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American CEO Doug Parker Attacks Mileage Runs...

American CEO Doug Parker Attacks Mileage Runs...

Old Oct 27, 17, 4:29 pm
  #1  
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American CEO Doug Parker Attacks Mileage Runs...

From VFTW - Gary Leff - October 27, 2017

American CEO Doug Parker Attacks Mileage Runs, Wants Miles to Be Like Bitcoin

http://viewfromthewing.boardingarea....just-currency/


Doug Parker QUOTE:

“All of our customers are valuable, but those who pay us the most are the most valuable,” he said. “That’s the behavior you want to reward. You had this really perverse thing going on where we had people wanting miles so badly that they would do these mileage runs — looking for the cheapest fare they could find to go to who-knows-where and back.

“And that didn’t seem right to us. The dollar-based plan makes much more sense. We’re in the right place now.”



Mods - feel free to move/merge/change thread title. Thx.

.

Last edited by 24left; Oct 27, 17 at 5:07 pm Reason: date
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Old Oct 27, 17, 4:39 pm
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It really gets down to how he views the business: is it an airline or a virtual currency?

I'd argue that AA+DL+UA+WN have done much better with their virtual currency businesses than their airline business.
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Old Oct 27, 17, 4:44 pm
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as much as I don't like what he said, Dougie is right. Who should the airline try to keep happier: the flyer who spends an average of $.50 per mile flown or one who spends %.65 per mile? This is a business no-brainer. We're all just irritated that we can't do what we used to do to get the perks we want.
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Old Oct 27, 17, 4:47 pm
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I've done a few MRs over the years but my motivation was not usually related to earning miles. It was related to earning status.

But I also *love* to fly. I'm probably in the lowest percentile of the traveling public that way, but I enjoy the airport experience. The in-flight experience (planes are awesome!). And the general buzz of travel.

And I almost always was doing a MR to somewhere I'd never been or someplace exotic (to me).

I can see how Doug doesn't value that business, but without MRs and the people interested in them he'd have far fewer online fans than he does. Think of the great trip report coverage he gets from all the blogs that show off his carrier's premium products. Air travel, despite being a near commodity, still has room for enthusiasm, style, prestige and romance. It's not the cable company, after all, unless the companies providing that service treat it as such.
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Old Oct 27, 17, 4:48 pm
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For many participants, Mileage Runs are now Dollar Runs. The goals are the same. I don't see where AA is losing money if someone decides to spend a weekend flying around to earn EQMs, EQDs or to have fun.
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Old Oct 27, 17, 4:56 pm
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Originally Posted by SOBE ER DOC View Post
as much as I don't like what he said, Dougie is right. Who should the airline try to keep happier: the flyer who spends an average of $.50 per mile flown or one who spends %.65 per mile? This is a business no-brainer. We're all just irritated that we can't do what we used to do to get the perks we want.
Like AA FT forum said very specifically, partner airlines would not give him or AA any information of what the ticket costs. This is actually a better incentive of us paying for premium cabin travel in OneWorld partners. As air travel has become more mainstream, it is imperative that you need to draw a line for customer service. So far, AA has failed miserably.

He can do/say whatever he wants Mr. Parker, but one thing for sure, good luck finding information from another partner airline other than maybe BA or JL. I for one would be happy to pay PEY/J fare on any OneWorld Premium carriers other than AA.

Originally Posted by worldwidedreamer View Post
It really gets down to how he views the business: is it an airline or a virtual currency?

I'd argue that AA+DL+UA+WN have done much better with their virtual currency businesses than their airline business.
The latest program change told you all you need to know:

1. EQDs.
2. Don't care about 4-segment requirement, so you don't even need to fly AA to qualify for status. -> To me that means they don't care about loyalty at all.

Bold mine. Maybe for now, but please do not forget US3 was in the bankruptcy before. When you can always have the second chance like the United States generally provide, you can manipulate the spreadsheet any way you want.
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Last edited by PaulInTheSky; Oct 27, 17 at 5:01 pm
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Old Oct 27, 17, 4:56 pm
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Sorry Doug, we were just playing the game that your company set up. LAX-LHR-LAX for $ 299 to maintain my EXP status was the smartest purchase I ever made.
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Old Oct 27, 17, 5:03 pm
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Originally Posted by 24left View Post
From VFTW - Gary Leff - October 27 ,2016

American CEO Doug Parker Attacks Mileage Runs, Wants Miles to Be Like Bitcoin

http://viewfromthewing.boardingarea....just-currency/


Doug Parker QUOTE:

“All of our customers are valuable, but those who pay us the most are the most valuable,” he said. “That’s the behavior you want to reward. You had this really perverse thing going on where we had people wanting miles so badly that they would do these mileage runs — looking for the cheapest fare they could find to go to who-knows-where and back.
Is this story one year old (2016), or is that a typo?

However, he is right. It is one thing for someone to take advantage of a really low fare. It is another thing to reward that purchaser with benefits that make the cost to outright purchase that benefit much higher than getting it via a mileage run. For example, basically getting a free intl F ticket for basically three cleverly-routed, sub-$300 mileage runs to FRA. (And full disclosure... I have done that). While also meeting nearly half of the EXP requirement threashold.
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Old Oct 27, 17, 5:05 pm
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In theory (I reiterate: in theory), when they went to a revenue-based system it should have improved returns for the carrier (it has, no doubt) and also improved the program for its participants. Instead they've taken away 4 SWUs from ExPlt and cut a hundred other ways that make it less valuable for me to be loyal.

The net effect, in my case, is I'm less loyal to any carrier now. I am still ExPlt on AA and will strive to continue to be but I shop based on price, nonstops, product (preferring Delta Comfort+ in many cases where an upgrade ain't happenin') and schedule.

I don't disagree with Doug's perspective, but they made a new bed. And I hope they're happy with its trappings because the side effects may not be seen for a couple of years.
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Old Oct 27, 17, 5:07 pm
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Originally Posted by Fanjet View Post
Is this story one year old (2016), or is that a typo?...
Fixed. Thanks. I would not post a link to a story that's a year old unless the reference was relevant to the discussion (and the Dallas Morning News article was only posted a few hours ago ).
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Old Oct 27, 17, 5:07 pm
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I知 beginning a LAX-LHR-JNB-LHR-LAX MR run tonight with a same-day turn @ JNB!

And I知 flying in PE on BA to earn 3x the EQDs that I spent for the ticket ($1462).

Gonna have a great weekend! Qantas FC Lounge @ LAX.....Yummmm!!!
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Old Oct 27, 17, 5:08 pm
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I amassed millions of miles doing ultra cheap mileage runs that I can now redeem in my retirement even at slighty inflated requirements. With status.

I dont call this perverse - I call drunk driving perverse and just plain reckless.
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Old Oct 27, 17, 5:09 pm
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Originally Posted by 355F1 View Post
I知 beginning a LAX-LHR-JNB-LHR-LAX MR run tonight with a same-day turn @ JNB!

And I知 flying in PE on BA to earn 3x the EQDs that I spent for the ticket ($1462).

Gonna have a great weekend! Qantas FC Lounge @ LAX.....Yummmm!!!
You. Are. Crazy. Man. Great trip!
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Old Oct 27, 17, 5:09 pm
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Originally Posted by 355F1 View Post
I知 beginning a LAX-LHR-JNB-LHR-LAX MR run tonight with a same-day turn @ JNB!

And I知 flying in PE on BA to earn 3x the EQDs that I spent for the ticket ($1462).

Gonna have a great weekend! Qantas FC Lounge @ LAX.....Yummmm!!!
Awesome. Have fun.

Shall I tell Doug, or would you like to?
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Old Oct 27, 17, 5:38 pm
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Originally Posted by cynicAAl View Post
Sorry Doug, we were just playing the game that your company set up. LAX-LHR-LAX for $ 299 to maintain my EXP status was the smartest purchase I ever made.
And all he's saying is that this behavior was unprofitable for the company and they are making adjustments so this opportunity no longer exists.

It's hard to disagree with this view from the CEO of a company - we reward our most profitable customers and we try to eliminate places where we lose money/give away our product too cheaply. Seems logical to me.
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