Will AA eliminate ALL elite bonus miles like US Airways did today?
Jun 13, 2008, 11:20 am
#46
Join Date: Oct 2003
Posts: 2,092
I think many here are overstating the value and importance of elites. While they may the the "best customers" based on the miles they fly, they are not necessarily the best customers based on the income they bring in. My guess is that many who purchase the tickets AA wants us to purchase (i.e. full fare) are not that concerned with bonus miles or even elite status.
The other thing is will an airline lose money by eliminating its elites? I'm not totally convinced they will, if they lower capacity enough. If there is the correct supply, then they will sell tickets at what they want. Sure, an elite may spend $100 more to fly AA over DL on a trip to NYC to qualify for status. But if there is correct supply (or a mild shortage) then that $100 will be paid by somebody else who has to get to NYC who doesn't have status. If they can get supply right, I'm convinced there may be no need for FF programs.
The other thing is will an airline lose money by eliminating its elites? I'm not totally convinced they will, if they lower capacity enough. If there is the correct supply, then they will sell tickets at what they want. Sure, an elite may spend $100 more to fly AA over DL on a trip to NYC to qualify for status. But if there is correct supply (or a mild shortage) then that $100 will be paid by somebody else who has to get to NYC who doesn't have status. If they can get supply right, I'm convinced there may be no need for FF programs.
Jun 13, 2008, 11:23 am
#47
Join Date: Jan 2008
Posts: 469
I think many here are overstating the value and importance of elites. While they may the the "best customers" based on the miles they fly, they are not necessarily the best customers based on the income they bring in. My guess is that many who purchase the tickets AA wants us to purchase (i.e. full fare) are not that concerned with bonus miles or even elite status.
Jun 13, 2008, 11:28 am
#48
Join Date: Aug 2007
Programs: AA EXP, HH Gold, SPG Gold, Marriott Gold
Posts: 3,017
Jun 13, 2008, 11:30 am
#49
Join Date: Oct 2003
Posts: 2,092
Jun 13, 2008, 11:37 am
#50
Join Date: Apr 2003
Location: SEA, NW/DL 1.6Million Miler
Programs: DL 1MM Annual Silver,AS 100K 22-24, AS 75K 15-21
Posts: 4,278
If removing bonus miles stems from the obvious financial issues, then I can see a few ways to produce the same result:
1) remove the bonus miles (affects only elites)
2) increase the mileage requirements for redemption (affects everyone)
3) decrease redemption availability (affects everyone)
Seems as though #2 and #3 would be sufficient. AA has recently decided to implement #2, and it sure seems as though #3 is in effect (IME it's harder than before to score a 90k business AAward).
1) remove the bonus miles (affects only elites)
2) increase the mileage requirements for redemption (affects everyone)
3) decrease redemption availability (affects everyone)
Seems as though #2 and #3 would be sufficient. AA has recently decided to implement #2, and it sure seems as though #3 is in effect (IME it's harder than before to score a 90k business AAward).
Jiburi
Jun 13, 2008, 1:28 pm
#52
Join Date: Oct 1999
Location: Third planet from the Sun
Posts: 7,022
I think many here are overstating the value and importance of elites. While they may the the "best customers" based on the miles they fly, they are not necessarily the best customers based on the income they bring in. My guess is that many who purchase the tickets AA wants us to purchase (i.e. full fare) are not that concerned with bonus miles or even elite status.
The other thing is will an airline lose money by eliminating its elites? I'm not totally convinced they will, if they lower capacity enough. If there is the correct supply, then they will sell tickets at what they want. Sure, an elite may spend $100 more to fly AA over DL on a trip to NYC to qualify for status. But if there is correct supply (or a mild shortage) then that $100 will be paid by somebody else who has to get to NYC who doesn't have status. If they can get supply right, I'm convinced there may be no need for FF programs.
The other thing is will an airline lose money by eliminating its elites? I'm not totally convinced they will, if they lower capacity enough. If there is the correct supply, then they will sell tickets at what they want. Sure, an elite may spend $100 more to fly AA over DL on a trip to NYC to qualify for status. But if there is correct supply (or a mild shortage) then that $100 will be paid by somebody else who has to get to NYC who doesn't have status. If they can get supply right, I'm convinced there may be no need for FF programs.
If you raise fares to much, two things will happen:
1)Fewer and fewer people will fly--starting a downward spiral.
2)At a certain point, discount airlines will start to compete and bring down fares.
Jun 13, 2008, 1:47 pm
#53
Join Date: Aug 2005
Location: MCO - Where's the Admirals Club?
Programs: AA Plat, HH Gold, MR Gold
Posts: 1,268
You're right. But at the same time, that may be only b/c they can't manage to charge enough on revenue tickets. If revenue ticket prices were higher and the flights themselves more profitable, perhaps the FF programs wouldn't be the most profitable parts of airlines. But what do I know?
Jun 13, 2008, 2:51 pm
#54
Join Date: Jan 2005
Location: New York
Programs: AA EXP - 2MM, NYC-MetroCard,
Posts: 207
Airlines globally made roughly $7,500,000,000.00 in net profits off their frequent flier mileage programs in 2006. Do you really think the airlines can raise fares enough to make up for this difference?
If you raise fares to much, two things will happen:
1)Fewer and fewer people will fly--starting a downward spiral.
2)At a certain point, discount airlines will start to compete and bring down fares.
If you raise fares to much, two things will happen:
1)Fewer and fewer people will fly--starting a downward spiral.
2)At a certain point, discount airlines will start to compete and bring down fares.
Jun 13, 2008, 3:00 pm
#55
Join Date: Jul 2003
Location: DFW
Programs: PLAT -- 2.7Million
Posts: 2,051
Jun 13, 2008, 6:21 pm
#56
Join Date: Oct 2001
Location: Somewhere...
Programs: AA PLT/3MM, UA GM/1MM, DL DM/1MM, FB Plat, AS MVP Gold, WN AList+
Posts: 1,588
IMHO US is attempting to turn itself into sort-of a WN/B6 hybrid. As I have speculated on the US board, I think they are looking to what EI did to their program as they were ditching OW for inspiration on what they want to do - and they feel their customers in the future were going to be.
Essentially US is gutting their elite program since they really don't feel that this is their important customer base.
The good news in the equation is that AA is not (at least yet) looking to EI for inspiration on the way to go.
Essentially US is gutting their elite program since they really don't feel that this is their important customer base.
The good news in the equation is that AA is not (at least yet) looking to EI for inspiration on the way to go.
Jun 13, 2008, 11:35 pm
#57
Join Date: Sep 2003
Location: Austin TX USA
Programs: UA life 1K, 2MM; AA Life Pt 3mm; DL nada now!; AS nada now; BA, FD, CX, LH, DD, Amex Pt, Diners
Posts: 950
There is always WN
.. yes - all these things can be taken away - and what is left? Southwest. Their schedules from TX to the West Coast are beginning to look really good these days. Some nice late flights and fast too. The problem with shooing away your best customers is that they never come back. Never. There is nothing worse than a former good customer who feels they got shafted. DL did this to me when they pulled the Crown Room in PDX from where I was flying all the time - and didn't even offer a partial refund or some gracious offer. They have been toast as far as I am concerned ever since.
Jun 14, 2008, 11:58 am
#58
Join Date: Feb 2007
Location: Chicago, IL
Programs: Marriott Platinum Premier, AAdvantage Platinum (1MM Lifetime Gold), Avis First
Posts: 524
AA cuts seem to be geared to the travelers that shop for the cheapest tickets with no alliance any airline, they have treid to keep these increase away from elites. I don't think AA will follow....
Jun 14, 2008, 11:49 pm
#59
Join Date: Mar 2007
Location: SBA
Programs: AA PLT, SPG PLT, Hyatt Diamond
Posts: 256
I would definitely fly AA a lot less. Just enough to make gold. I regularly pay more for flights just to get the elite bonus. JAL would become my go-to for Transpac--sitting in the JAL lounge right now on my way to Bali, in fact. <award ticket> Boy this keyboard is tough!
Jun 15, 2008, 11:18 am
#60
Join Date: Sep 2005
Location: San Francisco area
Programs: AA EXP, Marriott T
Posts: 455
No because AA has plans to be a viable airlines after dust settles on oil. US will floundering in a no mans land, LCC wanabe stuck with HCC cost.