Originally Posted by
sharklover
Well for someone who rarely flies AA they could charge $2 million on an AA credit card. For this AA would only earn around $14,000. They then would also have given away 2 million miles. Tickets used may ened up costing alot more than the $14,000. So AA really made nothing for making someone plat. What does it cost if some is plat? A fair amount with giving away upgrades, double miles and lounge access. I have always been amazed that they made it so easy to get gold for life. It would not surprise em if they would change it to stem the number of golds and plats from this program. Earning it from flying is what makes the most sense.
Your numbers are off. AA would make more than that on the miles. A couple of things to consider:
1. Price that the credit card provider pays AA for the miles. I know it is more than you are calculating. I can't say the exact price due to confidentiality agreements, but it is more than $14k
2. You are assuming that 100% of the miles are via the credit card - if they earn some of those miles thru other non-flying channels such as dining, e-shopping, etc. the money AA earns will be higher since those retailers pay more per mile than the credit card issuer
3. You'd be amazed at how many redeem for domestic tickets. Not everyone is an FT'r and redeems for int'l F
4. Finally, without elite status, there is a cap of 100k miles per year on the credit card (Platinum level, it is 60k on some other cards). So the customer would take several years to earn the 2MM for LT Platinum.