Originally Posted by
Xero
The ending of the program might be a good thing. Sometimes I felt that AA is more expensive than the other airlines because the gift cards cause all the cheap fare buckets to sell out quickly. It will return things to normal.
Like the others, I don't understand the argument that the sale of gift cards at Costco at a 10% discount caused the cheap inventory buckets to sell out more quickly than usual.
What is indiputable is that AA has been very successful at raising fares this year, as its first half unit revenue (passenger revenue per available seat mile) has increased nearly 10% over the first six months of 2011. Tickets are much more expensive this year, but I don't think it's because AA has sold gift cards at Costco.
If AA was able to raise its unit revenue by such a substantial percentage despite selling gift cards at a discount of upwards of 20% (assuming that Costco paid about 80% of the face value), then AA's performance in the first half of 2012 has been spectacular.
My WAG is that Costco sold fewer than one million of these gift cards since they were introduced in early 2011. That would mean that gift card revenue to AA was perhaps $240 million, or less than FOUR DAYS worth of revenue.