the same as the competition. That is really the only way they will keep the business/leisure traveler and entice the pure leisure traveler not to fly the competition.