FWAAA

Definitely a jab at Smisek. Foolish Smisek thought he could turn the screws to his frequent fliers long before he actually combined the airlines. Delta, on the other hand, was already firing on all cylinders when Anderson went to a revenue-based system.

sdsearch

Actually, at least one (maybe both?) of the so-called revenue-based legacy airlines stlll use mileage-flown-based miles plus elite qualifying dollars (rather than the revenue-based way of earning miles) for elite. So if even they haven't gotten rid of miles-based elite (just added a second requirement), I don't see it going away so soon.

Keep in mind that (at other legacies) the elite-qualifying dollars component got added first, well before revenue-based miles earning (for redeemable miles) got added.

Meanwhile, AA is in a funny situation, because it already has a way to qualify based more on spend (on EQPs rather than EQMs), so one simple way they could change elite qualification would be to keep EQPs but get rid of EQMs. (For many years, challenge-based qualificaiton has already been EQP only.)

So I think elite qualification and award earning are two fairly separate things, and it's not productive to treat them as tied together too much.

dave_261

Changing a FF program to negatively impact a large % of travelers really doesn't qualify as 'innovative'.

But... AA's spin machine is working overtime this week. This quote made the rounds in regards to the recent first-class meal 'consistency'... ‘‘We looked at what the customers wanted, and found a good number of customers didn’t want a full meal on a flight less than 2 hours,’’ Norton said in an interview.

This very well could be true, but most companies don't build programs based on the wishes of the minority unless it's very, very good for the company.

relangford

IMHO, I would do away with qualifying miles and just go with qualifying points as in the existing AAdvantage system (some fares get 0, some 0.5, some 1.0, and some 1.5 multipliers - and maybe the multipliers could be changed a little, e.g., like 2.0 for full-fare F); this is easy to do (already being tracked) and isn't totally revenue-specific. This would separate AA from DL and UA.

Still good to hear that no changes for a while in 2015.

linglingfool

I agree; I think there's a middle ground that UA and DL have seemed to eschew.

Dave Noble

Why even do that? why not just tie earnings directly to amount spent rather than distance travelled ?

arthrod

If the companies are offering the same as Spirit and Southwest, why anyone will keep buying UA, AA or DL tickets? They used to be different because they offered a better product with an illusion that you could get free tickets in the future. If they aren't anymore, why a consumer will prefer paying more for the same stuff?

jb1012xna

Buying cheap tickets doesn't make someone automatically valuable to an airline. It's like only buying a loss-leader in a retailer. Yes, you are spending money, but if the company isn't making any money after providing the item/service, then the value to it is relatively low. The strategy is to get you to spend more money on additional items/service. If that doesn't happen, then they shouldn't care than you bought the loss-leader and nothing else.

diver858

AA will win over elites from DL and UA by refraining from a revenue-based system for at least a few years, there are benefits of not doing so.

1. Airline seats are a perishable item. The actual cost for seats that would likely go empty is relatively low, still much less than it is sold for, extra revenue contributes directly to the bottom line.
2. Revenue management has a pretty good idea of the percentage of heavily discounted, nonrefundable tickets sold far in advance that will never be used, or changed to more expensive ticket.
3. An elite passenger will not always have the luxury of finding a heavily discounted, nonrefundable ticket for all of their travel, loyalty will win their more profitable business - often regardless of the price, or on a connecting flight when the competition is direct.

DHAST

You're forgetting that economy fares aren't really loss leaders though. The marginal cost of carrying an extra butt in seat is quite low. And someone paying CASM for their ticket isn't profitable either, because planes aren't flying 100% full.

Yes, you can't fill a whole plane with discount economy and expect to make money. But neither can you fill the plane at full fare because the demand just isn't there.

This is an interesting business because fixed costs are so high and marginal costs are so low.

smilinganddialing

And the idea that a first class or business class seat is "more profitable" just because it's more expensive is insane. There are tons of additional costs associated with such seats:

- Take up way more space on the plane
- Free baggage allowance (= fuel)
- Catering costs + weight
- Higher mileage rewarded
- Other perks, many of which have incremental cost.

I've said this before and I'll say it again. There are lots of profitable all economy airlines in the world. There has never been a single profitable business-class only or first-class only airline. Economy passengers can be highly profitable.

xliioper

The part you are missing is that most pax don't think like FT'ers. FF miles are just one consideration to them and it is often far secondary to things like familiarity, price, reliability, and convenience. The notion that there will be mass defections of economy fliers from DL and UA is just wishful thinking. They will probably lose a few customers, but not nearly as many as most here assume.

rodsren

I was LOL when you talked about many not having service beyond Aeroflot! LOL LOL LOL...so funny. I took American's new Prem. Trans-con last week, it was nice, but I mean 4K for a 2,500-mile seat. And I certainly have not seen many stars on AA's Premium Trans-Con lately. The purser was bragging abut the $ they are making. I told him that as an EXEC. PLAT. I found all the rule changes on 4.8 deplorable, and striping away at our benefits. The lady flight attendant, who said she knows a lot of EXP's, said she had been hearing the same thing. Needing to be Concierge Key to talk to RDU reservations center, where the avg. tenure is close to 10 years, not 10 months, just is NOT acceptable.

But I divert, this sounds like an excellent product and you review was very humorous. However, since I live in Miami, I rarely take this route anymore, and remember the days of the DC-10's on American and caviar, lobster tail salads and chateaubriand, slicked to order. Those were true premium trans-con days.


An "innovation"? I am still getting used to the "innovations" that happened on 4.8.14, the plethora of rules changes (such as inability to request RDU reservations without a name for EXP - but only EXP-not Concierge Key Level members.) Rare is the day now that we get to actually speak to someone with over a 12 month EXP tenure on the desk (which means DFW southern reservations office of EXP.) And these people are literally, on the whole, idiots. Really, I actually hang up when they can't even annunciate their name clearly. I figure I am better off hanging up then actually getting them to tough any of my reservations. It's really pathetic, and is in essence, with all the "streamlining", that's the "innovations" buzzword equivalent that the Public Relations people have embedded in the EXP. line staff members. READ: No to revenue yield consideration of an award ticket even if the flight is fully empty. No to N.American stopovers on their equipment in a high value 3 class first class stopover, previously stated as a "necessary" addition (no stopovers in international destinations due to one way awards, now no stopovers period.) This is just a hit list of top offenders. There are many, many more tings that we used to take for granted that is absolutely a non-starter. I was actually shocked when I got a RDU reservations agent and she booked a 777 F seat for me (in Z class) when my flight was changed from a 777 to a 737 2 class and I mentioned it was apples and oranges, the connecting Qantas service from Miami

Any others out there thinking their EXP. membership is being devalued?

luckypierre

FWIW, I would like to pay Mr Parker a small compliment...from my observations, perhaps the most headstrong of the legacy managers, he has adopted a cautious attitude on many of these merger issues. I do believe the remark about foolishness has a particular target in mind...United implementing all these "changes you will like" without having their house in order is the height of foolishness.

sbagdon

Yup, can confirm that one. : )