In May 1981 American Airlines launched the world’s first airline loyalty program offering free flights. Days later United Airlines announced a similar program.
These weren’t the first ‘frequent flyer programs’ – Texas International introduced a mileage-based program in 1979. Western Airlines Travel Pass, in 1980, offered $50 off every 5 trips. But AAdvantage was the first airline loyalty program to offer free flights. And they offered upgrades to first class, too.
I’ve often said that frequent flyer programs are the most successful marketing innovation in history. For most businesses, marketing is an expense line. For major airlines, they’re a profit center. The motivation of free travel is so great they are able to rent out their brands and currencies to partners. The biggest source of cash is banks through co-brand credit cards.
The very first one of those was the Continental TravelBank Mastercard from Marine Midland Bank, however a year later Citi and American Airlines introduced both a MasterCard and Visa, each with $50 annual fees (waived for the first 6 months). The initial bonus was 5000 miles: 2500 on approval and 2500 with first purchase.
And now that American AAdvantage is about to turn 40, they’re celebrating in April leading up to this milestone with an instant win game offering American Airlines and partner prizes at AAdvantage40th.com.
Instant Win Game
American will have new content each day, hoping to bring you back with a new opportunity to enter their sweepstakes and possibly win a prize instantly. They’ll be marketing to you “fun facts about American, AAdvantage or our partners, learn about a new way to earn or redeem miles.”
Here are the big sweepstakes prizes:
- 40 Grand Prizes: 1 million AAdvantage miles which they value at 2.24 cents apiece ($22,400) for tax-reporting purposes. If I win I’ll argue for a lower valuation when I report it.
- 1 Second Prize: 2-Night Travel Package For 4 People To Arnold Palmer’s Bay Hill Club & Lodge In Orlando, Florida including 1 room for 2 nights which must be used by December 31, 2021 and $1000 in American Airlines gift cards. The prize is valued at $3500 for tax-reporting so they’re viewing the stay as $1250 per night. It’s easy to value this yourself for taxes.
Here are the instant win prizes:
|200||(1) 1-year Admirals Club membership||$650.00||1/person|
|35,000||Four thousand (4,000) AAdvantage Miles||$89.60||2/person|
|7,500||(1) Admirals Club Day Pass||$59.00||2/person|
|1,300||(1) Mastercard $20.00 digital gift card||$20.00||1/person|
|230,000||(400) AAdvantage Miles||$8.96||Unlimited|
|500,000||(40) AAdvantage Miles||$0.90||Unlimited|
|45,500||(1) American Airlines Preferred Seat Upgrade for one||N/A||Unlimited|
|22,500||(1) American Airlines Main Cabin Extra Seat Upgrade||N/A||Unlimited|
|20,000||Spend $40 On A Dine, Earn 400 Bonus Miles from AAdvantage Dining||N/A||1/person|
|5,000||Spend $40 with AAdvantage eShopping, Earn 400 Bonus Miles||N/A||1/person|
|75,000||(1) complimentary Upgrade at Hertz (Compact Thru Full Size) + 3X Miles via a special URL with Hertz||N/A||1/person|
|25,000||10% off Weekly Car Rentals in Sunny Destinations (FL, HI, AZ, Vegas) + 2X Miles with Dollar Rent a Car||N/A|
|75,000||(1) digital code redeemable for up To 30% Off + Min 500 Base AAdvantage Miles with Budget Rent a Car||N/A|
|75,000||Complimentary One-Car Class Upgrade + Min 500 Base AAdvantage Miles with Avis Car Rental||N/A|
|50,000||10% off Weekly and Weekend Rentals + 2X Miles with Thrifty Car Rental||N/A||1/person|
|50,000||15% Off; (1) HD SimpliCam Camera and (1)month of professional monitoring with SimpliSafe||N/A||1/person|
|50,000||Get 90 Days Free + Up to 25% off Your First Year of LifeLock Identity Theft Protection (Plus Bonus Mileage* Earned On Membership Purchase)||N/A||1/person|
|50,000||(1) digital code redeemable for “20% Off Hyatt Participating Properties”||N/A||1/person|
|75,000||20% off sitewide with FTD||N/A||1/person|
|40||Two (2) consecutive nights’ accommodations (single room, double occupancy) at the “Park MGM Las Vegas” for two (2).||$225||1/person|
What The AAdvantage Program Was Like 40 Years Ago
The original code name for the project that became AAdvantage was ‘Loyalty Fare’ because the original task was to come up with a frequent traveler discount. The team under Senior Vice President of Sales and Marketing Tom Plaskett quickly realized that any discount fare would be matched, and they were looking for a way to keep customers loyal and coming back to them.
AAdvantage was initially introduced as a promotion, and wasn’t made indefinite until April 1983 two years into its life. It wasn’t obvious at the start how big this would become.
The original AAdvantage charged 12,000 miles for a first class upgrade (there were no capacity controls). 50,000 miles was a first class roundtrip ticket, and if you bought a coach ticket for a companion it came with an upgrade, too. Two first class tickets were 75,000 miles.
A year later British Airways awards were added: 20,000 miles for an upgrade from first class to Concorde or 40,000 miles for an economy roundtrip between the U.S. and London for two passengers.
Elite status – AAdvantage Gold – was introduced in July 1982.
American’s first hotel partner was Hyatt, so the new American-Hyatt partnership is fitting. Back in the fall of 1982 members received discounts on Hyatt properties in Mexico, “Imagine a double room at the Hyatt Cancun Caribe for only $37.50 or a double room at the Hyatt Regency Acapulco for only $30.50.” Around the same time Hertz became the fist car rental partner.
When AAdvantage launched it started out with existing customer lists totaling around 200,000 members. American says that of those original members, plus people who joined during that first year, 144,000 remain active in the program.
American has a partnership with Apple Music where people can listen to their subscriptions inflight without paying for internet, and American markets the service to passengers for a commission. They’ve created a playlist of the top songs of 1981 which Apple Music subscribers can access:
|1||“Celebration”||Kool & the Gang|
|2||“Morning Train (Nine to Five)”||Sheena Easton|
|3||“Lady (You Bring Me Up)”||Commodores|
|4||“I’m Coming Out”||Diana Ross|
|5||“Just the Two of Us”||Grover Washington, Jr. & Bill Withers|
|6||“(Just Like) Starting Over”||John Lennon|
|7||“De Do Do Do, De Da Da Da”||The Police|
|8||“You Make My Dreams”||Hall & Oates|
|9||“Queen of Hearts”||Juice Newton|
|10||“I Love a Rainy Night”||Eddie Rabbitt|
|11||“Bette Davis Eyes”||Kim Carnes|
|12||“Master Blaster (Jammin’)”||Stevie Wonder|
|13||“Stars on 45 Medley”||Stars on 45|
|14||“All Those Years Ago”||George Harrison|
|16||“Let’s Groove”||Earth, Wind and Fire|
|17||“Being with You”||Smokey Robinson|
|18||“Slow Hand”||The Pointer Sisters|
|20||“Elvira”||The Oak Ridge Boys|
|21||“9 To 5”||Dolly Parton|
|22||“Hold On Tight”||Electric Light Orchestra|
|23||“The Stroke”||Billy Squier|
|24||“Treat Me Right”||Pat Benatar|
|25||“Another One Bites the Dust”||Queen|
|29||“Hungry Heart”||Bruce Springsteen|
|30||“Woman in Love”||Barbra Streisand|
|32||“Arthur’s Theme (Best That You Can Do)”||Christopher Cross|
|33||“Never Too Much”||Luther Vandross|
|34||“Love on the Rocks”||Neil Diamond|
|35||“Don’t Stop Believin'”||Journey|
|36||“Suddenly”||Olivia Newton-John & Cliff Richard|
|37||“Ain’t Even Done with the Night”||John Cougar|
|38||“The One That You Love”||Air Supply|
I’m glad to see American doing something for the 40th anniversary of AAdvantage. I’m a purist and feel like they should be doing this in May. And I’d prefer something a bit more engaging and lucrative – twenty years ago they ran a 20/20 promotion offering 20,000 bonus miles for activity with 20 partners. How about 40/40, something along the lines of the old ‘US Airways Grand Slam’ maybe?