nrr

Selling F seats at high prices is very different from allowing a non-elite to get (upgraded) into F for a "few" $. This, IMHO, runs contrary to one of the perks I expect as an EXP [free domestic upgrades--when available].

nrr

The following situation, while not exactly the same as the main gist of this thread, is related:
I had an evip pending for jfk-zrh, in Feb. 2010 [I could not do OLCI since the evip was wait listed, and since ranking is based on when you did OLCI, I was #7 (per AC agent) on the list. At jfk while printing my bp from the kiosk, I was offered the upgrade for $3000. I don't know if anyone "bit" at that price.
The GA, announced at the start of boarding, that NO upgrades or standbys were going to be processed, since the flight was "sold-out". BUT I did get a notification from expert flyer (time stamped 5 minutes after departure) that one "c" class seat was available.

Andriyko

Well, I can't agree with you on this point. I believe any additional revenue is good for the airline. I just don't see what AA wins if it turns down even 100USD from a coach pax to sit upront in faviour of an EXP - so that the latter has an incentive to buy yet another deeply discounted coach ticket but consume a much higher value product (a seat in F)?
Upselling during check-in is a creative way to maximize revenue - why give something for free if there are people willing to pay for it?
My view is that selling an F seat in any manner does not run contrary to the EXP perks which is free upgrades where available.

pbjag

What I find so odd is that this puts non-elites ahead of elites who DID cough up extra $$ by purchasing upgrade stickers.

Japhydog

IMO, your post focuses on short term tactics and neglects strategy. The FF program is a HUGE moneymaker for the airline. Diminishing the program in the way you suggest will cause that revenue to decline as people, instead of playing the FF game, chase the lowest cost/best service ticket. As mentioned by many folks above, people will flee to Virgin America and Jetblue. This will be followed by cancellation of loyalty credit cards, not pursuing loyalty banking arrangements, etc. Bad long-term strategic move.

brp

I think you have a warped perspective (as we all do ) from reading FT. I'd be quite sure that, as a percentage there are not "many" achieving top tier status on the cheap. It just looks that way from reading here. So this part of the argument is not particularly valid.

Cheers.

MiamiAirport Formerly NY George

I'd certainly agree that most EXPs are flyers buying more last minute tickets and/or International travel. Stepping away from the world of FT it takes a lot of flying to hit 100K miles a year even with a few DEQM promotions thrown in. The percentage of EXPs that are doing it mostly or solely on leisure flying utilizing cheap fares is likely quite small. Sure, EXPs like myself and brp are getting EXP on the cheap but for AA to alienate its entire EXPs at the expense of people like us is just not worth it financially.

Andriyko

I think my post focused on the airline getting more revenue and on the fact that EXP upgrades are based on availability. Perhaps, most EXPs have come to expect to never fly in coach BUT the fact still remains that upgrades depend upon there being availability. Your post assumes that I suggest to take away a benefit from EXPs whereas I am merely saying that it is good for AA to fill as many F seats as possible. In theory, an EXP should not know how AA sold F seats - full fare, instant upgrade or upsale - and say that as an EXP they are more deserving to get the F seat than someone paying a surchage on the Y ticket.
Yes, FFPs are a huge draw but no one is taking anything from members... Everything remains in tact - one can earn/burn miles, have priority service, expanded luggage allowance, the only thing is that there may be fewer seats for complimentary upgrades but that does not mean that they'll be completely gone.


Perhaps. I read many stories how how cheaply some people got EXP status.

lobo411

Actually, it's brilliant if you're aspiring to be the next Gerald Arpey. You can ruin the airline, get paid $6 million/year in salary, and blame it all on some poor sap who makes $45k a year serving Pepsi and orange juice to slack-jawed yokels.

The elite traveler can't check in for his flight if he wants to stay on the upgrade list unless he buys enough stickers to cover the upgrade. $$ in AA's pocket.

The kettle traveler isn't going to buy stickers--ever. But they will pay an equivalent price for a guaranteed upgrade. $$ in AA's pocket.

The elite traveler will never have the opportunity to use his stickers, since the kettle is being offered the seat first. So AA gets paid twice and only has to "ship" one product. Not bad, huh?

Of course, this is unsustainable in the long term. The elites will eventually wise up, and the airline will continue its vertical nosedive. But hey--what do you care? You're a Gerald Arpey, C-Suite, red-blooded American business executive. You don't care about the long run--only the Germans and the Chinese do that. Your job is to milk the company for every dollar it's worth and then move on to the next, Mitt Romney-style.

Ritz

Excellent analysis. Both topically and politically.

tylerdurden4543

And like most of these analyses, factually wrong. In 2011, Arpey earned a salary of $600k (the lowest in the industry, by the way) and stock grants/options worth $4.5 million. With the Ch 11 filing, those stock awards (and the stock of thousands of other shareholders) are now worthless. Let's be clear, Gerard hated the idea of Ch. 11 and sought to avoid Ch 11 until the end (perhaps too long to save the business).

nickflies

In addition to the earlier-mentioned points about degrading the program, which will cause many high-value customers to leave (don't forget that even the cheapest EXP is still a relatively high-value customer), the other problem here is that they are offering these ONLY to non-status passengers.

As someone else mentioned earlier, it's about transparency. If AA wants EXPs to pay for upgrades, fine - it would be a dumb move, but fine. But to offer upgrades to non-status pax and NOT to EXPs (at any price), leaving them in coach while a once-a-year flier gets to be in F for $90... that's just wrong.

Fornebufox

Hmm, maybe it's a teaser? Offer carefully selected non-status flyers a taste of the good life up front and then follow up with status marketing? Perhaps pax who are offered LBFUs are targeted based on their flying history and potential for increasing their AA travel. They know why we fly, after all.

(Wait, what am I thinking? This is AA IT we're talking about)

All American Flyer

I think someone ought to officially ask AA what's going on here. I'm willing to offer them the benefit of the doubt. However, if te FFP upgrades really do erode in this manner, elite flyers in LAX/NYC/ORD/SFO/etc will surely defect to carriers providing more frequencies to more destinations

Science Goy

I suspect the official answer will be NOYFB. But we already have at least one unofficial (and highly reliable) answer that nothing's changed.