You can't possibly be serious, but if you are, yea, let us know how that works out for ya'

Regards

So, if AA introduces minimum spend requirement, do you think that would mean only tickets on AA stock or would that include BA stock? Aren't they supposedly sharing TATL travel revenue anyway or something like that? What do you guys think?

I did, and they seem stumped over there by the brilliance of my question, I don't think they were expecting such forward thinking...:p

It may just be me but the concept of changing the rules to a program is a double cross.

If you want to investigate a model for AA look at how Delta (or UA) does qualified spend with partner airlines.

http://www.delta.com/content/www/en_.../airlines.html

I'll bet that AA's version ends up looking nothing like that.

Yea, that sucks, even your best partner's biz tickets get only 25-35% qualifying dollars, slightly better than nothing though.

You mean there WILL be an AA version? :eek:

I'm not sure how that sucks. The column is a percentage of miles flown, not dollars spent (since it only applies to tickets that don't involve Delta for which Delta doesn't know how much you spent). For business, yes, 40% of miles flown (the VS rate) does work out to be less than the dollars spent, but it's considerably more than 25-35% in most cases, I think. For coach and premium economy, their scale actually matches the dollars spent reasonably well for the test searches I've done; in fact, the 10% MQDs for economy on many Group 1 partners is often considerably more than the airfare.

In other words, Delta's MQD on partners works out to be fairly similar to AA's EQP system (especially if the bonuses that are in place this year for premium cabins become permanent), just more graduated.

Ok, I see, I thought it was 25-35% on fare paid (on AF, that I checked), if it is % of miles flown it may work fine on long haul cheap biz tickets, and actually even higher than actual dollars paid.

Yeah. With this modification, the spend requirement is dramatically less onerous to the point of hardly having an effect (except for those qualifying with rollover miles, not a consideration for AA). In Skymiles, you need 0.12 MQDs/MQM (3,000 MQDs and 25k MQMs for Silver; same ratio for higher tiers). The cheapest fares on most partners get 0.10 MQDs/MQM, so with even a handful of fares that earn more or with exceeding the MQM requirement by a bit, MQDs have no impact for partner flights. (A few fares on a few partners get 0.05 MQDs/MQM.)

My major objection to spend requirements as originally implemented by DL and UA was that partner marketed and ticketed flights didn't count towards the spend requirement. This tweak offering MQDs as a fraction of miles flown on partner tickets eliminates that concern.

At the very least, if AA does go to a spend requirement, I'm glad they've let DL and UA beta test the model on their customers first (whether or not that had anything to do with AA's motivation for waiting); presumably, AA will learn these lessons. But again, the DL model on partner-ticketed flights is effectively a fairly minor tweak on AA's current EQP system, just modified to be considerably more difficult to understand.

I wonder if AA will go to EQMs or segments+spend requirement or EQPs without a spend requirement?

The other concern is how high a spend requirement might be for EXP. United has $12k/year, I believe, and no cc spend waiver for their highest tier. This will be very undesirable.

I think the best case scenario would be a simple removal of the EQM requirement and make everyone qualify on EQP. Alternatively, I could also see requiring one to hit both EQM and EQP at the current levels to attain status. That would make sense as well.

In terms of RDM earning. That should be left alone. That only costs the airline fake money, and is a decent way of retaining customers. Just look at how many people there are here who will fly AA over far superior airlines simply to earn AAdvantage miles/points.

A couple of notes. If AA goes to revenue-based (and not just EQP-EQM combined requirement), the question is why (except copying other airlines)? Too much cheap elites getting benefits? I am just wondering what benefit would be to worry about?

Upgrades? Well, but would you still charge for upgrades to PLT and GLD then?
Free bags? Not sure many free bags get checked.
Mileage earnings reduction? So, the key problem here is the tons of non-airline partner out there who award miles. There need not be a revenue component to reduce miles earnings, you just reduce the number of RDM versus fare class.
Too many premium awards? Again, on the US/AA side, they have effectively reduced the number of overseas J and F awards already at the lower saaver levels (almost impossible to find in my opinion).

I could see a step next year where a EQP required plus EQM or EQS would be applied. I think something around 60-75k EQP minimum is possible for EXP. You get rid of the $5k or less EXPs or $2k or less PLTs, but don't add confusion about source fare booking site (because I wish I could book QR coded cheaper fares on AA, but no can do easily).

I can be wrong about all of this, but I see how the AA program operates is still pretty different than what UA and DL have (excluding the revenue requirement). Now, even with no changes, I can easily see the focus being on Y awards versus other higher levels which seems like the direction all of the programs have taken.

To me, the biggest driver to go to revenue is this ridiculous fare matching going on (which D Parker did indicate on analyst calls was going to happen). Many people are enjoying LCC fares on AA (a $68 walk-up fare DFW-LAX, oh my). So, that is the other option too, just de-base the accrual on those O and S fares (which has been done before) because I don't see a lot of low fares in other buckets anyway.

Rasheed

+1. There is nothing "certain" about going to a revenue based program. To me, just because UA and DL are doing isn't a strong enough reason to say everyone else will do. AA has been pretty good about doing its own thing, and like you said, they've successfully poached disgruntled flyers from UA and DL because of those changes.

AA has also found ways of rewarding high value flyers with bonus miles. Had I not had my accident and kept my scheduled trip to ICN, I would have ended up with over 60k miles for a paid F ticket. That's actually more than I would have gotten on UA/DL with no status.

I think going straight revenue would kill the FFPs as we know it and there wouldn't be much reason to remain loyal to any given carrier. And given that how the FFPs are big cash cows with CC miles, selling miles, etc, I don't think that boat's going to get rocked too much more.