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Originally Posted by donotblink
(Post 35894347)
There's a huge cost to providing the benefits at the 250k level and I wouldn't have been surprised to see them bump it to 300k. They moved it from 200k to 250k for this year. Don't get me wrong, I'm elated. I'm also surprised to see the 20% and 30% kickers sticking around!
Does 250K mean extra SWUs? SWUs theoretically do not cost AA much unless they displace a revenue J/F booking. And with aggressive revenue management, AA certainly tries its best to make sure that no SWU ever clears unless that J/F seat was almost certainly going to go unsold. The incremental cost of one additional J/F meal and a few additional minis of liquor just isn't that much. And remember that, by definition, a SWU can only be used if one has already bought something. I question that any of the benefits provided by AA status cost AA all that much provided AA is smart in its revenue management tactics. In my time as an AA FF, I've had more SWUs expire unused than I've been able to actually use. |
2024 New Loyalty Point Rewards
I see AA sent out an announcement this morning regarding changes to their Loyalty Point Rewards.
The choice of bonus 1000 LPs at 15K makes sense, but the next two choices do not, to me at least. I'm assuming someone would choose bonus LPs to get to the next level quicker, or as a bridge in case of shortfall. But forgoing a potential 60K in bonus miles at 250K in order to earn 50K at 400 seems strange. |
How about rewarding million milers ?
Interesting changes, sure, but how about rewarding million milers like other companies (United, Delta) have done ? They have given their best customers lifetime elite status. I am a 6 million + flyer on AA with no opportunity to earn Loyalty Points through purchases because I live in Belgium and can not get an American credit card, so all my miles come from flying plus some class bonuses. ??
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Originally Posted by fgodden
(Post 35896329)
Interesting changes, sure, but how about rewarding million milers like other companies (United, Delta) have done ? They have given their best customers lifetime elite status. I am a 6 million + flyer on AA with no opportunity to earn Loyalty Points through purchases because I live in Belgium and can not get an American credit card, so all my miles come from flying plus some class bonuses. ??
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Originally Posted by Catbert10
(Post 35896342)
AA views their MM program as forever tainted by the CC miles that used to be counted toward MM status. Maybe in enough years for the credit call MMers to age out AA will reconsider the program.
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Originally Posted by Herb687
(Post 35895941)
What benefits are provided at the 250K level that impose huge cost on AA?
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Originally Posted by WannaTheater
(Post 35896622)
At 250K you can choose any TWO of the following:
If I ever hit 250K LPs, I'd probably go for 2x $250 travel credits. That's real money out of AA's pocket and into mine. Most of the rest is soft-dollar for AA. |
Originally Posted by Herb687
(Post 35896667)
Interesting. After the $250 credit, the charitable donation is the one that probably costs AA the most in real money... except when they're already in an NOL carryforward which is probably pretty often! Admirals Club / FL day passes are interesting but I doubt that they displace too much revenue from sales of same. Wouldn't most 250K LP passengers already be AC members or have FL-qualifying itineraries? The bonus RDMs of course do cost AA a little bit but, as with SWUs, we assume they aggressively yield manage flights in a way so as to avoid displacing actual revenue demand by allowing an award redemption.
If I ever hit 250K LPs, I'd probably go for 2x $250 travel credits. That's real money out of AA's pocket and into mine. Most of the rest is soft-dollar for AA. Wife and I generally get the miles (60K for two choices), as we've been getting more value out of them vs. trip credit of $500 by using miles for partner awards. |
Originally Posted by prathetkrungthep
(Post 35894171)
And the SDC benefit for all members. I think you have to be AS MVPG75k to get SDC on AA. As someone who barely made plat, I am contemplating hopping to AS for this qualifying year now that AS has removed metal requirements and MVPG is a much more attainable OWS status via actually flown miles. I’m already tired of playing the LP game after a year, but these enhancements surely are making me think twice.
Current policy on same-day confirmed seems to treat AA and AS elites with equivalent status the same. It's free for AA Platinum Pro / AS MVG Gold 75k and higher and I don't see anywhere this is changing. https://www.aa.com/i18n/plan-travel/...day-travel.jsp |
Originally Posted by Herb687
(Post 35895941)
What benefits are provided at the 250K level that impose huge cost on AA? I'm not familiar with the 250K benefits because if I ever reach 250K LPs on AA I will clearly have been doing something wrong in my life (I strive to fly AA as little as possible, not as much as possible)
Does 250K mean extra SWUs? SWUs theoretically do not cost AA much unless they displace a revenue J/F booking. And with aggressive revenue management, AA certainly tries its best to make sure that no SWU ever clears unless that J/F seat was almost certainly going to go unsold. The incremental cost of one additional J/F meal and a few additional minis of liquor just isn't that much. And remember that, by definition, a SWU can only be used if one has already bought something. I question that any of the benefits provided by AA status cost AA all that much provided AA is smart in its revenue management tactics. In my time as an AA FF, I've had more SWUs expire unused than I've been able to actually use. As others have pointed out you can also get miles and trip credits that can be up to $500 or more if you also have an AA cobranded credit card. |
Originally Posted by prathetkrungthep
(Post 35894536)
Credit card company operating an airline on the side
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Originally Posted by hhdl
(Post 35897051)
Tell that to Citi, who had their airline analyst on Bloomberg a few days ago to say that his buy recommendations in the airline sector were DL and UA because "the others don't have profitable credit card arrangements with reputable card issuers."
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Originally Posted by HaleiwaFlyer
(Post 35896370)
They can always make a brand new competitive MM program based on LPs; in addition to keeping the current MM program based on the old criteria.
LT Gold: 1 million lifetime miles OR 30 consecutive years of at least Gold status OR 25 consecutive years of at least Platinum OR 15 consecutive years of at least PPro OR 10 consecutive years of EXP/CK LT Platinum: 2 million lifetime miles OR 30 consecutive years of at least Platinum status OR 20 consecutive years of at least PPro OR 15 consecutive years of EXP/CK LT PPro: 30 consecutive years of at least PPro status OR 20 consecutive years of EXP/CK LT EXP: 30 consecutive years of EXP/CK LT CK: 20 consecutive years of CK OR 40 consecutive years of EXP or CK
Originally Posted by WannaTheater
(Post 35896622)
At 250K you can choose any TWO of the following:
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Originally Posted by donotblink
(Post 35897014)
As an FYI SWUs have a book value of about $100 internally at AA and those funds do get allocated to the revenue manager(s) responsible for monetizing those market(s). If a single SWU is applied to multiple flights, the $100 or so gets split between the applicable markets. This isn't published online anywhere to the best of my knowledge, but I have a friend in AA revenue management who told me this.
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Originally Posted by hhdl
(Post 35897140)
More likely than being based on LPs (the only advantage in having a cumulative LP metric over MM with the old card spend is that the card spend mostly benefited (the defunct) AMR, not AAL) would be the "consecutive-years-of-status" qualification method.
LT Gold: 1 million lifetime miles OR 30 consecutive years of at least Gold status OR 25 consecutive years of at least Platinum OR 15 consecutive years of at least PPro OR 10 consecutive years of EXP/CK LT Platinum: 2 million lifetime miles OR 30 consecutive years of at least Platinum status OR 20 consecutive years of at least PPro OR 15 consecutive years of EXP/CK LT PPro: 30 consecutive years of at least PPro status OR 20 consecutive years of EXP/CK LT EXP: 30 consecutive years of EXP/CK LT CK: 20 consecutive years of CK OR 40 consecutive years of EXP or CK It's reasonably clear from those that they value a 250k LP reward at $200 or so (take out the profit margin from the trip credit, or the tax benefit of the charitable donation, half the price of an AC membership for an elite and you get pretty close to $200... they probably can buy the $400-500 (retail at Best Buy) B&O products for about $200 also), which confirms the $100 internal valuation of a SWU. but you can also go for 60k points. thats half of a saver international j award. the cost basis for that has GOT to be well over $400. Heck even if you dont ascribe more fuel burn to premium seats, just the jet A costs more than that for a seat, let alone staff, equipment depreciation, etc. |
Originally Posted by stant
(Post 35897604)
you get to pick two. if you go for the charitable contribution thats 500 clams, 400 after tax deduction.
but you can also go for 60k points. thats half of a saver international j award. the cost basis for that has GOT to be well over $400. Heck even if you dont ascribe more fuel burn to premium seats, just the jet A costs more than that for a seat, let alone staff, equipment depreciation, etc. |
Originally Posted by Catbert10
(Post 35896342)
AA views their MM program as forever tainted by the CC miles that used to be counted toward MM status. Maybe in enough years for the credit call MMers to age out AA will reconsider the program.
[Or, given everything else, just admit that big CC spenders make more for them and count the miles at some reduced rate going forward?] |
AA is also conveniently closing the loophole for duplicate/fictitious hold bookings by requiring AAdvantage account/number for 24 hour holds.
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Originally Posted by hhdl
(Post 35897757)
The costs you list do have something in common: they're 99+% the same whether the seat gets filled or not. The marginal cost of an extra body and their baggage across the Atlantic is low-/mid-three figure dollars (that's basically what airlines sell/barter partner one-way J awards to each other for... this accounting of having the FF programs buy awards at not much more the marginal cost also creates the fictional facts/factual fictions about the relative profitability of the metal tubes business vs. the bank customer acquisition business (the God's honest truth: it ain't that simple)).
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Originally Posted by nowayout203
(Post 35897894)
AA is also conveniently closing the loophole for duplicate/fictitious hold bookings by requiring AAdvantage account/number for 24 hour holds.
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Originally Posted by WannaTheater
(Post 35898373)
Is this speculation, or fact?
AAdvantage number. |
Originally Posted by nowayout203
(Post 35898579)
possibly a bit of both. Only AAdvantage members will be able to use 24 hour holds in the near future. The speculative part is that they’ll likely enforce that by requiring the member to login (which will populate their member number in reservations). By design and from experience, AA will prevent identical reservations for the same
AAdvantage number. What will happen is if you have duplicate reservation on hold then one (or possibly both) has always been subject to cancellation when the system does overnight sweeps. So requiring an AA# on the reservation in order to put it on hold isn't going to change anything in this regard. |
Originally Posted by donotblink
(Post 35897014)
As an FYI SWUs have a book value of about $100 internally at AA and those funds do get allocated to the revenue manager(s) responsible for monetizing those market(s). If a single SWU is applied to multiple flights, the $100 or so gets split between the applicable markets. This isn't published online anywhere to the best of my knowledge, but I have a friend in AA revenue management who told me this.
As others have pointed out you can also get miles and trip credits that can be up to $500 or more if you also have an AA cobranded credit card.
Originally Posted by hhdl
(Post 35897757)
The costs you list do have something in common: they're 99+% the same whether the seat gets filled or not. The marginal cost of an extra body and their baggage across the Atlantic is low-/mid-three figure dollars (that's basically what airlines sell/barter partner one-way J awards to each other for... this accounting of having the FF programs buy awards at not much more the marginal cost also creates the fictional facts/factual fictions about the relative profitability of the metal tubes business vs. the bank customer acquisition business (the God's honest truth: it ain't that simple)).
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Originally Posted by JFKLAX321
(Post 35898908)
The "book value" of an SWU has nothing to do with the real value of an SWU. People will value each of these awards very differently. I couldn't imagine picking anything other than SWUs, but I get a lot of value out of them--certainly more than $125 (half of trip credit) / 15k miles (half of miles credit) worth. I can see how others wouldn't though. And that is why it's nice AA offers choices.
Agree with all of this. You also have to keep in mind that AA doesn't value miles based entirely on what well-informed, value-minded flyertalk members redeem miles for. They value the miles in the aggregate, taking into account how everyone redeems their miles. Most people don't redeem wisely, and that means the overall liability of miles is much less than that of a cherrypicked scenario when someone redeems a one-way in J to Europe or Asia for under 100,000 miles (which--at least from the west coast--takes work to find). |
Originally Posted by donotblink
(Post 35899754)
I 100% agree with you, I personally value SWUs around $500--I'd buy them at $100 all day long if I could. That being said, I was responding to someone who IIRC said SWUs cost AA nothing, and I wanted to let them know that they do in fact have a book value to AA.
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Originally Posted by donotblink
(Post 35899754)
I 100% agree with you, I personally value SWUs around $500--I'd buy them at $100 all day long if I could. That being said, I was responding to someone who IIRC said SWUs cost AA nothing, and I wanted to let them know that they do in fact have a book value to AA.
Bottom line: moving $100 in funny money from one pocket to another via transfer pricing wouldn't impact AA's cash flow. As for what I would pay for an SWU? Different question entirely. Depends on one's willingness to travel in Y. If one is completely unwilling to fly in Y, then an SWU only has value to the passenger if it can be confirmed at time of booking. |
Tell you what, I for one find tremendous utility/value in SWUs and I do not care one iota whether they have any "cost" to AA.
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Originally Posted by beachfan
(Post 35893362)
if the 5 day holds on awards are going away, it’s a net negative. I font know why they would announce it otherwise, there already is a 24 hour hold on paid fares.
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Originally Posted by donotblink
(Post 35899754)
I 100% agree with you, I personally value SWUs around $500--I'd buy them at $100 all day long if I could. That being said, I was responding to someone who IIRC said SWUs cost AA nothing, and I wanted to let them know that they do in fact have a book value to AA.
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Originally Posted by Mr. BoH
(Post 35900508)
Would 5-day award holds going away even be a big negative? Couldn't you just book an award and then cancel it within 5 days (or even later) with no penalty?
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Originally Posted by JFKLAX321
(Post 35900557)
Not if you don't have the miles yet. It's less of an issue with AA since there aren't many transfer partners, but there are situations where it could be useful (e.g., Marriott transfers).
it would be less of an issue if the return of mikes and taxes worked automatically 100% of the time; for me, it’s only 80% and follow up required the rest of the time. |
Originally Posted by JFKLAX321
(Post 35900557)
Not if you don't have the miles yet. It's less of an issue with AA since there aren't many transfer partners, but there are situations where it could be useful (e.g., Marriott transfers).
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Originally Posted by Mr. BoH
(Post 35901045)
That’s a fair point. I am usually in a spot where I have more AA miles than I can quickly use, so I was not thinking of that angle. Are the transfers not instant? If not I can definitely see the appeal.
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Did it a couple of days ago to have my flight appear as AA in the app and it worked seamlessly
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Originally Posted by JFKLAX321
(Post 35906698)
Marriott transfers to AA, last I checked, take 2+ days, so that's one instance where the 5-day hold could be useful. Bilt transfers are instant, but not sure that many folks have significant stockpiles of Bilt points (I use it for 2x points on Lyft , on top of the 10x points I earn with CSR, but don't have the credit card). And being awash in AA points is a good place to be, Mr. BoH. I also have plenty, but as others above mentioned, it's much easier to let a hold expire (or cancel it) than to actually book and then cancel and then have to message or call to get miles redeposited (it randomly won't refund miles automatically for me, probably 10% of the time, and never if the trip is close at hand).
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The upgrade buyouts accumulating LPs will kill upgrades as folks traveling on company paid tickets take the offers. It is the new mileage run! I will use it for sure.
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Originally Posted by PepeBorja
(Post 35916178)
The upgrade buyouts accumulating LPs will kill upgrades as folks traveling on company paid tickets take the offers. It is the new mileage run! I will use it for sure.
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Originally Posted by PepeBorja
(Post 35916178)
The upgrade buyouts accumulating LPs will kill upgrades as folks traveling on company paid tickets take the offers. It is the new mileage run! I will use it for sure.
Originally Posted by LovePrunes
(Post 35916307)
if being on a company paid ticket is the reason to accept the buyup of an upgrade, why aren't those people already buying up on the offers? They want a few more hundred or maybe a couple thousand LPs and miles more than they want to sit up front when they used to turn them down? Sorry, im not agreeing that this change is going to sell out the front cabin suddenly. At All.
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Originally Posted by JJeffrey
(Post 35891858)
I think you misread what is changing about AC day passes.
Previously anyone could buy a day pass, even folks who were not AAdvantage members. With this change now you must be an AAdvantage member to buy a day pass. So in theory this should reduce the number of day pass users, although in reality there probably won't be any noticeable change as I'm guessing a large % of folks buying passes were already members. And of course nothing is changing regarding club crowding, so if a club is crowded they will just restrict day pass use like they always have. |
Originally Posted by PepeBorja
(Post 35916178)
The upgrade buyouts accumulating LPs will kill upgrades as folks traveling on company paid tickets take the offers. It is the new mileage run! I will use it for sure.
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