VegasGambler

This is all irrelevant.

The relevant question is whether AA wants to retain this person as a customer.

It's 4 EQDs short. He should just request it.

EXP100

If the OP was EXP 20 years prior to this AND has travel booked enough to suggest he/she will be EXP again this year without promotions, then yes AA should extend a courtesy. But AA realizes that there's a certain amount of business travel that isn't coming back. Even from personal experience AA has cut back on consultant travel. Like many other companies what was accomplished in person is now being accomplished via Zoom.

I suspect and just from my own recent experience there's going to be a certain number of former EXPs that will find themselves with less business travel and pushed down into the ranks of PLT or GLD, unless they supplement it with lots of personal travel or heavy cc spend.

js1993

Given that AA raised EXP thresholds by over 20% over 2019's numbers at a time when long-haul is still difficult or impossible, very few people are going to make EXP without promotions just by flying. AA is either preparing to cull the herd massively or will acknowledge reality by reducing the numbers by around Q3.

VegasGambler

I think that the expectation is that people get significant LP from partners. Flying only of certainly much tougher.

Some people are saying that the new program will significantly increase the number of EXP. And some are saying there will be a massive culling. I think that the numbers will be about the same, but a slightly different group of people (and presumably a more overall profitable group by AA"s analysis)

js1993

Right, all of that is understood. The point was simply that few people will have enough future bookings in their account for AA to predict they'll hit EXP from flying alone.

If thousands of current EXP drop down and are replaced with the big CC/partner spenders, that's still a "massive culling" from the perspective of those dropping down, even if the overall EXP population remains roughly the same.

It seems AA increasingly wants customers who rarely fly. I increasingly don't see any reason why current AA elites shouldn't oblige them.

VegasGambler

I think they want customers who make them lots of money. I certainly would if I had a business. The source of that money is a secondary concern, if it's a concern at all. That bottom line just needs to grow.

js1993

"Hope people throw money at us" isn't a business plan. Bottom lines rarely grow without deep concern for value, quality, competence, etc., all of which are in decline at AA.

If a person who spends $200,000 on an AA CC is now a more profitable customer than a person who was EXP for almost 20 years from flying (like the OP), then AA is in deep trouble.

EXP100

The airlines have a different business model than they had for decades. Today there's no profit in flying. It's all in retail partners, particularly ccs. So if you want EXP now you will need either spend a lot in flying or start charging like a bull on a co-branded AA cc. Or order 127 of some kind of weird tree.

The days of AA remotely caring about someone spending $10-$15K a year on flying is over. I suspect other airlines are going to lean this way. AA was the airline willing to start the process.

VegasGambler

In the last few years, with quality analytics readily available to just about any company, it's all about computing customer lifetime value. I'm sure that AA did some analysis and found that they were overly rewarding pure flyers and under-rewarding those customers who got them revenue through a mix of sources (and therefore not properly encouraging the behavior that gets them that other revenue). So they decided to fix it.

Undoubtedly covid and the decline of business travel accelerated this decision, but I think it would eventually have happened anyway, and other airlines will be doing the same in the next few years. To me this is the natural evolution of business. I'm not necessarily for or against it (ok I'm in favor of it for selfish reasons -- it's better for me) but, trying to be objective, I think it was inevitable. If the numbers supported it, I'd do the same thing if I ran an airline.

js1993

If there's "no profit in flying," then that means the airlines are only surviving because of loyalty-program breakage, which seems far-fetched. In reality, "there's no profit in flying" because of the same accounting shenanigans that result in Amazon not paying taxes or Hollywood telling us "Titanic" didn't make money.

Few people here would argue AA is better run or more forward-thinking than DL or UA, neither of which have come close to doing what AA is doing with LP or the massively higher elite-qualifying thresholds.

js1993

Those analytics were and are available to DL and UA, neither of which have followed AA's moves. And AA certainly wasn't over-rewarding elites in 2020 or 2021, with elite travel way down and elite perks either drastically cut or eliminated (onboard service, lounges, etc.) or all but impossible to use (SWUs).

The switch to LP is little more than a short-term money grab by AA at a time when flying is still way off from 2019.

VegasGambler

UA's "standard" requirements for 1K are 24k PQP or 18k PQP + 54(!!!) segments. And you can get a max of 10k PQP from CC, which is unattainable for most people (most people cannot get the Presidential Plus card, and the 10k needs $240k spend -- that alone is 20% more then what you need for AA EXP)

EXP is much (much much) easier to attain. Admittedly UA has reduced requirements for this year, but I don't see those being around past this year unless a new covid variant shuts everything down again.

js1993

That's the entire point here.

EXP100

AA is just facing the music earlier. Quite honestly, if your "value" to AA is less than $18K a year in flying and no heavy user of an AA co-branded cc or spending endless hours buying crap on their shopping portal they are just as happy to see you go to another airline.

The world as we've known it here on FT is quickly changing. UA, DL and others aren't going to be that far behind.

VegasGambler

That there's one reduced year? It's still $15k spend this year.

I'd argue that EXP is still easier this year because you should at least get something from partners