AAdvantage President Bridget Blaise-Shamai appeared on the latest American Airlines employee podcast Tell Me Why which is also uploaded on several public podcast hosting sites.
American’s New 75,000 MIle Platinum Pro Elite Tier Works
US Airways had a 75,000 mile elite tier as a legacy of their merger with America West — America West’s top level was at 75,000 miles while the top US Airways elite level had been 100,000 miles. Instead of choosing one or the other US Airways Dividend Miles became the first US airline program with four elite levels.
American adopted the US Airways model and it certainly makes sense to incentivize travel beyond 50,000 flown miles for customers that won’t hit 100,000 miles.
Bridget reports that the level has met “with great success” in changing consumer behavior, shifting wallet share to American over other airlines.
ConciergeKey Improvements Had to Wait on Technology
American’s ConciergeKey had largely been an unpublished VIP level for years. A year and a half ago they made it effectively the new top elite tier with upgrade and wait list priority and public recognition at the boarding gate. She explains that to get there they “had to do some technology” to separate them from Executive Platinums.
I’d rather be a ConciergeKey member than a Delta 360 or United Global Services member at this point.
Award availability is Getting Better
The percentage of American’s seats occupied by award customers is lower than that of competitor airlines and has been declining ever since US Airways management took over at the airline. American has been filling about 6% of seats with awards compared to nearly 8% at United and Delta and 13% at Southwest.
She acknowledges that “we had moved to a point on availability that really wasn’t commensurate with the size of our loyalty program.” She underscores that “today” (with vocal emphasis) “we have only two price points that allows our customers to use their miles to use their ticket.” I worry about American adding redemption price levels between current saver and anytime awards and becoming even more revenue-based than their approach to offering married segment availability for coach tickets has become.
Indeed, saver and anytime awards are described as not “ideally work[ing] for the customer and does not ideally work for American.” In fact capacity controls and last seat availability awards do work for the customer — the airline just has to release award space as they used to and price extra availability appropriately.
It should work for the airline considering the billions of dollars the program is driving for the business. What doesn’t work for the customer is continuing to squeeze cost out of providing a return on past loyalty in accumulating miles.
That said American’s award availability – at least domestic coach award availability — has gotten better, in her words “the last few months we are on a path towards putting our availability much more closer to the competitive levels of like a Delta or a United.” I just wish United and Delta levels of availability weren’t seen as the goals to shoot for.
Premium Economy Awards and Upgrades are Coming
American offers premium economy on much of their international fleet, and by all accounts it’s been a positive development for the airline upselling customers without trading off with business class sales.
A domestic first class experience between coach and business class is great for customers, except that it’s means in some cases fewer business class seats on planes and retrofits have also taken away from ‘Main Cabin Extra’ coach seats with more legroom.
To date it hasn’t been possible to upgrade into premium economy. Economy upgrades are to business class. It hasn’t been possible to use miles for premium economy. When that changes hopefully it will become possible to redeem for awards in premium economy on American’s partners like British Airways, Qantas and Japan Airlines as well.
Bridget says that “we certainly have it in our plan to allow our customers to use their miles to purchase premium economy and to upgrade into premium economy… time to market still being worked on but it is certainly going to happen.”
I expect that upgrades to premium economy will not be good for upgrades from economy to business, and that award pricing for business class could increase in order to make room for a meaningful difference between coach and premium economy and between premium economy and business class awards.
American Airlines Premium Economy, Boeing 787-9
Inflight Credit Card Solicitations are Win-Win-Win
Citibank has all marketing channels for the AAdvantage co-brand except for inflight and inside of airports (except for within 100 feet of an American club). Barclays has those other channels, and hasn’t done tabling in airports to pitch cards, in airport they’ve only done advertising. If I were them I’d be more aggressive given the limited acquisition space they have.
Customers frequently dislike the inflight pitches stopping inflight entertainment, waking customers from sleep, sometimes the information given by flight attendants in their pitches is inaccurate.
Flight attendants “go through a modest training to become certified” to offer the card inflight. “This is a win for our employees, for our customers, and for our company because on any given flight we know that on average 87% of customers are flying their only time in 12 months so by and large when our flight attendants are having the marketing message folks on the plane are hearing it for the first time and maybe for the only time the whole year.”
Barclays AAdvantage Credit Card Gate Activation
Here’s the full discussion:
Has availability really gotten better? Seems to me they have just added a higher mileage ticket on the return flight
Does this “President” ever listen to the actual credit-card sales pitch to ensure that the FA’s are accurately describing the benefits?
I would rather choose UA GS over AA CK when it comes to benefits, especially with all the unpublished benefits that GS members get. I don’t think AA allows anything close to what UA does for their GS members such as allowing upgrade instruments on award tickets.
87% of AA flyers only fly one segment a year? That’s surprisingly high.
Factoring in American’s $75 close in ticketing fee makes the miles worth even less as I frequently book last minute.
I am sure that 87% number refers to itineraries (including round trips), not segments.
That high number would explain why they continue to strip the loyalty program of benefits and awards. The PE upgrades will surely be to devalue the systemwide upgrades, as well.
@Kevin “That high number would explain why they continue to strip the loyalty program of benefits and awards.”
Chicken or egg? I’d guess it’s more of a death spiral. They cut loyalty benefits and see a decline in loyalty. The decline in loyalty is thereby used to justify more cuts and so on.
Gary, is the “% of award seats” metric based on journeys or on segments? If it’s segment based, just implementing the married segment rules would increase the %, even if the number of redemptions remained constant.
“I’d rather be a ConciergeKey member than a Delta 360 or United Global Services member at this point.”
Just curious how you’ve arrived at that conclusion. I’ve read through the entire post at least twice and couldn’t find much rationale. Although I haven’t experienced GS myself, it seems that they provide a lot of flexibility in terms of wait listing upgrades into far easier buckets, or “creating” award space.
This benefit alone should be at least as valuable as the 2 extra SWUs on the AA CK side.
@Kevin, I am pretty sure that’s the case as well and was really trying to call her out for suspicion of improper use of statistics. For her statement to really be accurate (that by and large folks are hearing the message for the first time and maybe for the only time all year), you’d have to believe that 87% referred to one-segment per year flyers. Fly one round-trip, two segments per direction and you’re hearing the message 4 times in a relatively short time span, obviously. I’m sure she’s just using that stat to convince herself (or others) that it’s not a bother to anyone.
I also wonder whether the stat is 87% of a given planes occupants are one-time per year flyers, or that 87% of passengers that fly them in a given year have a frequency of 1. I would suspect it is the latter which would support the notion that the mix of repeat flyers on a given flight is much higher than 13%. That would mean much more than 13% of passengers on a given flight have heard the marketing pitch repeatedly. I just think she’s full of BS and that the pitches are really freaking annoying.
@Matt B – Well yeah, it’s all BS meant to generate profit and seem like justification for the annoyance to the frequent flyers. Same with the addition of the ‘feature’ of upgrading to premium economy, that will just be a way to devalue systemwide ugprades for Executive Platinums. It’s all PR spin meant to make you think you’re getting more when you’re really getting less.
The 87% of passengers are those who do not fly more than once a year. I believe it’s incorrect to say that 87% of people on a given flight only fly once a year. It’s a mistaken use or misunderstanding of the statistic (which AA has shared in the past).
“on average 87% of customers are flying their only time in 12 months”
That certainly explains the plethora of “gate vultures” who crowd the gate as soon as the flight is announced, or try to push through when deplaning…..
I can’t wait to see what price point the premium economy awards will be and how much availability there will be.
Is the AAdvantage president really that clueless or lying? This statement is completely BS,
“She underscores that “today” (with vocal emphasis) “we have only
two price points that allows our customers to use their miles
to use their ticket.”
The old AA had 2 price points. Once US got hold of them, they added multiple AAnytime levels including the asterisk level that can be practically be anything. Some AAnytime awards are priced at criminal levels.
rrgg: I think she meant AA had two AAward categories: sAAver and AAnytime. AAnytime is dynamically priced but it’s all still AAnytime award.
AA’s first class award availability is a joke, You check availability to Sidney and it shows first class availability from SJC but only to LAX, what a scam. Who would want that? Considering they just paid a fine of 45 million dollars, think about it!
What’s criminal is that American is letting planes go out with NUMEROUS empty seats, in both First and Economy, and yet there’s no SAAver level availability when looking to book only a couple days before the flight. Only option is AAnytime. It’s just ridiculous they would rather a seat go empty than give their members the opportunity to book flights last minute at the SAAver level . Especially since they charge the $75 close-in booking fee on top of the AAnytime pricing. Easy to see why AAdvantage receives so much ridicule.
You watch AA will go revenue based very very soon. Have a bad feeling. They will sell it as how they are doing us all a favor by making seats or even all seat available all the time but…..for what price.
I find all these circumspect and philosophical comments amazing. Their own statistics and the experience of a person who even occasionally looks for a saaver award is that they are virtually non existent. How many of those 6% rewards seats are domestic round trips for 90K miles or international bus class one way for 135K? What good is a freaking 60K or 70K signup bonus when it won’t even buy you a single round trip on a desirable itinerary. Let’s not even talk about the shell game of making every North Atlantic saaver award a one stop trip. Try to book from the gateway and you get another one stop through another gateway. All you people hoping to see value from premium economy are delusional. The most likely outcome is that those seats will require the miles that biz does today and biz will require the current First Class miles. The program is an absolute fraud. Bridget is at best disingenuous, if not an outright liar.
AA could allow using half an SWU to upgrade from Y to PE or from PE to J, to maintain one SWU to go from Y to J. They could.
They could have FA tablets identify once-a-year flyers and have an FA hand them a pamphlet about the CC offer, and not blare it over the PA.
They could start making first and business class seats available for SAAver awards on flights that appear to have empty seats. They could relax the four-segment maximum for international awards, that often makes it impossible to book a domestic flight home from an international gateway.
I’m not mad at all at American I simply don’t fly them anymore
After 25 years I’ve moved on
They were willing to get stingy on saver awards to the point of no return
Comparing themselves to Delta and United? That says it all
they are spineless and have no brand identity at all.
After all these years they are an embarrassment and failure of an airline holding only because of a monopoly in some markets
This morning the FA announced that, “our flight number has been selected to receive an EXCLUSIVE 50,000 bonus miles offer…”
@OtherDave what was you flight number. Today’s special was supposed to be the 10,000 mile offer. Heads will roll.