FlyerTalk Forums - View Single Post - Target revenue levels for GLD/PLT/EXP
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Old Oct 1, 2003 | 12:03 pm
  #4  
ananthar
20 Years on Site
 
Join Date: Jul 2001
Location: Madison(WI) USA
Programs: , AA Plat 2MM, FB Gold, Hilton Gold
Posts: 375
Keep in mind that most airlines carry mileage liability on their books at a rate of around $0.001/mile (NOT $0.01), so the cost for the extra miles for EXP are really :

100,000 extra miles (over base) : $100
8 VIPOW's at 25,000 miles/VIPOW : $200
AC discount : $200 (probably doesn't cost them $200)

Apart from the EXP desk I don't think the cost to AA is more than $500/year. And I am not sure that the EXP desk has any net cost to AA : the EXP agents probably cost more than regular agents but they probably generate additional sales by making the sales process smoother/faster for the best customers. We've also heard plenty of stories on FT of EXP agents handling some complex itenary with upgrade in minutes where a regular agent takes 30 minutes to over an hour.

Airlines do reimburse each other at a higher rate for mileage ($0.02 typically) : so an EXP qualifying by flying a partner airline is earning AA $2000 for the base miles (assuming AA pays for the bonus miles).
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