American's Latest Promotion

[WingNaPrayer]

AMR Challenges JetBlue With Free-Ticket Promotion



Trying to counter expansion by JetBlue Airways (JBLU) in key markets, AMR Corp.(NYSE:AMR) 's (AMR) American Airlines plans to launch an aggressive promotion today, offering its frequent fliers in New York, Boston, Florida and California a free ticket anywhere American flies in exchange for flying two round-trips in select JetBlue markets this spring, Wednesday's Wall Street Journal reported.

The promotion, timed as New York-based JetBlue begins flying out of Boston today, will mark the first time American has offered a free ticket internationally for just two domestic round-trips. It comes as incumbent carriers face an increasing threat from fast-growing low-cost carriers and now, armed with cost-cutting and efficiency improvements, are trying to strike back.

American will offer its frequent fliers one free ticket in exchange for flying two round-trips to California or Florida from either Boston or one of the three New York City-area airports between today and April 15. Frequent-flier program members who fly four round-trips in that time, which includes the busy spring- break travel season, can earn two free round-trip tickets.

Previously, American and others have aggressively matched JetBlue on price. Other carriers have launched low-fare divisions, such as Song at Delta Air Lines and Ted at UAL Corp.'s (UAL) United Airlines, trying to stem the defection of customers to rival low-fare carriers.


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Clearly AA has driven the final nail in it's own coffin and taken the final step towards bankruptcy.

Now they can REALLY oversell the &$&! out of their planes, especially in FL and not only will a free ticket eventually be earned, but due to the oversales, they'll get a nice, tidy voucher, or two, or three, or five, on top of it!

How the HELL does this airline think it's going to fund something like this? More employee concessions?

The rules are very unclear, and are going to cause a truckload of problems!

 

[Bob Owens]

Jet Blue has seved its purpose. The majors got their concessions, tax breaks etc. Now the majors will simply wipe out Jet Blue like Laker, Peoples Express and all the other upstarts who have gone head to head over the last twenty years.

 

[jsn25911]

Does Jet Blue have a t.v. at every seat area? I hear that Jet Blue offers a lot of comforts.

 

[jimntx]

Jet Blue has seved its purpose. The majors got their concessions, tax breaks etc. Now the majors will simply wipe out Jet Blue like Laker, Peoples Express and all the other upstarts who have gone head to head over the last twenty years.

Bob, there was a time when I think you would have been right, but the world has changed and the idea of AA or UA wiping out Southwest or JetBlue is no longer possible.

Neither AA nor UA has the cash reserves to get into a protracted fare war with people who offer a less costly product as a matter of course. The airlines that AA has managed to run into the ground were trying to compete with AA on product and price--like Braniff and Legend. JetBlue and Southwest don't. Yes, all of them offer transportation from Point A to Point B, but when JetBlue offers a $300 roundtrip transcon fare, they are not losing money like AA does when they try to match or beat that fare.

 

[NewHampshire Black Bears]

WNP, This(IMHO) is going to be a real "bare knuckle donnybrook"

Bob Owens, If I had to bet the "farm", I "nervously" agree with you.

NH/BB's

 

[MAH4546]

This, from today's Miami Herald, is not going to make them any happier:

Neeleman said JetBlue is also considering flying to Miami, though the airline has not yet made a decision and has no time frame in mind.

''Fort Lauderdale is a great market,'' Neeleman said. ``But there are obviously people out there that would rather go to Miami, so we have to take that into consideration.''

Rumours have been flying lately that jetBlue will launch Miami/MIA. Now Neeleman has confirmed they are looking into it. The Miami area has jetBlue's second largest customer base, many of whom will make the long drive from the MIA area to catch a flight at FLL. Soon that may not be an issue. I don't think jetBlue at MIA will be anything more than 3-5 flights to JFK and maybe one or two to Boston, however.

 

[flyhigh]

One think to take note of with this promotion is that it is only available for AAdvantage mbrs. So, it is limited in scope, but does catch one's eye. If you're not already a mbr and book an AA tkt, you're most likely to become one and choose AA on later trips...

 

[NewHampshire Black Bears]

You know, I'M GLAD B6 and AA are "going to go at it", I really am.
Instead of "worrying" what the outcome is going to be, I say "BRING IT ON", and may the best man win.

or

NH/BB's

 

[NewHampshire Black Bears]

This thing with JET BLUE, is "EXACTLY" the kind of "showdown" that (uncle) Bobby CRANDALL would "salivate" for.

Neelman would'nt have "the STONES" to try a stunt like this if ol' FANG were running the show!!

NH/BB's

 

[Bob Owens]

Bob, there was a time when I think you would have been right, but the world has changed and the idea of AA or UA wiping out Southwest or JetBlue is no longer possible.

Neither AA nor UA has the cash reserves to get into a protracted fare war with people who offer a less costly product as a matter of course. The airlines that AA has managed to run into the ground were trying to compete with AA on product and price--like Braniff and Legend. JetBlue and Southwest don't. Yes, all of them offer transportation from Point A to Point B, but when JetBlue offers a $300 roundtrip transcon fare, they are not losing money like AA does when they try to match or beat that fare.

The more things change the more they stay the same.

I agree that SWA will be around for a while. They serve secondary markets and built their route structure that way. AA would probably go broke if they tried to take on SWA.

However Jet Blue went head to head from the get go. Sure they may have low costs, but how long will that last? They are already deviating from their one fleet business plan. Sooner or later their airplanes will need maintenance. AMR could afford to lose money on every flight they run against Jet Blue and make it up on other routes. If AA, Delta, UAL and USAIR all get in on the act JET Blue will be history. The "fare war" would be of limited scope, low fares wherever Jet Blue flies. Everywhere else, normal fares. So while Jet Blue would face a fare war on every route, the other carriers would only face it on a few routes.



Hey NH/BB; How is the AGW drive going up there in Beantown?

the-AGW.org

 

[jimntx]

However Jet Blue went head to head from the get go. Sure they may have low costs, but how long will that last? They are already deviating from their one fleet business plan. Sooner or later their airplanes will need maintenance. AMR could afford to lose money on every flight they run against Jet Blue and make it up on other routes. If AA, Delta, UAL and USAIR all get in on the act JET Blue will be history. The "fare war" would be of limited scope, low fares wherever Jet Blue flies. Everywhere else, normal fares. So while Jet Blue would face a fare war on every route, the other carriers would only face it on a few routes.



Hey NH/BB; How is the AGW drive going up there in Beantown?

the-AGW.org

Hadn't thought of it that way. You may be right. However, I do know that JetBlue has built up a LOT of goodwill with passengers by offering a good product at a low price. I can't say that AA or DAL have done same. And, god knows, US Airways has major public relations problems today.

And, unless AA plays the "there are no seats available on that flight for that promotion" game, how long can they afford to give away free international tickets for just 2 domestic flights?

 

[WingNaPrayer]

People will stock up on the freebies now, then hit AA for their summer vacations to points international at the time of year when AA traditionally makes their bread and butter. They are going to be loosing a lot of summer ass on those planes when the free tickets are firmly planted in the seats AA will wish they could sell instead.

This promo is a dumb idea that will cost a bundle. Top it off with people who will be collecting vouchers left and right for mis connects and oversales due to this promo and use them to upgrade those free tickets to premium cabins, this is a lose-lose promotion - but I expect no less from Carty Junior.

 

[AgMedallion]

People will stock up on the freebies now, then hit AA for their summer vacations to points international at the time of year when AA traditionally makes their bread and butter. They are going to be loosing a lot of summer ass on those planes when the free tickets are firmly planted in the seats AA will wish they could sell instead.

This promo is a dumb idea that will cost a bundle. Top it off with people who will be collecting vouchers left and right for mis connects and oversales due to this promo and use them to upgrade those free tickets to premium cabins, this is a lose-lose promotion - but I expect no less from Carty Junior.

What in the world makes you think that there will be an unlimited supply of free award tix? They'll come out of the same award tix inventory as the normal AAdvantage award seats. Sure, people will eventually get to use them, but don't think for a minute that you can just fly to Hawaii or Europe for a low cost summer vacation. AA isn't that crazy.

 

[orwell]

AMR Challenges JetBlue With Free-Ticket Promotion



Trying to counter expansion by JetBlue Airways (JBLU) in key markets, AMR Corp.(NYSE:AMR) 's (AMR) American Airlines plans to launch an aggressive promotion today, offering its frequent fliers in New York, Boston, Florida and California a free ticket anywhere American flies in exchange for flying two round-trips in select JetBlue markets this spring, Wednesday's Wall Street Journal reported.

The promotion, timed as New York-based JetBlue begins flying out of Boston today, will mark the first time American has offered a free ticket internationally for just two domestic round-trips. It comes as incumbent carriers face an increasing threat from fast-growing low-cost carriers and now, armed with cost-cutting and efficiency improvements, are trying to strike back.

American will offer its frequent fliers one free ticket in exchange for flying two round-trips to California or Florida from either Boston or one of the three New York City-area airports between today and April 15. Frequent-flier program members who fly four round-trips in that time, which includes the busy spring- break travel season, can earn two free round-trip tickets.

Previously, American and others have aggressively matched JetBlue on price. Other carriers have launched low-fare divisions, such as Song at Delta Air Lines and Ted at UAL Corp.'s (UAL) United Airlines, trying to stem the defection of customers to rival low-fare carriers.


***** ***** ***** ***** *****

Clearly AA has driven the final nail in it's own coffin and taken the final step towards bankruptcy.

Now they can REALLY oversell the &$&! out of their planes, especially in FL and not only will a free ticket eventually be earned, but due to the oversales, they'll get a nice, tidy voucher, or two, or three, or five, on top of it!

How the HELL does this airline think it's going to fund something like this? More employee concessions?

The rules are very unclear, and are going to cause a truckload of problems!

Where's your data to support this knee-jerk verdict of doom?


FYI, AA's oversale stats are far superior to the industry average.

Since you whine about oversales, do you also lecture passengers who insist on flexible tickets that can indulge their penchant for no-showing flights?

 

[orwell]

People will stock up on the freebies now, then hit AA for their summer vacations to points international at the time of year when AA traditionally makes their bread and butter. They are going to be loosing a lot of summer ass on those planes when the free tickets are firmly planted in the seats AA will wish they could sell instead.

This promo is a dumb idea that will cost a bundle. Top it off with people who will be collecting vouchers left and right for mis connects and oversales due to this promo and use them to upgrade those free tickets to premium cabins, this is a lose-lose promotion - but I expect no less from Carty Junior.

Have you heard of inventory control? Listening to you, you'd think that every time a member earns a free ticket, he/she displaces someone on an OS list.

Likewise, the "bread and butter" season is not going to be booked at 100% freebies. There are sensible methods of controlling the number of free tickets that are released on any flight. I know you'll start bellowing about what a crock that is for the poor, downtrodden consumers that get the free tickets, but most customers understand that their first choice may not be immediately available when booking a free ticket - whether from this new promotion or whether from the traditional aspects of the AAdvantage program. The fact is, in 2002 AAdvantage members redeemed more than 123.7 billion miles to claim in excess of 4 million awards. This is more awards than were claimed through any other program. In fact, for more than 10 years American’s program has led the industry in award redemptions.

All of that was accomplished while having one of the best OS rates in the industry - and that includes some of the commodity carriers that overbook - if I recall correctly, FL overbooks and recently was in the news along with ASA due to horrible OS rates.

But, you've already enlightened us that this program will be a failure, so I guess we shouldn't bother discussing it.