Nov 6, 2015, 8:16 am
Last edit by: JDiver
ARCHIVE: 2016 AAdvantage Program Changes (Consolidated thread)
For the thread on the Nov 17, 2016 official announcement, click HERE
For the thread on the Nov 17, 2016 official announcement, click HERE
This thread has now been archived in favor of 2016 AAdvantage Program Changes Announced 18 Nov 2015
The speculation thread has been archived to ARCHIVE: Speculation: Future changes to AAdvantage program?
Q. What do we know at this point?
AA announced changes to EQM earning and status benefits in the 2017 status year (status earned in 2016) on Nov 17, 2015. These changes were previewed by member and travelingbetter.com founder JonNYC here and on travelingbetter.com.
- No minimum spend requirements for AAdvantage elitestatus levels.
- No changes to EQM / EQS requirements for AAdvantage elite status tiers.
- All currently published fares on AA continue earning at least 100% EQM. EQP will not be a factor, and "disappear"; EQM will be variable beyond 100%. higher spend rewarded with EQM bonuses. travelingbetter.com says:
- Full fare First/Business F/J 3 EQMs per mile flown
- Discount fare First/Business 2 EQMs per mile flown
- Full fare Y/B 1.5 EQMs per mile flown
- Discount Main Cabin 1 EQM per mile flown
- Partner-marketed flights will earn 0, 0.5, 1.0, or 1.5 EQMs, according to the airline partner earning charts. Generally, most discount economy fares earn 0.5 EQMs per mile flown, and all discount and full fare premium economy, business, and first fares earn 1.5 EQMs per mile flown.
- Status year will reset Jan 31 (2018) for those earning status in C/Y 2016
- SWU earning for EP will be variable - 4 for 100k EQMs, 2 more at 150k EQMs, and 2 more (8 total) at 200k EQMs.
- 4 SWU for Concierge Key / CK.
- SWU still usable on all currently published fares.
- 500 mile upgrade earning goes to 4 for every 12.5k EQMs (as opposed to current 4 for every 10k base miles) beginning on March 1, 2016, and MTEU year commences 1 Feb to align with new status period
- No major changes to AAdvantage awards, though some yet unannounced devaluative changes
willmay be made March 22, 2016 (others than travelingbetter.com)
- Changes coming later in 2016 regarding earning RDM / Redeemable Miles; earning RDM apparently will be "radically different" according to travelingbetter.com, and likely significantly impact RDM earning on lower fares - "$$ X status" says JonNYC.
- Per Gary Leff at View From the Wing, here are the new RDM earning levels¹:
Please note: There are NO additional elite status bonuses.
¹Award miles will be calculated using the fare purchased less any taxes and fees; flights sold with an AA flight number will include any carrier-imposed surcharges.
Q. When would a change occur?
- Elite earning and SWU changes above would be effective for 2016 program year (for earning status for 2017)
- We don't know the exact implementation date for the RDM changes in later 2016.
Earlier: Mr. Parker stated there would be no changes for 2015.
Mr. Parker said he'd not be averse to using others' ideas if they worked.
28 Sep 2015: AA spokesperson Laura Nedbal to Gary Leff:
"If we were to issue changes like this we would be certain to give plenty of advanced notice."
"More than half to the company’s revenue — and 87 percent of its seats sold — come from passengers who fly American once a year or less" - S Kirby
Recently, President Scott Kirby said he was hoping for “more innovation within the frequent flyer program" (Lucky, http://="http://onemileatatime.board...ges-2016"]here.
Mr. Parker said he'd not be averse to using others' ideas if they worked.
28 Sep 2015: AA spokesperson Laura Nedbal to Gary Leff:
"If we were to issue changes like this we would be certain to give plenty of advanced notice."
"More than half to the company’s revenue — and 87 percent of its seats sold — come from passengers who fly American once a year or less" - S Kirby
Recently, President Scott Kirby said he was hoping for “more innovation within the frequent flyer program" (Lucky, http://="http://onemileatatime.board...ges-2016"]here.
AAdvantage program updates
Starting in 2016, we’ll make changes to the American Airlines AAdvantage® program. We’re evolving to build a rewarding program for all members, while giving our best customers access to our best benefits.
These updates will roll out in phases over time. We’ll keep you updated as we implement these changes.
Elite status in 2016
Qualifying structure
Beginning January 1, 2016, elite-qualifying points will be removed from our qualifying structure. Instead, qualification will be determined by Elite Qualifying Miles (EQMs) or Elite Qualifying Segments (EQSs) earned during a calendar year.
The membership year is also changing. Beginning with the 2017 membership year, elite status will be valid through January 31 of the following year.
Qualify for AAdvantage elite status in 2016
EQSs and EQMs
EQMs and EQSs will continue to be earned for eligible travel on American Airlines, oneworld® airlines, Alaska Airlines and American-marketed codeshare flights.
You’ll still earn 1 EQS for each eligible segment you fly.
You’ll continue to earn EQMs based on the airline and booking class purchased. Plus, Full-fare Economy, Business Class or First Class tickets on American-marketed flights will earn EQMs at a higher rate – getting you to elite status faster.
On American-marketed flights:
3 EQMs/mile – Full-fare First or Business
2 EQMs/mile - Discount First or Business
1.5 EQMs/mile – Full-fare Main Cabin
1 EQM/mile - Discount Main Cabin
Learn more about earning EQMs on American
The amount of EQMs you earn on partner airlines will change. Earn rates will vary depending on the airline.
Explore our partner airlines
Earn more EQMs
Also, as a Citi® / AAdvantage® Executive card or AAdvantage® Aviator™ Silver MasterCard® credit cardmember, you’ll still earn 10,000 EQMs after you reach your qualifying spend for the year when you use your eligible AAdvantage credit card.
Learn more about the Citi®/AAdvantage® Executive card
Learn more about the AAdvantage® Aviator™ Silver MasterCard®
Elite-qualifying thresholds
Qualification* Executive Platinum / oneworld® Emerald SM Platinum / oneworld® SapphireSM Gold / oneworld® RubySM
EQMs 100,000 50,000 25,000
EQSs 120 60 30
*At least four of the segments must be flown on American during the qualifying year to receive elite status.
Upgrades
Systemwide upgrades
If you qualify for Executive Platinum status by December 31, 2015, you’ll still earn 8 upgrades to use during your 2016 membership year.
Starting January 1, 2016, Executive Platinum members will receive 4 systemwide upgrades upon qualification or re-qualification, with the ability to earn up to a total of 8 per year.
Earn additional upgrades
Customers can earn up to 4 additional systemwide upgrades; 2 for every 50,000 EQMs earned above 100,000.
500-mile upgrades
Starting March 1, 2016:
Gold and Platinum members will earn four 500-mile upgrades for every 12,500 EQMs earned during the membership year
The price of 500-mile upgrades will increase to $40, online, at the airport and from an American Airlines agent
The price for purchasing 500-mile upgrades with miles will increase to 40,000 miles for 8 upgrades
Award miles
Earning in 2016 and beyond
In the second half of 2016, award miles for travel on American marketed flights will be calculated based on what you pay for your ticket (base fare plus carrier-imposed fees, excluding any government-imposed taxes and fees) and your elite status; the higher your status, the more you’ll earn.
5 miles/U.S. dollar – AAdvantage member
7 miles/U.S. dollar – Gold
8 miles/U.S. dollar – Platinum
11 miles/U.S. dollar – Executive Platinum
Sample calculation
Earn bonus miles
We’ve extended our 2015 AAdvantage bonus miles promotion! Earn more award miles when you fly on a First or Business class ticket on American and select other airlines until the changes to earning award miles go into effect in the second half of 2016.
Learn more about our AAdvantage bonus miles promotion
Award redemption changes
We’re changing existing award levels for award tickets redeemed on March 22, 2016 and beyond. Plus, we’re introducing new MileSAAver® awards as low as 7,500 miles one-way (plus any applicable taxes and carrier-imposed fees) for flights 500 miles or less.
Changes to American award charts
Changes to other airline award charts
ARCHIVE: 2016 AAdvantage Program Changes (formally unannounced, but reliably sourced)
Nov 8, 2015, 9:45 pm
#811
FlyerTalk Evangelist
Join Date: Aug 2014
Programs: Top Tier with all 3 alliances
Posts: 11,668
The new RDM system is not about rewarding fliers more equitably, is mostly a formula to provide fewer RDM rewards to consumers in total. How did they come up with those multipliers? Because the sum total of RDM rewards is way less than before. This is what is hidden in there, carefully camouflaged as fairness and innovation. When airlines are making record profits, as a consumer, I want back a better rebate in the form of more RDMs for my loyalty. If the US legacies have all conspired to further maximize their profits and minimize consumer benefits just because they can (see unrestrained capitalism and monopolies), I say bring in the M3 to stimulate competition, and you will see how quickly the RDMs will be back.
Nov 8, 2015, 9:47 pm
#812
FlyerTalk Evangelist
Join Date: Aug 2008
Location: Usually in SAN or Central Europe.
Programs: AA:EXP/1MM. Accor/Radisson:Silver; HH:Gold; ICH:Plt Amb.
Posts: 22,307
Airlines have seats they want to fill. For that purpose they publish different fares to appeal to different travelers. But once that door closes, any empty seat is an opportunity (and revenue) lost. If I buy a $600 fare to HKG three months in advance, I didn't cheat anyone; I bought a product the airline was willing to sell at that price point. Similarly, someone who HAS to go to HKG tomorrow will buy that seat at $2000, again at a price point the seat is available at. Am I somehow "less valuable" than the last-minute purchaser? No, people buying in advance allow the airline to better project pricing for the more close-in sales and provide better forecasting for load factors and profitability of each flight. We are all a mix the airline needs to be successful.
Nov 8, 2015, 9:48 pm
#813
Join Date: Dec 2010
Location: DEN
Programs: AA EXP, AA Million Miles, Hilton Diamond
Posts: 2,586
This thread is like déjà-vu all over again from the treads on DL forum from a year ago.
<snip>
I was very encouraged by AA's promise that "a mile flown = a mile earned" and how well they stepped thru the merger. Even while with DL, I've always thought that the AAdvantage program was in many ways superior to Skymiles. Unfortunately, it looks like AA is determined to be just another me-to airline soon and is throwing out the "loyalty" part from the loyalty programs they invented. So much for innovation.
<snip>
I was very encouraged by AA's promise that "a mile flown = a mile earned" and how well they stepped thru the merger. Even while with DL, I've always thought that the AAdvantage program was in many ways superior to Skymiles. Unfortunately, it looks like AA is determined to be just another me-to airline soon and is throwing out the "loyalty" part from the loyalty programs they invented. So much for innovation.
The airlines are interested in incentivizing/rewarding A) those individuals that travel often and B) those individuals buying F/J/full fare Y. Those few times a year travelers that buy those marginal seats: the airline is going to be able find someone to buy that seat who's motivated by price alone. So if they lose one person who did 4-5 trips a year, motivated by RDMs, they'll likely replace that with 4-5 individuals, motivated by lowest price, buying 1 trip each. Same marginal revenue; less RDM liability. Airline wins.
Nov 8, 2015, 10:02 pm
#814
FlyerTalk Evangelist
Join Date: Aug 2008
Location: Usually in SAN or Central Europe.
Programs: AA:EXP/1MM. Accor/Radisson:Silver; HH:Gold; ICH:Plt Amb.
Posts: 22,307
The new RDM system is not about rewarding fliers more equitably, is mostly a formula to provide fewer RDM rewards to consumers in total. How did they come up with those multipliers? Because the sum total of RDM rewards is way less than before. This is what is hidden in there, carefully camouflaged as fairness and innovation. When airlines are making record profits, as a consumer, I want back a better rebate in the form of more RDMs for my loyalty. If the US legacies have all conspired to further maximize their profits and minimize consumer benefits just because they can (see unrestrained capitalism and monopolies), I say bring in the M3 to stimulate competition, and you will see how quickly the RDMs will be back.
And let me remind people that the U.S. legacies are the last to this game. Before DL and UA went to revenue based RDMs, it was WN who did it. And VX before WN. And B6 before VX.
Nov 8, 2015, 10:16 pm
#815
Join Date: Mar 2010
Programs: AA EXP, AA LT Gold, SPG Plat 75
Posts: 890
In your example, the EXP paying $2000 for his ticket to HKG is receiving the same amount of FF miles as the EXP who only paid $600. How is that fair? Moreover, if both want to apply a SWU to their ticket, the $600 EXP has higher priority over the $2000 EXP. And if you want to use the example of the $600 fare EXP as helping AA forecast load factors and pricing, that can also be done by anyone wanting to fly to HKG on a $600 fare.
If my boss tells me book a ticket to HKG for 6 weeks from now but make sure I buy it today, then I am stuck with whatever fare AA is offering today. And before you say I can just book a J ticket, no I can't--my company makes me purchase the cheapest Y ticket available. I'm still spending the 17 hours on the plane DFW-HKG, same as the EXP who purchases it last minute. That's a long 8,111 miles, and I expect to earn 1 award mile for every single one of those 8,111 miles. If I am not, then I can shift over to Cathay or another airline which is superior and/or cheaper. I am being penalized for purchasing what the airline is offering at the time I make my booking.
So, I ask you again, how is that fair?
Nov 8, 2015, 10:26 pm
#816
FlyerTalk Evangelist
Join Date: Aug 2008
Location: Usually in SAN or Central Europe.
Programs: AA:EXP/1MM. Accor/Radisson:Silver; HH:Gold; ICH:Plt Amb.
Posts: 22,307
If my boss tells me book a ticket to HKG for 6 weeks from now but make sure I buy it today, then I am stuck with whatever fare AA is offering today. And before you say I can just book a J ticket, no I can't--my company makes me purchase the cheapest Y ticket available. I'm still spending the 17 hours on the plane DFW-HKG, same as the EXP who purchases it last minute. That's a long 8,111 miles, and I expect to earn 1 award mile for every single one of those 8,111 miles. If I am not, then I can shift over to Cathay or another airline which is superior and/or cheaper. I am being penalized for purchasing what the airline is offering at the time I make my booking.
AA is not going to put much effort in chasing the FFer who only buys the lowest fares available. That's the reality.
Nov 8, 2015, 10:37 pm
#817
Join Date: Feb 2014
Location: YYC, SFO, OAK
Programs: AS MVP 75K, AA Platinum, IHG Platinum, Club Carlson Gold
Posts: 734
Nov 8, 2015, 10:40 pm
#818
Original Member
Join Date: May 1998
Location: Syracuse, NY
Programs: 1k UA, UA MM, AA EXPlat
Posts: 639
It's not being penalized. Penalizing you would be making you pay the same fare as the person buying at the last minute.
Those two tend to contradict each other.
AA is not going to put much effort in chasing the FFer who only buys the lowest fares available. That's the reality.
Those two tend to contradict each other.
AA is not going to put much effort in chasing the FFer who only buys the lowest fares available. That's the reality.
What I don't understand is why AA wouldn't want a strategy of finding the "mini-frequent flyer" =--the one who would fly 2-10x a year on them---it seems like low hanging fruit---yes, you have the hvf, but then the ones in between seem to be quite lucrative and needed given the stats that AA put out. Yet, there isn't a strategy to play nice with them.
Nov 8, 2015, 10:50 pm
#819
Join Date: Mar 2001
Programs: AA EXP, BA Gold, UA LT-Gold, SPG Plat, HH Dia, Hyatt Dia, MR Gold
Posts: 2,221
Then we really need to see who is AA going after.
Is AA willing to alienate a certain percentage of customers that will forgo status and fly other carriers?
If AA pulls this change, I have no reason to stay with any FFP, and buy discounted biz with EY, EK, QR, which they do so very often. These ME carriers should fly into SEA/PDX and use AS route network.
AS has much to win from this synergy.
The only ones that are caught by this change are primarily domestic flyers, that DO NOT have a choice.
Is AA willing to alienate a certain percentage of customers that will forgo status and fly other carriers?
If AA pulls this change, I have no reason to stay with any FFP, and buy discounted biz with EY, EK, QR, which they do so very often. These ME carriers should fly into SEA/PDX and use AS route network.
AS has much to win from this synergy.
The only ones that are caught by this change are primarily domestic flyers, that DO NOT have a choice.
Nov 8, 2015, 10:56 pm
#820
A FlyerTalk Posting Legend
Join Date: Jan 2002
Posts: 44,597
If my boss tells me book a ticket to HKG for 6 weeks from now but make sure I buy it today, then I am stuck with whatever fare AA is offering today. And before you say I can just book a J ticket, no I can't--my company makes me purchase the cheapest Y ticket available. I'm still spending the 17 hours on the plane DFW-HKG, same as the EXP who purchases it last minute. That's a long 8,111 miles, and I expect to earn 1 award mile for every single one of those 8,111 miles. If I am not, then I can shift over to Cathay or another airline which is superior and/or cheaper. I am being penalized for purchasing what the airline is offering at the time I make my booking.
So, I ask you again, how is that fair?
Nov 8, 2015, 11:06 pm
#821
Join Date: Jul 2014
Location: LAX
Programs: Hyatt Globalist, AA EXP, Hilton Diamond, Wyndham Diamond, DL PM, Marriott Platinum, IHG Platinum
Posts: 1,305
This thread is like déjà-vu all over again from the treads on DL forum from a year ago. And I see the same to me incomprehensible hostility from those who have to travel towards those who choose to travel, how the "gamers" are now screwed, they are somehow "underserving" of the miles and status they earn because they're not out there, week in, week out, slogging it and earning the status the hard way. I don't get how people see it as a zero-sum game, that somehow a person earning EXP on a few NA-Asia trips when a cheap fare pops up is taking away from someone else's EXP they earned flying OMA-PIT every other week.
Airlines have seats they want to fill. For that purpose they publish different fares to appeal to different travelers. But once that door closes, any empty seat is an opportunity (and revenue) lost. If I buy a $600 fare to HKG three months in advance, I didn't cheat anyone; I bought a product the airline was willing to sell at that price point. Similarly, someone who HAS to go to HKG tomorrow will buy that seat at $2000, again at a price point the seat is available at. Am I somehow "less valuable" than the last-minute purchaser? No, people buying in advance allow the airline to better project pricing for the more close-in sales and provide better forecasting for load factors and profitability of each flight. We are all a mix the airline needs to be successful.
And the FF program is there to incentivize us all to pick one airline over another, and for many of us even to travel at all vs. staying home. I don't have to to HKG *ever*. But AA published a fare that I couldn't resist, so I gave them my money. So for the few times a year I get on the plane, AA benefits that I chose them over UA/DL/WN/B6 (or any number of foreign carriers with much better hard/soft product) whom I might otherwise chose based solely on price (and I've done 14-16hrs in C+ on DL, and it's not bad).
It's not a zero-sum game. If I get on a plane 5-10/yr for fun, it's not diminishing how "special" anyone else's elite status/benefits are during their 50-100 flights they have to take that same year. And the marginal revenue gained by the airline from the flyers who choose them (or choose to fly at all) is not insignificant, as AA's earnings call indicated.
As Gary Leff argues, turning FF loyalty programs into a rebate/punch-card program is a dangerous game for the legacies. Once there's no promise of that special trip we can take with the miles if we stayed loyal and chose them over competitors regardless of price, they are going to be competing with the LCC not just on the direct routes like AA plans, but on ALL travel. And LCCs have a much more favorable cost structure. And for international travel, ME3 and most Asian and some EU airlines are miles ahead on both hard and soft product.
Secondly, as credit cards and online shopping portals become a more lucrative way to earn "miles", paying actual $$ for flights becomes a dubious proposition unless one must travel. If I can earn as many miles by sending someone flowers when Teleflora offers 20-30mi/$, why would I waste my time flying for miles when even as an EXP one would earn half or less per $? Just send a bunch of flowers to friends and family, and earn enough for a J award 2-3x faster (& cheaper) than giving AA money and flying. And that translates to lower load factors.
For 20+ yrs, I was loyal to DL. They took me to 5 continents and all over the US for both work and leisure trips. I could count my non-DL flights (both paid and awards) on two hands. For that time I maintained some level of mid-to-high elite most of those years, including many consecutive years of Platinum Medallion back when that was the top tier. Often DL didn't have the cheapest or the most convenient flight, but they always got my business. After last year's change to the 5-11x system for RDMs, it was clear that loyalty indeed did only go one way, so I switched to AA. I will be EXP before the year is out. I was very encouraged by AA's promise that "a mile flown = a mile earned" and how well they stepped thru the merger. Even while with DL, I've always thought that the AAdvantage program was in many ways superior to Skymiles. Unfortunately, it looks like AA is determined to be just another me-to airline soon and is throwing out the "loyalty" part from the loyalty programs they invented. So much for innovation.
Airlines have seats they want to fill. For that purpose they publish different fares to appeal to different travelers. But once that door closes, any empty seat is an opportunity (and revenue) lost. If I buy a $600 fare to HKG three months in advance, I didn't cheat anyone; I bought a product the airline was willing to sell at that price point. Similarly, someone who HAS to go to HKG tomorrow will buy that seat at $2000, again at a price point the seat is available at. Am I somehow "less valuable" than the last-minute purchaser? No, people buying in advance allow the airline to better project pricing for the more close-in sales and provide better forecasting for load factors and profitability of each flight. We are all a mix the airline needs to be successful.
And the FF program is there to incentivize us all to pick one airline over another, and for many of us even to travel at all vs. staying home. I don't have to to HKG *ever*. But AA published a fare that I couldn't resist, so I gave them my money. So for the few times a year I get on the plane, AA benefits that I chose them over UA/DL/WN/B6 (or any number of foreign carriers with much better hard/soft product) whom I might otherwise chose based solely on price (and I've done 14-16hrs in C+ on DL, and it's not bad).
It's not a zero-sum game. If I get on a plane 5-10/yr for fun, it's not diminishing how "special" anyone else's elite status/benefits are during their 50-100 flights they have to take that same year. And the marginal revenue gained by the airline from the flyers who choose them (or choose to fly at all) is not insignificant, as AA's earnings call indicated.
As Gary Leff argues, turning FF loyalty programs into a rebate/punch-card program is a dangerous game for the legacies. Once there's no promise of that special trip we can take with the miles if we stayed loyal and chose them over competitors regardless of price, they are going to be competing with the LCC not just on the direct routes like AA plans, but on ALL travel. And LCCs have a much more favorable cost structure. And for international travel, ME3 and most Asian and some EU airlines are miles ahead on both hard and soft product.
Secondly, as credit cards and online shopping portals become a more lucrative way to earn "miles", paying actual $$ for flights becomes a dubious proposition unless one must travel. If I can earn as many miles by sending someone flowers when Teleflora offers 20-30mi/$, why would I waste my time flying for miles when even as an EXP one would earn half or less per $? Just send a bunch of flowers to friends and family, and earn enough for a J award 2-3x faster (& cheaper) than giving AA money and flying. And that translates to lower load factors.
For 20+ yrs, I was loyal to DL. They took me to 5 continents and all over the US for both work and leisure trips. I could count my non-DL flights (both paid and awards) on two hands. For that time I maintained some level of mid-to-high elite most of those years, including many consecutive years of Platinum Medallion back when that was the top tier. Often DL didn't have the cheapest or the most convenient flight, but they always got my business. After last year's change to the 5-11x system for RDMs, it was clear that loyalty indeed did only go one way, so I switched to AA. I will be EXP before the year is out. I was very encouraged by AA's promise that "a mile flown = a mile earned" and how well they stepped thru the merger. Even while with DL, I've always thought that the AAdvantage program was in many ways superior to Skymiles. Unfortunately, it looks like AA is determined to be just another me-to airline soon and is throwing out the "loyalty" part from the loyalty programs they invented. So much for innovation.
Until Friday, every flight I booked was on AA. I will still fly mostly AA till October 2016, but now, I don't have the Oneworld filter on my Google Flight searches. My credit card spending has switched from Citi Exec and Barclays Red to hotel and cards where I can transfer points.
Nov 8, 2015, 11:16 pm
#822
FlyerTalk Evangelist
Join Date: Nov 2007
Location: Denver • DEN-APA
Programs: AF Platinum, EK Gold, AA EXP, UA 1K, Hyatt Globalist
Posts: 21,602
Agree. But another reality is that AA is no longer the best domestic service airline as the new regime decided that they didn't need to provide superior service, just try to be somewhat close to DL and UA. The existing best-in-class AAdvantage program gave them the cushion to offset the new mediocre service standard and keep a lot of frequent flyers somewhat "loyal". When that cushion disappears next year, then what? Unless AA offers a better product instead of just being as good as others, then pricing becomes the only selling point. Then the spiral towards an international Spirit begins.
Nov 9, 2015, 1:05 am
#823
Join Date: Jan 2005
Location: NYC
Programs: AA EXP; UA 1K, AS 75K, LT Titanium, Globalist
Posts: 625
Some comments and questions as I've been following:
1. What happens to Airpass customers? I'm assuming status is even more assured now given the high spend, but I expect that RDM returns will vary wildly compared to in the past, no?
2. I didn't see an answer to an earlier question- does a domestic F fare (in 2-class) have a higher qualification multiplier than an international J business fare (in 3-class)? that also seems odd to me given the worlds apart difference in spend, profitability, and seeming focus of this (purported) new program.
3. I find it funny (shameful) that I can now earn more RDM miles by buying my wife a $100 bouquet of flowers from 800flowers or proflowers (at 30miles/$ often) than from going from NYC-LAX and back on a $300 ticket as an EXP.
4. If the legacies have at this point standardized so much on the FFP offerings, then differentiation will have to shift elsewhere. Here are some examples:
- Credit card companies - already go well beyond the airlines themselves to provide bonus miles, award rebates, and flight perks that have nothing to do with incenting travel (as much as spend).
- Booking engines/OTAs - Can really cut into airlines site bookings by playing the arbitrage game. Airlines charge 2-3 cents per mile for mileage multiplier type features at booking, but OTAs could purchase miles from the airline at 1c- you do the math and what the difference could mean in stolen revenue from aa.com direct bookings.
- Employers themselves. I'm not only a traveler, but also a decision-enhancer for tens of thousands in my company. I worry that these changes will drive the wrong behavior (later booking/higher fares), even if subconsciously. It may cost me much less as an employer to run my own shadow mileage program, but I may compete with AA by doing the exact opposite, giving RDM bonuses and filling the gaps between old and new FFP programs for those who buy tickets earlier and in lower fare buckets. My executives and I will always buy last minute fares because we have to. If you extrapolate this solution beyond one company to Concur- or egencia- or amex travel- level aggregation of spend, this would have a substantial negative impact on airline's bottom line.
5. I recall back in the day hearing that American's FFP was worth more than the airlines itself (on the balance sheet). I can't imagine that a program that has so little differentiation in this new world would command such value. While it may help the airline in whatever way one expects FFP programs to, it may also have the counter effect of destroying intangible/brand value in the program.
1. What happens to Airpass customers? I'm assuming status is even more assured now given the high spend, but I expect that RDM returns will vary wildly compared to in the past, no?
2. I didn't see an answer to an earlier question- does a domestic F fare (in 2-class) have a higher qualification multiplier than an international J business fare (in 3-class)? that also seems odd to me given the worlds apart difference in spend, profitability, and seeming focus of this (purported) new program.
3. I find it funny (shameful) that I can now earn more RDM miles by buying my wife a $100 bouquet of flowers from 800flowers or proflowers (at 30miles/$ often) than from going from NYC-LAX and back on a $300 ticket as an EXP.
4. If the legacies have at this point standardized so much on the FFP offerings, then differentiation will have to shift elsewhere. Here are some examples:
- Credit card companies - already go well beyond the airlines themselves to provide bonus miles, award rebates, and flight perks that have nothing to do with incenting travel (as much as spend).
- Booking engines/OTAs - Can really cut into airlines site bookings by playing the arbitrage game. Airlines charge 2-3 cents per mile for mileage multiplier type features at booking, but OTAs could purchase miles from the airline at 1c- you do the math and what the difference could mean in stolen revenue from aa.com direct bookings.
- Employers themselves. I'm not only a traveler, but also a decision-enhancer for tens of thousands in my company. I worry that these changes will drive the wrong behavior (later booking/higher fares), even if subconsciously. It may cost me much less as an employer to run my own shadow mileage program, but I may compete with AA by doing the exact opposite, giving RDM bonuses and filling the gaps between old and new FFP programs for those who buy tickets earlier and in lower fare buckets. My executives and I will always buy last minute fares because we have to. If you extrapolate this solution beyond one company to Concur- or egencia- or amex travel- level aggregation of spend, this would have a substantial negative impact on airline's bottom line.
5. I recall back in the day hearing that American's FFP was worth more than the airlines itself (on the balance sheet). I can't imagine that a program that has so little differentiation in this new world would command such value. While it may help the airline in whatever way one expects FFP programs to, it may also have the counter effect of destroying intangible/brand value in the program.
Nov 9, 2015, 1:15 am
#824
FlyerTalk Evangelist
Join Date: Aug 2008
Location: Usually in SAN or Central Europe.
Programs: AA:EXP/1MM. Accor/Radisson:Silver; HH:Gold; ICH:Plt Amb.
Posts: 22,307
Which is why I said FFer and not consumer. If AA wasn't interested in the person who buys the lowest fares available, they wouldn't offer low fares. However, they do care how much they offer with that low fare.
Nov 9, 2015, 2:10 am
#825
Join Date: Mar 2008
Posts: 4,859
What about those getting 100k miles for a credit card sign up? Oh, but the airline gets paid for those by the bank! Think it's anywhere close to $4500 extrapolated from your example? Are those miles in any way restricted to AA compared to those earned while flying?
Funny thing that AA seems to spin the story about rewarding flyers with RDM. Why the hell would they use multipliers for status customers if no one was interested?
In your example, the EXP paying $2000 for his ticket to HKG is receiving the same amount of FF miles as the EXP who only paid $600. How is that fair? Moreover, if both want to apply a SWU to their ticket, the $600 EXP has higher priority over the $2000 EXP. And if you want to use the example of the $600 fare EXP as helping AA forecast load factors and pricing, that can also be done by anyone wanting to fly to HKG on a $600 fare.
Please stop saying that a cheap-o-flyer somehow steals a sit from under another pax. The airline performance numbers debunk that theory.