AA award flight cancelled due to schedule change
#196
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Join Date: Nov 2005
Posts: 789
I would suggest that inferring legal or equitable Property rights based solely on accounting requirements is a risky strategy.
I think it salient and germane to observe that this discussion is more general to the nature of Frequent Flyer programs in the US and has no direct specificity to American Airlines or it's component parts.
I think it salient and germane to observe that this discussion is more general to the nature of Frequent Flyer programs in the US and has no direct specificity to American Airlines or it's component parts.
Last edited by flyertalker54234; Mar 8, 2014 at 12:47 pm Reason: Clarification for moderators
#198
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Join Date: Jul 2003
Posts: 4,861
Interestingly:
Delta Airlines and United changed their accounting method right after emerging from Chapter 11 (during their fresh start accounting window), to the deferred revenue method. That immediately and vastly increased their balance sheet liabilities but also gave them much greater future revenue recognition opportunities when award credits are redeemed. Other airlines have expressed interest in changing, also, but have not done so because of a lack of precedent.
Once an airline chooses to switch to the Deferred Revenue Method, the accounting method itself likely drives management decisions about the FFP’s operation. Use of the Deferred Revenue Method primarily incentivizes management to make more award seats available relative to the Incremental Cost Method—a decision that would please passengers and could generate loyalty, although at the expense of potentially displacing fare-paying passengers. When award passengers travel using mileage credits, it has the effect of not only reducing the airline’s FFP liability, but also allowing the airline to recognize revenue approximately commensurate with the amount a fare-paying passenger would have paid....
Last edited by Austinrunner; Mar 8, 2014 at 1:21 pm
#199
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Join Date: Jul 2003
Posts: 4,861
Google "ACCOUNTING FOR AIRLINE FREQUENT FLYER PROGRAMS: MANAGEMENT INCENTIVES AND FINANCIAL REPORTING IMPACTS" for more information about this subject.
#200
Join Date: Jan 2001
Location: Bellevue, WA - AA EXP 3MM
Posts: 2,756
Several messages in this thread asked for details of the authority on which complainants might reasonably rely. It seems that one Darren Martin has proceeded to file a formal DOT complaint. It is publicly-docketed on Regulations.gov and available for review by the interested public. It is also available for public comment via the Regulations.gov comment function. For example, if you had a similar experience, you could submit an appropriate comment there.
#201
Join Date: Jan 2001
Location: Bellevue, WA - AA EXP 3MM
Posts: 2,756
Regulations.gov today posted the formal complaint of Robert Samstein (by all indications, robbiesam, the original poster of this thread) as to his experience with AA on the matters discussed in this thread.
This document is available for review by the interested public, including for public comment via the Regulations.gov comment function.
This document is available for review by the interested public, including for public comment via the Regulations.gov comment function.
#202
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Join Date: Mar 2001
Location: FIND ME ON TWITTER FOR THE LATEST
Posts: 27,730
Regulations.gov today posted the formal complaint of Robert Samstein (by all indications, robbiesam, the original poster of this thread) as to his experience with AA on the matters discussed in this thread.
This document is available for review by the interested public, including for public comment via the Regulations.gov comment function.
This document is available for review by the interested public, including for public comment via the Regulations.gov comment function.
#203
Join Date: Jan 2001
Location: Bellevue, WA - AA EXP 3MM
Posts: 2,756
I suspect DOT would find your comment more persuasive if you offered the reasoning that supports your conclusion. Based on your knowledge and sophistication on all things AA, I know I'd be interested too.
I thought Mr. Samstein offered several persuasive authorities including AA's General Tariff, Schedule Change web page, and commitments pursuant to the JBA. Did you read the authorities on which Mr. Samstein relies? Do you think he misinterpreted those authorities? Misapplied them to his facts? Makes some other error? He does quote them and analyze them at length. I don't think his complaint can be easily dismissed. You can disagree with the end result he seeks (reacconmodation on a BA nonstop at no additional charge). But if the governing legal documents entitle him to that, who are we to say he shouldn't get it?
A few days ago I filed comments on Mr. Martin's complaint, connecting his experience to the allegations I had previously reported to DOT and to the experiences I've heard from others (including quite a few people who came to FT seeking help with these problems).
#204
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Join Date: Mar 2001
Location: FIND ME ON TWITTER FOR THE LATEST
Posts: 27,730
AAdvantage is a very generous FF program, with lots of weak spots and lots of strong points. No one is forced to accumulate AAdv miles nor are they usable in every conceivable way we'd like them to be-- far from it.
I haven't the slightest doubt that your take on things has legal validity and weight. As a non-lawyer and a user of AAdvantage miles, I, personally, find the whole thing patently idiotic and just a total waste of time.
I'd like to see DOT dealing with other matters.
YMMV!
#205
FlyerTalk Evangelist
Join Date: Mar 1999
Posts: 12,097
This is absolutely true, but AA cannot deceive the customers who chose to accumulate AAdv miles on the basis of the information AA gave him/her. I think this an area that the DOT has unfortunately been distracted from enforcing; ensuring that there's integrity in the offerings is a more than worthwhile pursuit.
I would be very happy for the DOT to work on this area. Remember when airlines were able to ask additional money at the check-in counter because they determined that the ticket you held was issued incorrectly (by them!) and you either paid more or didn't fly?
As you said, YMDV.
#206
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Join Date: Jul 2003
Posts: 4,861
Regulations.gov today posted the formal complaint of Robert Samstein (by all indications, robbiesam, the original poster of this thread) as to his experience with AA on the matters discussed in this thread..
#207
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Join Date: Jul 2003
Posts: 4,861
AA cannot promise benefits during one's retirement and change its mind later.