At this morning’s Global Flight conference, Randy Petersen reminded the audience of a change that American AAdvantage put forward in May 2008 to begin imposing a $5 for booking award tickets on its website.
This announcement — which was to go into effect the following month — set off a firestorm.
The old argument was that reservation centers were more costly than web, an airline wanted to (a) push its reservations online to lower costs and (b) charge a fee for the ‘extra’ service of having a person handle the booking.
This proposed change turned that on its head. And it’s worse than Spirit imposing a fee for buying paid airfare everywhere except the airport ticket counter… because it actually served as a tax on those who had accumulated miles in a past, a fee to redeem a free ticket.
And in fact American didn’t wind up implementing the fee. June 22 came and the fee just wasn’t there. There wasn’t ever an announcement (and many members who heard about the fee assumed it was there, others just assumed they were waiting until American got the IT right).
American decided to back off. But they decided not to tell anyone. And they gave up a huge PR win in the process..
- To listen to their members
- To reduce fees
They had already relented on the change. Why not claim credit for it? But sometimes it isn’t easy to publicly say you’re sorry.
Ironically, US Airways Dividend Miles has such a fee now, and it’s more than just $5!
Their award process fee (waived for Gold elites and higher) is:
- $25 U.S. except Hawaii and Canada
- $35 Mexico and the Caribbean
- $50 Hawaii and other international
No doubt one of the things that AAdvantage will be looking at, as it aligns policies with Dividend Miles and prepares to combine programs is its fees.
American backed off its fee, US Airways came later and imposed one, which is often how these things work. United once tried to impose a Saturday night stay requirement for booking a saver award ticket. There was an uproar and then the airline backed down. Northwest came in after United, imposed the same thing on its Worldperks members, and that change stuck.
Companies don’t like to publicly admit when they’re wrong, but they could earn a lot of goodwill from members when they do it.
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That’s a valid point but this is just one example from 6 years ago. Pretty thin argument IMHO.
The “$25 US except Hawaii and Canada” is likely to stick the in craw of a few Canadians. It’s actually “$25 US (except Hawaii) and Canada”.
Hurt me, but a couple days ago I had to buy just a few AA miles. Deeply buried in terms and conditions is a processing fee of $30. Sigh. Need the ticket. I go ahead and…
Got my bill:
Total Cost: $220.00 USD
Federal Excise Tax: $16.50 USD
Processing Fee: $40.00 USD
Total (billed to your credit card):* $276.50 USD
PROCESSING FEE OF $40 ?!?!? hmmmmmmmm
My question: Is a fee lie worse than a fee change with no warning?
Gary,
I have heard that American will be getting rid of the Executive Platinum status to be better realign with US Airways elite structure starting next year; and having Platinum as the highest level.
What are your thoughts on this?
US Airways has Chairman as its highest level. I do not know what the top tier of the new program will be called if they change the name but they won’t get rid of the top level of the program, I am confident of that.
Gary, I’m not sure they’d get much goodwill from their members if they rolled back a change. People would still be angry, more suspicious and less trustful of the airline.
@Enjoy FIne Food – Same thing happened to me. Had to buy 1000 miles to keep my miles from expiring. Was charged a $30 fee on a $29 purchase. Totally f***** up.
They might feel that if they roll back silently, they may keep the door open for trying to introduce the change again in the future, perhaps with different messaging or bundled with other changes, etc. They may feel this would be harder to do if they backed down publicly.
I think the New American applied whatever lesson there is and will now just do a change without warning. We’ll be angry, but they’ll do it because they can. I’m operating on the assumption that when deciding between current procedures with US Airways and American, they will opt for the worst and say nothing in advance. If that isn’t the case, I’ll be pleasantly surprised, but in the meantime that’s the bottom line of how I’m evaluating my miles in the two programs and my strategies going forward. Tried to cancel my AAdvantage MasterCard but they offered the $95 statement credit and bonus mile opportunities others are also getting, so I held onto it for the 10% rebate on redemptions.
Gary, another retreat by a FF program occurred in August, 2002 when US tried to change DM status qualification so only full fares would count toward status. The outrage led to the creation of the US cockroaches, now known as FFOCUS, and the change never took place.
No surprise that the person behind that boneheaded move was none other than the current CEO of Spirit, B Ben Baldanza.
I remember that UA would relent after making a change by saying ‘We’ve heard from our best customers…”
I’m still waiting to hear that from UA after 2 years after the merger with CO.
I don’t expect to hear AAUS make any changes.