UA just went rev based for miles in 03/2015, will AA soon follow??
They are making record profits - 3 years in a row.
Jun 10, 2014, 7:44 pm
#92
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True BTW
Jun 10, 2014, 8:39 pm
#93
Join Date: Feb 2014
Location: South Florida
Programs: DL GM, SPG GOLD, UA DIRT, AA PLAT, US (RIP), Hilton HHonors
Posts: 705
AA has a lot of business to be gained by mid level elites like myself... I will be waiting a year to see what happens with AA, and if they don't go to revenue based, this DL GM is headed to AA... BUT if all programs are equal I'm staying with DAL
Jun 10, 2014, 8:41 pm
#94
Join Date: Feb 2014
Location: South Florida
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Posts: 705
Jun 10, 2014, 8:43 pm
#95
Suspended
Join Date: Dec 2005
Posts: 9,916
Jun 10, 2014, 8:55 pm
#97
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Location: Atlanta, GA, USA
Programs: Frontier Gold, DL estranged 1MMer, Spirit VIP, CO/NW/UA/AA once gold/plat/comped gold now dust.
Posts: 38,151
I haven't yet read a good explanation of how the UA or DL moves will add any significant business for them. Business travel works on tight parameters, usually favoring non-stop flights, close-in airports, convenient schedules, etc. Many people are also hub captives. How many biz travelers are really out there with a true choice of carriers? And you can bet that companies will continue to try to hold business travel to a minimum.
Also, if AA thought it was losing business travelers because others paid out more RDMs, wouldn't it be easy to just readjust the class-of-service bonuses to effectively match or exceed? You could also do that on certain fare classes even on short haul. DL's "real" problems, from the passenger perspective, were really only two: a) short-haulers saying they were under-rewarded, and b) people on expensive tickets complaining about losing out on upgrades to low-rev people. The rest was only about a revenue grab, i.e. not wanting to provide as much in total benefits as before (It's NOT a zero-sum game!)
The biggest reason for AA to follow suit would be as a revenue grab similarly, made possible by the oligopoly. U.S. airlines would be treating flyers like single-hub dominant European airlines have been treating theirs.
The biggest reason NOT to is that UA and DL will run off their low-rev, mostly leisure flyers who, unlike biz travelers, do have more choice and flexibility, including whether or not to take a trip at all. Yes, they're price sensitive, but the sales and low-tier awards are both yield managed, so if they get a seat there's a good chance it would have gone unsold. The mistake DL and UA are making is to try to align revenue with clout, when in fact those with the most choice have clout well in excess of the revenue. DL and UA will have to relearn that.
We still don't really know how it will turn out. I predict a noticeable dropoff in the first 2 weeks this December as year-end mile runs will be moot with DL and UA. Bookings for January for DL and March for UA won't show any clarity on biz travel until late, though around October or so we might see signs of leisure runoff. OTOH, most of January is usually very slow anyway. If AA stays non-committal it could see just how much added business it gets.
This is one of those things where the lesson will only stick if it comes with the lumps. It's obviously been kicking around the board rooms and Wall Street for years, and it'll demand that those who don't like it vote with their feet. I've switched programs 6 times before over negative changes and will be doing so one way or another this time as well.
Also, if AA thought it was losing business travelers because others paid out more RDMs, wouldn't it be easy to just readjust the class-of-service bonuses to effectively match or exceed? You could also do that on certain fare classes even on short haul. DL's "real" problems, from the passenger perspective, were really only two: a) short-haulers saying they were under-rewarded, and b) people on expensive tickets complaining about losing out on upgrades to low-rev people. The rest was only about a revenue grab, i.e. not wanting to provide as much in total benefits as before (It's NOT a zero-sum game!)
The biggest reason for AA to follow suit would be as a revenue grab similarly, made possible by the oligopoly. U.S. airlines would be treating flyers like single-hub dominant European airlines have been treating theirs.
The biggest reason NOT to is that UA and DL will run off their low-rev, mostly leisure flyers who, unlike biz travelers, do have more choice and flexibility, including whether or not to take a trip at all. Yes, they're price sensitive, but the sales and low-tier awards are both yield managed, so if they get a seat there's a good chance it would have gone unsold. The mistake DL and UA are making is to try to align revenue with clout, when in fact those with the most choice have clout well in excess of the revenue. DL and UA will have to relearn that.
We still don't really know how it will turn out. I predict a noticeable dropoff in the first 2 weeks this December as year-end mile runs will be moot with DL and UA. Bookings for January for DL and March for UA won't show any clarity on biz travel until late, though around October or so we might see signs of leisure runoff. OTOH, most of January is usually very slow anyway. If AA stays non-committal it could see just how much added business it gets.
This is one of those things where the lesson will only stick if it comes with the lumps. It's obviously been kicking around the board rooms and Wall Street for years, and it'll demand that those who don't like it vote with their feet. I've switched programs 6 times before over negative changes and will be doing so one way or another this time as well.
Jun 10, 2014, 9:12 pm
#98
Join Date: Feb 2004
Location: San Jose, CA, USA
Posts: 546
If I were AA I'd incentivize higher value fliers by elevating CK to the same standing as GS customers have over at UA and maybe adding another tier at, say, 150K or 200K EQP. Keep the system as is for others, but throw some additional bones to the 150K/200K+ and CK fliers. AA doesn't do a whole lot more for a 100K+ CK than it does for a 5K EXP...
Jun 10, 2014, 9:48 pm
#99
Join Date: Jul 2011
Posts: 2,314
The BAD news is Doug has a DUI, so I'm not sure he learned much about driving. (And that's for the time he got CAUGHT). So personally, I do not place much confidence Dougie to keep AA from copying UA and the race to the bottom.
Jun 10, 2014, 10:12 pm
#100
Join Date: Dec 2006
Location: ORD
Programs: AA EXP,2MM, DL Gold,Starwood PLT
Posts: 3,876
I'd plan on staying with DL then. AA is just delayed getting the integration of their programs done is the only reason there is a delay. If it's an issue you're traveling on lower fares they can easily replace.
Jun 10, 2014, 10:15 pm
#101
Join Date: May 2007
Posts: 523
It's going to be great! Kill those mileage runners 
I spend about $800 a week, so I'm happy!
I spend about $800 a week, so I'm happy!
Jun 10, 2014, 10:24 pm
#102
FlyerTalk Evangelist
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At AA status is already based on fare class since EQPs earn bonuses for high fares making earning status faster than doing it by EQMs. Not to mention the new UA system doesn't change the way elite status is earned, just how many RDMs one gets.
Jun 10, 2014, 10:39 pm
#103
Join Date: Jan 2005
Programs: BA Gold, AA Lifetime Gold 1.8mm, IC Spire Ambassador, Hilton Diamond, SPG Gold et al
Posts: 4,350
I wouldn't describe BA's elite qualification process as entirely mileage based as it strongly favours high spenders over discount Y travelers. I'd be happy for AA to go down a similar route.
Jun 10, 2014, 10:49 pm
#104
Join Date: Jun 2011
Posts: 3,528
I keep waiting for one of these airlines to flat out announce "we're done with RDM - you want status, great, but no more earning RDM after 12 months from today, and no more redeeming after 24 months from today."
But I guess the banks are too good of a set of customers to stop that gravy train.
But I guess the banks are too good of a set of customers to stop that gravy train.
Jun 10, 2014, 11:36 pm
#105
Join Date: Aug 2013
Location: LAS HNL
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Posts: 4,479
I do not agree and either does this:
J.D. Power 2014 North America Airline Satisfaction Study
Alaska Airlines ranks highest in the traditional carrier segment for a seventh consecutive year, with an index score of 737, which is a 20-point improvement from 2013. The carrier performs well in all seven factors of the study.
Delta Air Lines ranks second with a score of 693, improving by 11 points from 2013, with significant gains in four of the seven factors. American Airlines/American Eagle improves 24 points to 684 in 2014 and moves to the third rank position from fourth in 2013.
All carriers in the traditional segment improve by at least 11 points year over year, with US Airways improving the most (+26 points).
Alaska Airlines ranks highest in the traditional carrier segment for a seventh consecutive year, with an index score of 737, which is a 20-point improvement from 2013. The carrier performs well in all seven factors of the study.
Delta Air Lines ranks second with a score of 693, improving by 11 points from 2013, with significant gains in four of the seven factors. American Airlines/American Eagle improves 24 points to 684 in 2014 and moves to the third rank position from fourth in 2013.
All carriers in the traditional segment improve by at least 11 points year over year, with US Airways improving the most (+26 points).