TRAVEL4SCUBA

17th on a waitlist when 6 were likely already upgraded is diluted. That is way to many elites. They should raise this to 300k LP

nk15

As I explained to you above, the results would have been the same (or worse) for you, had it been 300k.

TRAVEL4SCUBA

You literally make no sense. If you raise the bar you have less elites. I could easily get 300K LP next year just by booking my business hotel trips. I hit EXP in 8 weeks without even really trying. Your statement literally makes no sense.

nk15

Essentially, the elite levels do not matter much in terms of upgrade priority. What matters is the LPs. In your flights above, you had 16 people that had more LPs than you did. This won't change regardless if the EXP level get raised or not. If the EXP level was currently at 300k, you would probably be a PP, and you would still be #17 on the upgrade list, because you simply did not have enough LPs at that moment compared to the competition (the other 16 people above you). It is simple logic.

When you get to 300k LPs, you will be really competitive in tight markets. 200k LPs is simply low in competitive markets for upgrades.

TRAVEL4SCUBA

Rephrase they need to stop handing out LP like candy. I booked a three night stay in Cottonwood Heights UT a few weeks ago, room was $140 per night, got 10K loyalty points for this. Its too easy to get lp / status.

Acidity

While you're correct that elite levels don't really matter for upgrade priority[1], I think the OPs point stands in regards to other parts of the program. AA isn't going to want a program where 50% of elites are ExPlat, and 10% are PlatPro, 10% are Plat, and 30% are Gold (I'm obviously making these numbers up, but they seem relatively in line with my personal experiences on the routes I fly). That's just way too top heavy and they're going to want to better differentiate between their various elites. This is because many elite perks are not able to differentiate between LP outside of the status tiers. A 1 million LP ExPlat and a 200k LP ExPlat both get boarding group 1, they both get 3 checked bags, they both get MCE at booking, and they both get SWUs against the same limited confirmable-in-advance inventory. And while some of these only hurt AA (e.g. checked bags), in others having more competition is worse for the elites as well, such as overly bloated group 1 boarding (which both the OP and I have seen), or difficulties getting MCE even weeks in advance on some routes (I've seen this).

And ultimately, in a world where complimentary upgrades are fairly rare due to better first class monetization anyways, it's these other benefits where AA needs to step up if they want to keep flyers from going free agent.

[1] This isn't fully true, since lame duck status holders can still get upgraded above someone with more rolling LP than them (e.g. a 0 LP ExPlat will get upgraded before a 199k LP PlatPro). Outside of lifetime status (which only goes up to Platinum anyways), I suspect this will be rare enough not to worry about.

355F1

I am based in PHX and have never ever been #17 on any upgrade list.

AB Dada

I have no issue with what they've done. It seems to make sense to me: the most profitable flyers are the ones they want to have the most opportunities for benefits.

Why is an upgrade that big of a deal? If you NEED to sit up front, pay for it. It's not expensive 90% of my flights, I just elect to gamble.

I fly call is 80-120 flights a year, 100% for pleasure. I'm at around 260K LPs. I'm in my 40s, fly out of primarily ORD, weigh under 160lbs (male) at 5'8" and I prefer first class for 3 reasons: faster off the plane, fewer kids and miscreants, and generally some level of customer service (in Y I don't expect ANY service, just safety).

I get upgraded about 70% of the time, I pay for an in-app upgrade 10-20% of the time, and I sit in Y 10-20% of the time. This is fair considering I'm a low revenue EXP -- but I am obviously a HIGHER revenue EXP than someone who flies 120 flights a year for work and doesn't get to use RM for hotels or whatever.

The system works well for what it's intended to do: maximize profit for a corporation, and give benefits to the folks who generate that profit.

Acidity

(Emphasis added)

I agree with your point, but I just want to make a small but very important correction (because I see this confusion on FT a lot): corporations (except startups deluding themselves) don't care about revenue as such, they care about profit. Someone who spends $20k on plane tickets with a 10% profit margin is equally as valuable to AA as someone who spends $4k on hotel stays with a 50% profit margin (as a first approximation; there are a lot of other variables that go into this, such as propensity to spend on AA in the future, etc).

What's really interesting about the LP system is that IMO it represents an evolution beyond revenue based loyalty schemes towards something more akin to a profit based loyalty scheme. Airlines are of course incredibly complex, and so a truly accurate profit based scheme wouldn't be feasible (and even if it were, it'd be very difficult to explain to consumers), but LP serves as a kind of approximation for profitability or is intended to at least.

Of course, for this to be accurate, AA needs to ensure that all sources of profit earn LP at the same exchange rate; if they don't they'll be systematically overvaluing some customers, and undervaluing others.

The OP is assuming that AA gives too many LP to hotel stayers and credit card users relative to flyers, which may be true or it may not; without comparing the $ profit per LP for flying to these other methods (which is data none of us have), we can't say for sure.

AB Dada

Some folks have done the math on airline travel profitability for AA and it's pretty putrid. There is little cash to be made moving people across the country.

But -- it does provide for some interesting lobbying loopholes that all licensed and monitored industries provide.

If I was a bank, I'd rather be one that is heavily regulated like an airline than one that is way way way less heavily regulated like a credit card company.

I *like* that profitable clients get preferred arrangements.

For me, the upgrade part of EXP is the LEAST important part. I don't know why OP thinks free upgrades are that important when app-offers are usually pretty cheap.

For me, getting MCE at booking is worth 5 figures a year (say 100 flights and $60 seats per flight just for me, now throw in family and girlfriends and whatever).

The bonus miles for EXP at 120% is actually pretty decent -- I value those miles only for mileage upgrades but they come in handy -- probably another 5 figures there for me (I fly a lot of holiday trips where F is sometimes $2000-$3000 more than Y for 2 people, but have bought-up mileage upgrades almost 100% success).

Free same day flight change? I use it maybe 10 flights a year -- almost $1000 in value for me.

The list goes on and on. OP is focused on upgrades but is ignorant of all the other value EXP brings to flyers. I figure if I had to pay for those "freebies", I probably would spend $25,000 a year additional -- and I can see myself doing that maybe half the time if I wasn't EXP.

steveholt

If you could easily get 300K LP next year just by booking your business hotel trips, why do you think it'll be harder for anyone else if it's 300K?

Acidity

Indeed, airlines have a long history of going bankrupt, both in the US and abroad. In many countries their only real airline is government owned and a huge loss for them. It's for this reason that I personally don'tthink that AA is systematically undervaluing flyers, though I haven't seen AA's internal numbers, so I'm happy to admit I could be wrong.

Of course, it's an economic truth (by construction, of course) that perfectly competitive industries have no economic profits (i.e. any profits above those required to compensate for the cost of capital and the risk premium. This is not the same as business profits, which is what typically gets reported). And air travel is actually quite competitive; both within the US (where you've got the US3, B6, AS, WN and a bunch of other LCCs/ULCCs) and abroad. Unfortunately for airlines, there's nothing naturally keeping you on the same airline, so they have to compete on fares, which means they'll lower fares to the lowest point they can afford (under normal conditions), which means poor profits.

Airline leaders are starting to figure this out though, which is why they're focusing more on areas where they have monopolies and therefore more pricing power (and thus the ability to actually generate profits), such as AA expanding in DFW, and DL focusing on their core hubs. It's also why loyalty programs are critical to the full service airlines; in many cases the loyalty programs are the only "moat" allowing the legacy carriers some pricing power above and beyond their competitors, especially outside of fortress hubs.

For me at least, I have to book my business hotels through Concur, so I can't use RM or BAAH. For now, I can get EXP on AA solely by my flying (and probably get a fair amount above the 200K, in a normal year). But if I couldn't, or I felt that EXP was too diluted relative to UA, I would consider switching to UA, which (for now at least) doesn't have to worry about hotel stays or CC spenders diluting their elite ranks. If hotel stayers and CC warriors are more profitable to AA than flyers like me though, then AA would happily lose me to UA in exchange for getting someone like TRAVEL4SCUBA.

Acidity

Also one thing that hasn't been mentioned yet: there's several years worth of status extensions from COVID that haven't expired yet. It remains to be seen how much the elite ranks will be culled when those finally expire (March 31, 2023 I think?). The UA and DL forums both report a glut of elites as a result of their corresponding extensions, so it's not clear how much the OP's experience is due to the new LP system, and how much is due to the extensions.

AB Dada

Some of the folks I used to "fly with" (meaning same flight) who I became social media friends with have told me that even though they maintained tier, their lack of LPs shows when it comes to upgrades -- and a bunch I know are dropping from EXP to Platinum next year.

355F1

I just got 70k LPs for a $4,000 hotel stay last month.