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AAdvantage President's Take on the AA Experience

AAdvantage President's Take on the AA Experience

Old Jun 20, 18, 1:39 pm
  #1  
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AAdvantage President's Take on the AA Experience

As reported by Gary Leff:

https://viewfromthewing.boardingarea...-card-pitches/

“AAdvantage President Bridget Blaise-Shamai appeared on the latest American Airlines employee podcast Tell Me Why which is also uploaded on several public podcast hosting sites.

American’s New 75,000 MIle Platinum Pro Elite Tier Works

ConciergeKey Improvements Had to Wait on Technology

Award availability is Getting Better

Premium Economy Awards and Upgrades are Coming

Inflight Credit Card Solicitations are Win-Win-Win

Last edited by JDiver; Jun 20, 18 at 2:32 pm Reason: Add outline of presentation - link alone is insufficient
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Old Jun 20, 18, 2:06 pm
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Originally Posted by jcatman View Post
Flight attendants “go through a modest training to become certified” to offer the card inflight. “This is a win for our employees, for our customers, and for our company because on any given flight we know that on average 87% of customers are flying their only time in 12 months so by and large when our flight attendants are having the marketing message folks on the plane are hearing it for the first time and maybe for the only time the whole year.”
I find it pretty disturbing that an AA exec misunderstands their own data to this degree. 87% of the total passenger base only flies once per year, but it is definitely not the case that on a typical plane 87% of the passengers are on their only flight, because the other 13% definitionally fly more often. AA separately said that revenue is split about 50/50 between "once a year" passengers and more frequent fliers; if you naively assume that each group pays about the same per flight, then you'd expect about half of the passengers on the plane are in the frequent flier bucket and therefore get subjected to the announcement over and over again. So you're not annoying 13% of the plane for the benefit of the 87%, you're annoying the 50% of the passengers who are actual frequent fliers and therefore presumably more likely to be motivated by a frequent flier program.

Edited to add: it's totally possible that revenue per enplanement is different for frequent fliers versus once-a-year passengers, but I can see arguments in both directions. I'm 100% sure that the average per-flight split is closer to 50/50 than 83/17, in any case.
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Last edited by jordyn; Jun 20, 18 at 2:15 pm
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Old Jun 20, 18, 2:34 pm
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Hmm.

Bridget says that “we certainly have it in our plan to allow our customers to use their miles to purchase premium economy and to upgrade into premium economy… time to market still being worked on but it is certainly going to happen.”

I expect that upgrades to premium economy will not be good for upgrades from economy to business, and that award pricing for business class could increase in order to make room for a meaningful difference between coach and premium economy and between premium economy and business class awards.
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Old Jun 20, 18, 3:05 pm
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Originally Posted by jcatman View Post

Inflight Credit Card Solicitations are Win-Win-Win
Soooooo..... Hopefully this chick is on the list of managers getting laid off?
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Old Jun 20, 18, 3:17 pm
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Originally Posted by jcatman View Post
Inflight Credit Card Solicitations are Win-Win-Win
Ah, my Wednesday afternoon laugh is complete!
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Old Jun 20, 18, 3:22 pm
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Originally Posted by DCP2016 View Post
Soooooo..... Hopefully this chick is on the list of managers getting laid off?
Any time I hear the words "win-win", I run the other direction.

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Old Jun 20, 18, 4:02 pm
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Originally Posted by jordyn View Post
I find it pretty disturbing that an AA exec misunderstands their own data to this degree. 87% of the total passenger base only flies once per year, but it is definitely not the case that on a typical plane 87% of the passengers are on their only flight, because the other 13% definitionally fly more often. AA separately said that revenue is split about 50/50 between "once a year" passengers and more frequent fliers; if you naively assume that each group pays about the same per flight, then you'd expect about half of the passengers on the plane are in the frequent flier bucket and therefore get subjected to the announcement over and over again. So you're not annoying 13% of the plane for the benefit of the 87%, you're annoying the 50% of the passengers who are actual frequent fliers and therefore presumably more likely to be motivated by a frequent flier program.

Edited to add: it's totally possible that revenue per enplanement is different for frequent fliers versus once-a-year passengers, but I can see arguments in both directions. I'm 100% sure that the average per-flight split is closer to 50/50 than 83/17, in any case.
Yeah, that's a pretty remarkable misunderstanding (or misrepresentation?) of their own statistic. And because I couldn't remember for sure, the statistic (as reported) is indeed 87% of their unique customers, not 87% of their enplanements. So even if all of those 13% fly AA only twice per year, only 77% of the enplanements are one-time-per-year AA fliers.

For the multiple-trips-per-year fliers to account for half of the trips flown, they'd have to average about 6.7 trips per year. (87 / (87 + 13*6.7) = 0.5.) My wild guess is that the average is a bit less than 6.7, but not much. So I would guess that the once-per-year fliers actually give AA fairly comparable revenue per trip. Probably partly because they would tend to fly longer distances: if you fly once per year or less, it's probably more likely to get to Hawaii or Europe or somewhere else a long way away. If you fly once per year, you'd drive not fly from Chicago to Cleveland or DC to Boston. But there are a heck of a lot of "probably"s in this paragraph.
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Old Jun 20, 18, 4:12 pm
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I also have to question the 87% statistic when I am on an upgrade list 50+ long on an A320 from CLT to PHL.
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Old Jun 20, 18, 4:22 pm
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Originally Posted by jordyn View Post
I find it pretty disturbing that an AA exec misunderstands their own data to this degree. 87% of the total passenger base only flies once per year, but it is definitely not the case that on a typical plane 87% of the passengers are on their only flight, because the other 13% definitionally fly more often.
Like a lot of American execs, she has a MBA background so probably very little training in rigorous scientific and mathematical thoughts. I am not disturbed at all that she might have misunderstood the technical subtleties of the 87% figure. Although in this case, it's perhaps not that subtle but I don't think it's a sign of stupidity. It's just without a rigorous mathematical training, you'll less likely to be precise in the way that you process technical things.

French execs on the other hand are the opposite. It's not unusual to find senior French execs that you can discuss probabilities in terms of Borel measure with.
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Old Jun 20, 18, 6:14 pm
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Originally Posted by muishkin View Post
Like a lot of American execs, she has a MBA background so probably very little training in rigorous scientific and mathematical thoughts.
As an American executive with an MBA, I feel quite comfortable with "fake math" and analogies. The thing is that most of that fake math is actually based in rigorous science. Most of us are just as comfortable in R and SQL as Powerpoint.
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Old Jun 20, 18, 6:33 pm
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I think what is missed is her statements about award availability. I don,t know the statistics but empirically I know F awards internationally are rarely available until close in. Business in my view is only slightly better. I would love to see the stats on those classes of awards.
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Old Jun 20, 18, 7:33 pm
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"Inflight Credit Card Solicitations are Win-Win-Win”...."

For each application submitted AA will receive $250-400 or more, depending on how their contract is written with the cc company. This holds true for the solicitations you get at Walmart, Best Buy, etc. It's lucrative and a pure profit generator.
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Old Jun 20, 18, 8:12 pm
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Originally Posted by JDiver View Post
Hmm.
To be very clear, the highlighted words about award pricing are those of Leff, not Blaise-Shamai.
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Old Jun 20, 18, 8:58 pm
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Originally Posted by worldwidedreamer View Post
As an American executive with an MBA, I feel quite comfortable with "fake math" and analogies. The thing is that most of that fake math is actually based in rigorous science. Most of us are just as comfortable in R and SQL as Powerpoint.
We lost Suzanne Rubin for THIS?

OT

1. (Self redacted)
2. (Self redacted).

My experience with this current crop of MBA's, plus the crop of 35-45 year old future "Captains of Industry", is this:

A. Rarely any experience in the job ever, but with great connections. Way under qualified, way over educated, and in hurry to get ahead at any cost. But they read a book about it (or stayed at a Holiday Inn Express).
B. In full possession of all the answers, all the time, yet not really knowing and understanding the questions.
C. Those with actual experience, instead of being looked at as a resource, are to be feared (politically), shunned, and eventually taken out and shot (FIRED).
D. Get into trouble, fall back on numbers, and throw someone under the bus.

This Bridget whats her hyphenated is using that playbook because that's all she knows. GOING FOR GREAT? And she probably thinks she did a great interview, and the program is great, too.

3. (self redacted)

Back on topic.

Numbers and statistics don't buy tickets. People do.

Last edited by Dallas49er; Jun 21, 18 at 10:18 am
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Old Jun 20, 18, 9:29 pm
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Originally Posted by worldwidedreamer View Post
As an American executive with an MBA, I feel quite comfortable with "fake math" and analogies. The thing is that most of that fake math is actually based in rigorous science. Most of us are just as comfortable in R and SQL as Powerpoint.
Huh? What's behind all of those capital letters?

Even we "less-educated" passengers could give Ms. Blaise-Shamai a reality check about the current AA experience:

Award availability stinks. Many passengers are sick of hearing the credit-card carnival barkers when we are strapped into the seat and cannot escape. Lots of us think that when the ability to upgrade into Premium Economy begins, our ability to upgrade into Business will become even more expensive and unlikely.

I do love the new Flagship Lounges.

Class dismissed.
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