eamus

I am interested to know if anyone else has had a similar experience to me, and what it means to AA. I received one of those targeted emails "fly 8 full fare segement before X date and you will get 50K bonus miles." Given recent business travel levels I thought I was a shoo-in, but within a couple of days of the email, the new fare structure came out. Now all my fares seem to be pricing out as K fares. My company usually demands we fly on refundable, changeable economy tix (Y) but since mine were coming out as cheaper K fares, I took a peek at the fare rules for one fare.

The key terms I saw were that it was indeed refundable, and change w/out penalty was OK, but only as long as the same inventory was available. Obviously our corporate TA either doesn't recognize or doesn't care that that makes the ticket considerably less flexible than a Y ticket; all they are doing is booking the lowest fare that (apparently) fits the company requirements. The less important consequence to me is that I will almost certainly not hit the 8 full fare requirement; more importantly, I wonder if AA understands that the newly flexible tickets structure may inadvertently mean they are selling K tickets to people who would otherwise be buying Y tickets? The difference in fares comes out $300-$450 per round trip, which are happening weekly right now. Annualized and multiplied by an unknown number of similar travelers, that could be quite a chunk of revenue forgone for no benefit. Perhaps they should broadcast to the industry that the new definition of "changeable" is not the same as Y-changeable.

jeanie

I've booked K fares like that before. Usually on short routes like DFW/LIT or DFW/AUS or something.

AA definitely knew what it was doing when it did this. They don't have to give you the Y upgrade to first, the extra bonus miles associated with the Y fare, or count those segments toward your bonus offer.

Since the fare is cheaper, then they are cutting back on the benefits.

Or the customer has the choice of still paying full fare Y and getting the benefits.

This was planned.

Dave Noble

I dont see how it is any different to Y fares in comparison to rules. All changes require that there be inventory available in order to make the change, even for Y, just that Y will be the last to go.

If you need to change to a flight where only Y is available, then since it is a refundable ticket and changeable ticket, you can assumedly upgrade the ticket to a Y fare if you do need to change to a flight with no K availability

I cannot see how this would not fit your company requirements; the fare can be refunded and changed without penalty and if needed, the fare difference can be paid to get on a busy flight

Dave

venk

Yes, planned but not by AA but DL!

AA would much rather try to sell you Y fares. While a few people were buying these, it was also driving traffic away to LCCs, booking non-refundable cheaper fares (you still come out ahead if you don't cancel often) or reducing travel. But airlines were (in futility in my opinion) were trying to pile on "perks" to make those ridiculous fares palatable. DL figured out it was better for them to get higher volumes at lower (not LCC) unrestricted fares than wait for the dying breed of full-fare flyers. AA was forced to follow and of course they cannot treat the H and K fares with the same perks they had stuffed the Y fares with.

This is going to affect you as you have described but as I pointed out in another thread, it will also significantly affect who depended on >1 points for unrestricted fares earlier to make EXP with much less than 100 BIS miles. At least until they can convince their company to spring for the cheaper FC fares.

ElmhurstNick

I've been dealing with this on one of my routes (ORD-IND) for about a year competing against Southwest. The fully refundable but capacity controlled (W) walk-up fare has generally been $139, with a walk-up non-refundable fare at $79 or $99 each way and an advance purchase fare at $49 or $69 each way. Now, probably because it's low season, the W fare is down to $99 each way. Meanwhile, Southwest has their their walk-up Y fare between $69-$89 all year long.

The Y fare on AA, however, is $428 each way, although to be fair it's a YUP fare.

So when I need to take the last flight home when there's an RJ, I often end up having to book Southwest as the W inventory is gone even 14 days out (with people that will standby for the earlier), then check that afternoon and see if any W inventory opened up.

eamus

Dave, I think you missed my point. Yes, I agree that the K fare does fit company requirements, but only since AA changed its fare structure. Prior to that change, really only Y fit the requirements. My point was that it seemed odd to me that AA would (re)structure its fares so that people whose companies (like mine) require them to travel on changeable and refundable tickets could do so at a lower cost than they did previously. My thought was that if I were AA and looking at badly thought-through corporate requirements that mean travellers only buy full fare tickets, why on Earth would I stop them??? It's not like the company changed its mind about what was a reasonable price, it was AA who said "I know you do this 1,500 mile round trip and happily fork over $1350 each time, and I know you didn't ask us to drop that price, but now I am only going charge you $950. No need for you to do anything for me in return. Just give me less money."

I hadn't really considered the perks referred to in other posts, but even then, the upgrade to first is only for elites, who constitute a portion of the flyers out there. The extra miles issue is seemingly easily handled by all airlines by the raft of devaluation techniques discussed ad infinitum on these boards. And if they were really concerned about extra miles, they'd hardly be offering me 50K more as an incentive to fly on full fare tickets (which of course also lock them into the upg to first if available).

Efrem

Part of it, IMHO, is the growing credibility of low-cost carriers.

When they were a new idea and somewhat untested, most companies let you avoid them.

Now, more and more are insisting that JetBlue, Southwest and so on be used, within reason schedule-wise, when it saves money. Since corporate bean-counters are notoriously unsympathetic to our desire to earn airline status or fly in F by spending more of the stockholders' money than necessary, many business travelers are now using LCCs. Some don't even mind.

So, AA is leaving money on the table in eamus's case, but it presumably hopes to pick some up by getting travelers who would otherwise choose an LCC. If they get two business pax at $950 versus one at $1,350 and an empty seat, they come out ahead. They're still ahead if it's a business passenger at $950 and a vacationer at $450.

Is this, on balance, a wise move on AA's part? Time will tell. Meanwhile, it would make an interesting MBA case.