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Old Jan 21, 04, 9:01 pm
  #5  
Stefan Daystrom
 
Join Date: Aug 2001
Location: Los Angeles, CA, USA
Programs: AA Plat, BA, DL, Frontier, NWA, SWA, UA, HHonors Gold, Priority Club Plat, Choice Priv, BW, Diners
Posts: 1,554
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by mch710:
Please note my co-worker and I have been arguing this. He wants an answer, but doesn't want to set up his own account so I'm letting him use my login.

Co-worker asks:

I called AA and asked them if one could purchase tickets for 2 qualifying trips and earn the free ticket, without actually travelling. They said no.

Just to be clear, I was pretty sure they were going to tell me no. But the more I thought about it, the more I wondered what the motivation is for requiring people to travel.

AA gets my money whether or not I'm physically sitting on the plane. So why should it care which it is, as long as the company is making money on each passenger who participates? (Let's assume one can't cancel or re-schedule flights once booked). Theoretically, the more flight promotions it sells, the more it earns. In fact, AA might even save more money if people didn't fly, since they would have less in-flight expenses like beverages and food.

However, since AA doesn't let you buy 2 and get one free without travelling, one has to assume that the promotion itself isn't profitable for the company. It is actually important to AA that passengers fly to their intended cities. So, what, then, could be the purpose of that requirement?

My only guess is that AA may have partnerships and business arrangements with various vendors who expect AA to deliver people to their various cities to spend oodles of money. Perhaps hotels and car rental agencies kick back a certain percentage to the airlines for business flown their way.

Just curious if anyone has any thoughts on the subject?
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Think of as akin to "But Charlie, Starkist doesn't want tunas with good taste, they want tunas that taste good." In this case, AA doesn't want people who want a free flight cheap, they want people who they think will like AA's service between the cities in the promotion if they would just try it, and they're offering a free flight for just trying it. (And while they're at it, they're making sure the free flight has just about as many strings attached as it can, since it's just a "free toaster" kind of prize, not a "grand prize" kind of prize. It's just supposed to be enough to show someone that AA goes lots of other places that JetBlue doesn't. If you were never weighing repeated JetBlue flying against repeated AA flying, you're not the kind of person AA particularly wants participating in this promo. So why in the world would they want you to not have to fly???

Another way to look at it: Why in the world would they want to let ANYONE buy a $700 ticket for $400 just by claiming they were going to fly twice between CA and NYC for that $400 but then not doing so? They figure if you really want to fly on a highly restricted ticket in coach halfway across the world, you won't mind parting with $700 dollars. The free $700 ticket is worth giving to someone who only spent $400 ONLY if they're likely to spend a lot more (by continuing to fly the same route on AA from now on), not if they're over and done with once they've spent the $400. If that's all it took, they'd be losing $300 on each such transaction, wouldn't they?

Finally, the economics from YOUR standpoint: Just how much are you going to value that free ticket if you find that there are no seats you can book with it for any of the destinations you were intersted in at any of the times you can actually go? (The more people that participate in this, the more likely that is to happen, especially during popular times of year, but of course it will depend a lot on where you want to go, when you want to go, and how far ahead you decide all that.) It's quite possible that it's worth even less than $700 if it has even more capacity controls than a $700 cash fare! (In particular, if you can't actually use it, isn't it worth about $0 to you? Now, it's one thing if you got this award for making a couple flights you would have made ANYWAY, and you can't use the award. But imagine the greater liability AA would have if you paid $400 cash for nothing more than the award and then still couldn't use the award at all?)
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