News and notes from around the interweb:
- The anti-trust trial against the American Airlines-JetBlue alliance is scheduled to run September 27 – October 17.
The government is doing the bidding of airline competitors here (Delta, United, low cost carriers who want New York slots taken away), not customers, and undermining the rule of law in the process because the government had literally just approved this before suing to stop it.
- The U.S. buys blocks of tickets on Ariana Afghan Airlines’ Kabul – Doha flights
- One million American Airlines Loyalty Points
- Starting September 7 Japan will allow ‘non-escorted’ package tours no more constant supervision but still no independent tourism.
- ‘Jiro Dreams of Sushi’ and the American Omakase Boom
- Taiwan’s China Airlines buying 16 Beoing 787s it’s a good long haul aircraft but choosing it over the Airbus A350 is one of many small moves that positions Taiwan closer to the U.S. as China’s aggressiveness grows.
- Status matches help acquire high value customers fast
One million… that’s so cute.
Just 60k short of 2M here.
(And no, I didn’t get in on the donation multiplier deal.)
1,013,125 Chase points.
If the million LPs was all CC spend, that is only worth ~$10,000 in revenue to AA. There may be some sort of CK consideration at like 4, 5, or 6 million LPs from just CC spend, but that won’t be common.
I also have around a million LPs from cc spend and there is no way I will keep my CK status from just cc spend. Qualification will be what it always has been: flying that results in at least some unpublished/unstated high level of profitable fares to AA.
Those 1 million Loyalty Points will not mean squat if the individual does not have 30 segments.
Imagine a person who is Concierge Key who travels round-trip from JFK to LHR in first class once a month and is a cash payer. This most valuable of customers only has 24 segments. Now imagine this most valuable of customers is the one who earned the 1 million Loyalty Points. This most valuable of customers would not receive any of the choice benefits resulting from those Loyalty Points. That’s messed up. The people who imposed the segment requirement clearly were not thinking.
Perhaps, the issue is not revenue but profit. Based on the discussions in this blog AA is losing money flying but makes about $0.005/mile when selling points. If a person gets 200k LPs from just flying AA, the airline is loosing money. However, 200k LPs from selling points means $1,000 profit.
Nevertheless, LP scheme is just plain stupid in my opinion for a number of reasons.
There seem to be few compelling reasons to accrue 1M LPs unless they are entirely from actual travel. I’m at 350K and moved spending to more lucrative cards long ago.
Lone Gunman – You are correct to highlight that scenario. I have been CK for over four years and never have flown more than than 18-20 flight segments annually. I am going to struggle to get to 30 segments – I would need to do a major “segment run” get any of the choice rewards even though I already maxed out all of the published LP tiers (and then some) for 2023 many months ago.
One million LP’s sounds like a terrible idea.
I get wanting 200K to score Executive Platinum, but beyond that, the opportunity cost of earning only 1 point on CC spend, earning points on the less generous eShopping, or other forms of earning whether there are more lucrative alternatives comes with a heavy opportunity cost.
Even if this was earned on flights, (no doubt paid premium cabin) accruing to BA would likely earn BA Gold.
Alex77W: They lose money on *some* flights and may lose money on flying *overall*. 200k LPs from two round trip full fare J tickets is extremely profitable to AA while 200k LPs from tons of short flights does likely lose money for AA. It’s the complexion of the flying that matters, which is one reason that CK has always been profitability based, not simply total miles or only aggregate spend based.
BC: The main reason is higher priority to clear upgrades. There are going to be a lot of new EXPs and I suspect that 200k LPs will not put one high in the upgrade pecking order, especially on busy hub routes. Whether that is worth more to someone than the incremental benefit from moving that “surplus” spend to a more lucrative card is obviously an individual determination.
Just thinking about the angst involved with flying American often enough to reach a million miles is enough to ruin my breakfast. Now the guy doesn’t even need to pay to be tortured when he books award tix. Oh joy.
I don’t see much point or value in having these miles. Have you ever tried to redeem a usa to europe trip? The routings are just ridiculous. I learned long ago to temper myexpectations of AA.
Roper, a person in that scenario has a substantial disincentive to accrue more than 200k Loyalty Points. (Some might argue 125k.) There’s an opportunity cost to put spending on an AA credit card instead of a more lucrative credit card. To this point, BC stated that he/she will shift spending to other credit cards. I’m not certain AA thought about this consequence. What would maintain an incentive to accrue more Loyalty Points (to AA’s benefit) is a Loyalty Points rollover system (in some manner or fashion) similar to what Delta has. This feature would sway me. In its absence, like BC, to a certain point then move on.
Lone Gunman: If an EXP cares about successfully scoring upgrades, especially in AA hub markets, then they are going to need to keep accruing LPs well above 200k. If one doesn’t care so much about upgrades (or values them less than the incremental cash back from putting the spending in a more lucrative rewards card), then yes, you are 100% correct.
@Lone Gunman – You still get the standard benefits without the 30 segments but I think the Loyalty Choice awards become more worthwhile the more LP’s you earn. I’m aiming for 350K LP’s and 30 segments which will give me some nice choices. Unfortunately most of my earnings are through credit card spend so I’m having to do segment runs to reach 30. I waited until my EXP came through to start the runs so I had a better chance of getting upgrades. On a very quick 4 segment run yesterday I lucked out and got business class on every flight so at least that part of the plan is working. I’m still not sure the juice is worth the squeeze on the segments but at least for this year I’m committed.