American Airlines let go Chief Commercial Officer Vasu Raja, architect of their strategy of chasing away managed business travel. His thesis had been that they were going to fill their planes, and didn’t need to offer companies discounts. They’d make more money, and do so at a lower cost – without the sales teams and special customer service to service those accounts.
The airline was also going to war with travel agencies, reducing their support, pulling the lowest fares from agencies that didn’t use the airline’s preferred booking technology, and had announced a plan that customers who booked through those agencies would no longer earn miles.
Now they’re offering travel agencies commissions again to sell premium fares, and trying to rebuild some of their business travel efforts. They backtracked on ending mileage-earning for agency tickets when the agencies weren’t doing enough business with American through ‘New Distribution Capability’ systems (that often didn’t work right).
And they’re restoring some of the service elements to their small business program.
- Business ExtrAA was replaced by AAdvantage Business
- It represented a two-thirds to three-quarters devaluation
- Points in that program would only be earned for bookings directly with American, not agency bookings
- And they didn’t offer customer service for problems with the program, to any real degree
While they’re not restoring value to the program, they’re making a couple of key changes:
- Earn with AAdvantage Business wherever tickets are booked. Agency bookings are no longer excluded.
- Get customer service over the phone, 7 a.m. – 7 p.m. CT, Monday – Friday, at 877-229-8278
I find the inability to apply AAdvantage Business details to booking for more than one person frustrating, and the need to book with an AAdvantage Citi co-brand business card to gain full earnings in the program.
The one positive of AAdvantage Business is earning a bonus loyalty point per dollar spent on tickets credited to the program. Additional flexibility they will be adding to the program going forward:
- Redeem miles directly from AAdvantage Business, without the need to transfer miles to a personal account first
- Manage trip credits for the business, and redeem for any registered traveler (trip credits belong to the business, not the individual)
- Customize travel policy by traveler or team
- Transfer tickets between travelers “Name change waivers for agency bookings will be available for all program members”
Those are helpful efforts! But the earn rate of this program still pales in comparison to the value offered by Business ExtrAA, sadly.
Useless still for folks who want to travel with no status companions, personal or business.
Great; bring back AAirpass and then we can talk.
I’ll go out on a limb and guess that big corporate TA’s and platforms like Concur and Carlson must have either put pressure on them OR just started steering corporate bookers away from AA.
AA and most other major programs have a problem. They have done their best to kill the golden goose. It wasn’t that long ago I could book round-trip transatlantic AA awards for under 100k in business or even first at times. Now it’s hardly ever available for less than 200k’ish. For those of us that churn and manufacture miles it’s bad but think about those that earn tons of butt-in-seat miles, I’m sure they are totally turned off by the fading fantasy that they could somehow earn enough to vacation in style.
I think you meant American Airlines let go Chief Commercial Officer Vasu Raja, architect of their strategy of chasing AWAY managed business travel.
AA chased away both my business and personal travel because of devaluations to the “award” programs over the years. Now AA is left getting my business when they are cheaper than the alternatives or the only available choice that works for me. In other words, AA lost whatever little remaining “loyalty program” premium they may have been able to get from me previously.
@GUWonder – I guess you don’t fly Delta then since American’s devaluations have been amateurish compared to Delta. Remember a few years back when Delta was at the Freddy Awards and said that if they won an award for anything there then they were doing their job wrong. If they had a decent loyalty program to award loyal members they were doing their job wrong. That pretty much encompasses why I went from a rabid Delta loyalist to not flying them unless at dire need.
Bring back AAirpass and collect millions in higher margin, prepaid corporate travel. AA should simply reverse each of Raja’s and Isom’s decisions to abandon its premium cabin. Easiest PowerPoint slide, ever.
AA’s wizz kid was wrong. They now recognize this and they’re trying to fix the damage. For some, it’s a day late and a dollar short and there’s no going back.
@ Gary — What @Lewis said.
From what it sounds like, it sounds like American Airline F-ed around and now they are finding out the hard way by trying to fix the damage that has been done through them
American Airlines just doesn’t get it. I’m still amazed that investors have stuck with this lame duck c-suite leadership. There is not a single redeeming quality left that would convince me to book an American Airlines ticket again. My last experience through CLT was one of the worst experiences I’ve ever had… I’ve had enough. I’ll connect through Atlanta on Delta.
I’ve said before and I will say it again and again, USAir clowns took over AA and they have destroyed what once was a GREAT airline.
@Christian
Delta was the airline loyalty program in which I first got status and the lead airline in only getting my business when they are cheaper than the alternatives or the only available choice that works for me. In other words, DL lost whatever little remaining “loyalty program” premium they may have been able to get from me previously much earlier than AA. This doesn’t mean I stopped flying these airlines (as I didn’t stop) — it meant that I became more mercenary/transactional in if I would go out of my way (and pay any extra time or money) to fly the carrier instead of another carrier. In other words, they commodified themselves even more than was already the case.
Wayyyyy too little , wayyyyy too late .
Like giving a bandaid to someone who needs a tourniquet. As well said above , the destruction of AAirpass is still mind boggling – customers want to give you non-refundable funds upfront with a chance at breakage falling to the bottom line . I went the UA PassPlus route and couldn’t be happier .