Value of Airline Loyalty

[bburns]

I have recently been questioning the value of my loyalty to American Airlines. I'm typically a Platinum level traveler and have over 1.3M miles with AA. I typically use my Award miles for vacation travel with the family. But over the past couple of years I have been finding it more and more difficult to book travel with my miles, especially with the Economy saver option. There are typically seats available for 40K to 50K, but that requires way more miles then I accumulate in a year or even several years. I always start looking at the maximum days in advance, but over the past 18 months I have now found a single day that offered seats at the 25K level for the destination that I usually travel too. I typically check once to twice per week. This really makes me wonder why I bother. My company really wants me to change to their preferred airline.

Also the benefits offered to gold/platinum members seems to be diminishing, so even less compelling of an argument. Frankly, the last several trips I have taken have been a nightmare due to cancelled flights because of mechanical problems and the service being provided has degraded noticeably.

 

[dash8roa]

In years past, I found AA better than US and UA in finding seats on or near my dates. Haven't checked since the merger but at least they have not started to charge an award processing fee as did US.

 

[SOA2]

You are right to question loyalty to AA. I've been platinum level (or gold at US Airways pre-merger) for over a decade but that comes to an end on 02/28/17. Post-merger program changes have made it impractical and expensive to maintain this level. In addition elite level benefits have been meaningfully reduced. The heck with it. I'm finally going to use my 1.5 million+ miles and quit chasing elite status.

 

[jimntx]

One of the nice things about a free market democracy is that we have choices. I'm not trying to be snarky, but I doubt you will find another airline loyalty program, such as AAdvantage, that is all that different from the AAdvantage program. One possible exception might be the loyalty programs on foreign airlines that are subsidized by their governments.

AA has a gigantic corporate liability with the number of miles currently being carried on the books in the earned category. When it first started it seemed like a great idea, but limits are having to be placed because the airline could be in serious trouble if all those miles got cashed in at one time. Yes, I know you earned them, but flying planes around with nothing but rewards passengers on them can get very costly.

Just the number of Executive Platinums, those who fly more than 100,000 miles/year, is staggering.

 

[bburns]

You are correct it is a free market and that is why I'm questioning my loyalty to AA. For years (since 1983), AA earned my business travel dollars precisely because of the AAdvantage program. If it were not for the business traveler like myself, the premier Airlines would have succumbed to the discount airlines a long time ago. While I understand that the award travel is a liability on their books, they had better keep their paying customers happy. If the devalue the benefits enough, then they will loose those valued business travelers as there is no longer a compelling reason to choose AA. It is precisely that short sightedness that can destroy a company's future. I would also venture to say that the devaluation of benefits has led to fewer business travelers selecting AA and thus requiring them to devalue the benefits more...a self fulfilling prophecy.

I used to be able to argue that AA service was superior to other carriers, but I can no longer do that as I have experienced a sharp drop in overall customer experience in the past few years. I believe much of this came about with the acquisition of US Airways. IMHO that merger has not gone smoothly and the quality has dropped noticeably.

In the past 2 months I have had two very disastrous trips that were both related to cancelled flights due to airlines issues (not weather). One of the trips I was transporting my elderly mother and a 3-hour trip turned into a 12 hour trip. I had booked first class to try to insure as pleasant of a journey as possible for my mother and notified AA (at least 4 times prior to departure date) that she would need assistance as she is not ambulatory. I could go in to a long lengthy recount, but I'll just say this: worse trip ever and AA failed at every turn!!! Very disappointing

I am sure I'm not the only business traveler whose company is pressuring them to fly on their preferred carrier. I also guess I'm not the only AA frequent flyer who has noticed the decline in service and the devaluation of Award miles. So they should take notice, before it is too late, as they can be easily replaced. It is not like there is another airline that has risen to take AA place, it is more that AA has sunk to a level that no longer differentiates itself from the pack...so cheapest wins.

 

[AANOTOK]

All one has to do is see the millions in stock Parker and his "money grab' buddies are cashing in monthly or every other month to realize it's not about you, the employee or anyone else. If the money is flowing and filling the personal coffers, and why shouldn't it be, the options are limited, then things must be good in the Ivory Towers. The heck with the employees and the customers. Things are real good!

 

[Rogallo]

"It's good to be the King"

 

[xUT]

You are correct it is a free market and that is why I'm questioning my loyalty to AA. For years (since 1983), AA earned my business travel dollars precisely because of the AAdvantage program. If it were not for the business traveler like myself, the premier Airlines would have succumbed to the discount airlines a long time ago. While I understand that the award travel is a liability on their books, they had better keep their paying customers happy. If the devalue the benefits enough, then they will loose those valued business travelers as there is no longer a compelling reason to choose AA. It is precisely that short sightedness that can destroy a company's future. I would also venture to say that the devaluation of benefits has led to fewer business travelers selecting AA and thus requiring them to devalue the benefits more...a self fulfilling prophecy.

I used to be able to argue that AA service was superior to other carriers, but I can no longer do that as I have experienced a sharp drop in overall customer experience in the past few years. I believe much of this came about with the acquisition of US Airways. IMHO that merger has not gone smoothly and the quality has dropped noticeably.

In the past 2 months I have had two very disastrous trips that were both related to cancelled flights due to airlines issues (not weather). One of the trips I was transporting my elderly mother and a 3-hour trip turned into a 12 hour trip. I had booked first class to try to insure as pleasant of a journey as possible for my mother and notified AA (at least 4 times prior to departure date) that she would need assistance as she is not ambulatory. I could go in to a long lengthy recount, but I'll just say this: worse trip ever and AA failed at every turn!!! Very disappointing

I am sure I'm not the only business traveler whose company is pressuring them to fly on their preferred carrier. I also guess I'm not the only AA frequent flyer who has noticed the decline in service and the devaluation of Award miles. So they should take notice, before it is too late, as they can be easily replaced. It is not like there is another airline that has risen to take AA place, it is more that AA has sunk to a level that no longer differentiates itself from the pack...so cheapest wins.

You need to reduce your expectations in relation to the market.
This is a new and brave world.
Like it or not.
xUT

 

[eolesen]

AA could care less about customers. BBurns, my suggestion is you take your current status and ask for a match on your company's preferred airline. You won't have to make excuses for why you're flying out of policy, and I'll guarantee you that unless your company's preferred carrier is Frontier or Spirit, you're going to get the same level of service.

I was an Executive Platinum five years in a row, and then stopped flying AA right after I earned my Million Mile status with AA in 2014.

Guess how many times AA has reached out to me to find out why I stopped flying as much as I used to?...

I switched my paid flying over to United, and found the service as good if not better than pre-merger AA. The only downside to switching was I had to give up flying on BA and CX. LH took some getting used to...

 

[bigjets]

Around 1999, AA took out rows of seats (which equals revenue lost) to give EVERY passenger a few more inches of legroom, of course AA charged more for the seats, and of course the passengers went to our competitors proving that the only thing the passenger cares about is the price.

 

[bburns]

Around 1999, AA took out rows of seats (which equals revenue lost) to give EVERY passenger a few more inches of legroom, of course AA charged more for the seats, and of course the passengers went to our competitors proving that the only thing the passenger cares about is the price.

This is obviously not true, as AA is still in the top 2 of domestic carriers and transports the most passengers domestically (at least in 2015). There may have been a momentary blip in AA's seat occupancy, but one could argue the big lost in occupancy 1999 was due to the pop of the internet bubble and then 911. I'm sure the AA exec's were selling that story that drop in revenue was due to reduced seats...rarely believe an exec when they are trying to cover their A** What percentage of a seat value do you think represents the total cost of the flight? If you think it is close to Total cost/number of seats as your post suggests, then you are sadly misinformed.

Again business travelers are less sensitive to ticket price as they are typically not paying the cost themselves, so their primary motivation is flight schedules and provided service. Without business travelers AA would be out of business.

BTW the increased legroom that was added in the late 90's was virtually undetectable...more marketing hype than real change

 

[IORFA]

Um, MRTC was noticeable.

 

[bigjets]

This is obviously not true, as AA is still in the top 2 of domestic carriers and transports the most passengers domestically (at least in 2015). There may have been a momentary blip in AA's seat occupancy, but one could argue the big lost in occupancy 1999 was due to the pop of the internet bubble and then 911. I'm sure the AA exec's were selling that story that drop in revenue was due to reduced seats...rarely believe an exec when they are trying to cover their A** What percentage of a seat value do you think represents the total cost of the flight? If you think it is close to Total cost/number of seats as your post suggests, then you are sadly misinformed.

Again business travelers are less sensitive to ticket price as they are typically not paying the cost themselves, so their primary motivation is flight schedules and provided service. Without business travelers AA would be out of business.

BTW the increased legroom that was added in the late 90's was virtually undetectable...more marketing hype than real change

As a 6'3" man I can tell you the extra legroom was noticeable, that's why the big airlines have a couple of rows of extra legroom and charge more for them.

It was the executives of AA that decided to take seats off of the aircraft, and then put them back, so saying that they were using that as an excuse by blaming themselves doesn't seem accurate.

Saying less seats on an aircraft doesn't effect revenue, just doesn't seem to add up either. I will say that business travelers are a big part of AA bottom dollar, as an employee I can tell you the importance of the business traveler is stressed to us on a daily basis.

 

[bburns]

Which do you think was the bigger reason for fewer passengers in the early 2000s: higher seat cost, Internet bubble bust or 911. For the business traveler it was most definitely was the Internet Bubble bust. I would venture to guess that 911 was a bigger factor than increased seat cost.

I did not say reducing seats did not effect revenue. I was merely pointing out that seat revenue is not as big of the piece of the pie as most would think. AA gets more than 20% of its revenue from cargo and that is why they have started adding all the extra baggage fee, because bags consume valuable cargo space. The bigger reason is that most flights to not fly at max capacity. They typically have been in the 70% to 85% full range according to airline data, which means that you could have removed 15% of the seats (which they did not) and still made the same revenue. In some cases, removing the seats allowed them to fly with 1 fewer flight attendant so it actually saved them money.

So again, I say that removing seats caused them to loose a measurable amount of revenue is BS. I just don't buy into the conspiracy that removing a handful of seats had a significant impact on their bottom line. Sure that is what they would like everyone to believe, but the facts do not bear it out.

 

[bburns]

Um, MRTC was noticeable.

Yes I was over simplyfing When they first introduce it, I was still disappointed in how little extra it was. My big complaint then and still is that I often cannot open my laptop on the drop down table, especially if the person in front of me has reclined their seat.