elitetraveler

You're also talking about an industry that will try to save a buck wherever it can from taking olives out of salads to removing pillows. And fees are one of its first breakthroughs in finding new revenue streams.

Certainly both DL and UA in recent years put fare restrictions on using SWUs. It could be that at some point even elites don't have certain fees waived when they are traveling on very low fares.

Science Goy

Indeed -- a couple years back I was going to end the year with 95K EQM, so I booked a mileage run to NY to put me over. The friends and colleagues I told about this (including a few AA elites) thought this was utterly insane. Mileage runners basically make up a niche market within a niche market.

But elitetraveler's point is well-made; in fact, AA has already taken a step in this direction by (probably) eliminating free MCE access for GLD members in a year or so. Whether they'll add an extra layer of complexity by distinguishing between a full F-purchasing GLD and a BOSman-level EXP (), or just continue chipping away at GLD/PLT benefits, remains to be seen.

veganmacrochick

Is this about weight? Because if it is, we should all be weighed and then bags according to that to be fair. I mean, I am 120 pounds, my daughter is 50. Most of the other pax weigh much more than I do and their bags will weigh the same. Doesn't sound like it balances out to me..........

elitetraveler

The ongoing rumor is DL is going to relaunch Sky Pesos with more of a fare/revenue based focused. I think Horton has said a few times that AA's focus will be premium fare travelers and corporate customers - which makes sense as that's why they're investing in new premium products, new planes, etc. IMO the writing is on the wall - the only question is the timeline.

TheBOSman

AA could easily make CK a level above EXP, a la UA with GS over 1K. Broaden the ability to get CK somewhat to draw in some higher spenders who might not spend quite enough now (CK is $30k, maybe knock it down to $15k or so), and devalue EXP, but it only matters to the cheap-fare flyers that it is devalued.

The other thing that many forget is that many high level elites are on corporate contracts requiring they fly that airline anyway. It wouldn't matter for many of these people if AAdvantage even existed, they have to fly, AA has a negotiated contract with their employer, and the ability or lack thereof to earn miles will not change their flying patterns. Same with Skypesos at DL and OnePass at CO MileagePlus at UA. Loyalty programs exist to reward spend at the margins, not to keep $30,000 a year flyers happy when their boss tells them "You're flying AA whether you like it or not."

Everyone wants premium fare travelers and corporate customers. They are far more profitable, but there are only so many of them to go around. They can fill planes on only a few routes with those customers. There's a reason the legacies have major service to places like CUN, which is hardly a business oriented destination. The issue for airlines is that they want to sell all expensive tickets, but they can't charge their higher prices upfront except on a handful of days (Sunday after Thanksgiving, times around Christmas, etc.). However (making up numbers here), if AA sells, say, 15 full fare tickets on BOS-LAX, and that is enough to cover flying a 737, then AA will want to sell as many seats as possible, as most remaining seats on the plane are now extra revenue in effect, as all the costs of the flight are already paid for. However, AA can't sell those 15 full fare tickets and THEN sell the $130 transcons. They have to hope that they sell enough full-fare tickets that the plane isn't filled only with $130 transcons and 15 empty seats.

Science Goy

Not really. The marginal fuel cost of carrying another passenger, or another passenger's bag, is very small (and certainly smaller than the typical ticket or bag fee respectively). It's mostly about being an easily-collectible, additional charge.

phillyjoe

I am only stating what showed up in my info after the flight was paid for. As PLT, there is usually a statement somewhere that 2 bags (also for all others up to 8 folks on res) were free, and that priority access was included.

This time, for the first time, the confirmation mentioned that 2 carryons were free and listed the sizes.

MiamiAirport Formerly NY George

Not to mention Spirit certainly is not feeling any pain from a carry on fee. Remember AA was the first legacy to institute checked bag fees. Its only a matter of time before one of the legacy carriers wanders down this path.

elitetraveler

Of course AA wants to give as little as possible on the cheap fares and the new style fee-mania means non-elites on discounted Y fares are a literal smorgasbord of fee earning opportunities. Since load factors are at record levels, there is less benefit in selling a discounted ticket to an elite than a non-elite today.

Again, keep in mind the basic framework of these programs were set up before fees and when airlines were operating at 60 percent load factors.

Unfortunately for a lot of FTers the basic math works against them. On a full flight let's say there are 10 elites on highly discounted Y fares. If AA could have sold those 10 seats to non-elites they might have collected an extra $500. Now multiply that across 3,400 daily flights and 365 days = $62 million!

It just means that AA better feel they are making up that $62 million in some other way from those elites.

Science Goy

Well, I'm one of those elites that doesn't have a lot of choice in airline so in principle AA could knock me back to Kettle status and I'd still be stuck with them 80% of the time. However, for the other 20%, I often pay for AA out of pocket (even at a 50-100% premium over what AA's competitors are charging) for the elite benefits. Can't speak for anyone but myself, of course, but I'd be surprised if this type of behavior wasn't at least somewhat widespread.

Of course, this type of hypothetical ("Would you continue to fly AA if they charged for XYZ") is exactly the type of thing that market research surveys suck at predicting, so the only way AA can conclusively determine the fallout (or windfall) is by actually implementing such policies.

Upgraded!

I think the best way to deal with the carry-on epidemic would be to make the second checked bag free. Those who have to check one bag anyways will no longer feel the need to squeeze everything into a carry-on in order to avoid charges for the second bag.

If AA did decide to go ahead with charging for carry-on luggage I think that in addition to free carry-ons for F/J/AA elite/OW elite/AP/full-fare they should "include" carry-ons with a number of other extras, such as purchasing premium seats, or buying AC day passes (AC members should also be exempt; though I doubt there are too many AC members who don't also fit one of the above-noted categories) because it'll encourage more people to purchase extras that they'd otherwise not. Maybe you wouldn't buy a premium Y seat but then when you see that you'll be exempted from carry-on charges all of a sudden you think "hey, this is a good deal".

elitetraveler

Totally hard to say how it will play out. My only point is that the success of fees has made the non-elite traveling on a discounted coach ticket a much more valuable commodity. And the more fees they can charge the person, the more valuable at least for that single flight.

TTnC4me

Then they should raise the ticket rate!!! The only reason that carry on has increased is because of the ridicuulous checked baggae rate!! Think about it. Carry ons were near the problem years past when the checked bags were free. Nickel and diming are NOT the answer. It's absolutely ridiculous. Seriously, just raise the ticket price and be done with all these petty, crappy fees.

Upgraded!

I think that this oversimplifies the situation a little because it fails to account for the times that those elites will pay more for AA because they are elite (and need to requalify/want benefits/etc.). ScienceGoy is a perfect example of this.

AA may still make more money from an elite on a $200 fare than a non-elite on a $200 fare with $50 in extras purchased because of how elite status influences other purchases. For example, two weeks later, the same two travelers have to fly again and UA is offering a $200 fare while AA is offering a $350 fare. The AA elite purchases the AA ticket because of loyalty to AA while the non-elite goes with UA because it is cheaper. It's as though the elite traveler paid a $150 "extra fee" to have their seat be on AA which is a lot more than the non-elite paid the first time in extra fees.

While I have no idea if the extra money elites push to AA when they have cheaper options elsewhere is more or less than $62 million I know it's greater than zero.

Dieuwer

Another idea: Rip out the overhead bins, thus reduce weight and save fuel. Regarding the carry-ons: only those small bags that fit under the seat in front of you can come aboard. Everything else must be checked.