JonNYC

It's what it was referring to.

Dave Noble

If the value being given significantly exceeds the expenditure, there may not be a negative revenue by losing the customer

If the person starts making decisions based on value, that is a sensible action imo by the passenger. Of course, if spreading the expenditure around, then the earnings may reduce - if continuing to use AA some of the time but only enough for Platinum status, the the earnings will reduce by 36%. and increase the requirements for getting the same free flight by 59%

Fanjet

If someone is becoming "unchained" from the FFer trap, and is shopping based solely on price, then such an action definitely benefits the passenger. If said passenger is shopping around on price and is still looking to snag a free F award to Asia, I don't see this working. In fact, it would seem much harder to achieve any type of free award this way, than by only sticking with one FFer program.

People need to determine for themselves what their main objective is when flying. Aside from getting from point A to point B. The era of having it all, but not willing to pay for it, is long gone.

cmd320

What is a "free F award"? You mean like an SWU or an AAdvantage award ticket?

akcae

The point that Gary Leff has been making, and I agree with, is that the airlines are slowly killing the golden goose of FFPs by turning them into rebate programs based solely on revenue. They're rewarding most the most price insensitive customers (i.e., those paying most $$), and rewarding least those most price sensitive, which is the exact opposite of what FFPs are designed to do. FFPs, by offering aspirational awards, have turned something that is a commodity, a seat on a plane, into something people feel brand-loyal to. They're undoing this process now and killing any sense of loyalty people have towards them. It may work for now, but it is their undoing in the long run. The FFPs have for a long time been the most profitable line of business within the airlines, and there's a reason for it.

rjw242

That makes no sense to me. The most price-sensitive customers, by definition, are not loyal; they choose whomever offers the cheapest fare. The most price-insensitive customers likely care more about direct flights and amenities. Frequent flyer programs have tended to aim somewhere in between, and they still do -- they've just shifted up a bit what they define as "in between."

bse118

The other problem with this line of reasoning is that it assumes that the "rebate" or the aspirational award is what is motivating people to buy tickets.

The vast majority of my flying is for work. I'm taking those trips regardless of if I earn rewards tickets for later trips. I'm far more interested in the elite benefits part of the program than I am in the RDMs. I bet there's a significant number of people that have a similar perspective. The change to the revenue based RDM system isn't going to change my purchasing behavior one iota.

And the profit center in FFP's is increasingly shifting towards Credit Card deals...

BThumme

Approach it from a rewards perspective though. If A to B costs $100 on one carrier, $200 on another (or just a higher fare bucket), you are being rewarded more for picking the pricier option - which would be where the cost insensitive comes from.

I am one on here that is trying to accumulate as much RDMs as I can before it goes to cost based. Since 98% of my flights are my own money, I have to go with the cheapest options whenever I can.

rjw242

Yes, but taking off the FlyerTalk lenses, the vast majority of truly cost-insensitive travelers won't be strongly influenced by loyalty programs. If money (at the level of commercial airline tickets) is no object, most people will choose whoever has a nonstop on the route they need, and/or whose service they like the most, and/or whomever their corporate travel agent books.

But some customers with price flexibility will indeed choose based on loyalty programs. Again, these folks fall in between the posited extremes, and are targeted by both the previous and current loyalty programs.

SFO777

Interesting discussion. I've come to embrace the changes but probably not for the reasons AA contemplated. With the changes, I easily re-qualified for EXP earlier this year, mostly on cheap fares. So there is absolutely no reason for me to fly AA for the rest of this year, especially since UA matched me to 1K. Without having to worry about status re-qualification, it's quite liberating to buy based on the best combination of convenience, price and service. Most of the time these days, it's not AA.

BThumme

I'm in a similar boat, but wouldn't the reason be free upgrades (and much better than UA) and earning 2x the miles flown? That's a much better incentive if there isn't a huge delta in price.

SFO777

Indeed, free upgrades are nice and likely at a higher percentage than UA. But with discounted F fares, I find myself buying a lot of F fares anyway. They earn more miles and I get to pick the best airline on the route, confirm better seats and not worry about the upgrade lottery. And on some routes, I've found F on other airlines for less than AA's Y price. Heck, AA doesn't even have an F cabin on some of my routes.

Even with a free upgrade, there is no way I would fly some AA planes and routes, like the A321 to Hawaii. Why pay $392 for Y on AA's LAX-HNL A321 even with a reasonable chance of an upgrade, when for $235 more I was able to book a 1-2-1 configuration lie flat 763 seat on DL.

ckendall

I recently heard an AA presentation and improved RM was used in the context of pricing and marketing the new basic economy seats on routes that Spirit was flying.

Global321

Sir, I have read your trip reports... you sir, are no UA flyer!

JonNYC

Certainly makes sense.