About a week ago American Airlines CEO chuckled at the ‘somewhat different’ clientele the airline is attracting compared to normal times. The airline’s historic focus on business travelers doesn’t work when there aren’t many business travelers, and extremely low fare passengers have never been their core demographic.
After the airline’s third quarter earnings call, executives took questions from employees. Asked about the passenger mix, Senior Vice President Vasu Raja explained that:
- “It used to be that 25% of the people that sat on our airplanes were AAdvantage elites… Today that number is about 15%.”
- Now they’re carrying a “bigger mix of people that have never flown with us before.”
Last year frequent flyers made up a smaller portion of American’s revenue than they did four years earlier. And now elite travel is down substantially more than travel overall, because businesses aren’t sending employees on the road nearly as much as they used to.
So how many people would make top status under ‘normal’ requirements this year? Raja says “there’s about 1000 customers out there who would qualify for Executive Platinum under our old rules. 40% to 50% of those were not our customer last year, they were [elites with another carrier].”
If you want to know why American is making elite status easier to earn in 2021 this helps explain it. Only 1000 people would be top elites requiring 100,000 qualifying miles and $15,000 spend otherwise. People are flying less and fares are cheaper. Five years ago there were between 50,000 and 60,000 American AAdvantage Executive Platinums.
OPM needs to stay home, then requirements will go even lower for those of us who are fortunate enough to travel and not fly around doing our corporate overlord’s bidding….
Once the airlines introduced the hefty annual spend for elite qualification, they lost most of the leisure travelling top elites. With corporate travel still almost completely grounded, it was obvious that the number of passengers who would qualify for elite status under the old rules would plummet. It’s Marketing 101 for AA and the other airlines to now be seeking loyalty from the people who ARE travelling, and that would include frequent leisure travellers.
Not sure how to think about this. With lowered requirements I earned low-level status this year for 2021, and I’ll be competing for upgrades with elites who didn’t fly at all in 2020 and got their status rolled over.
Who’s the “real” elite?
But amazingly, upgrades are much harder to clear for exec plats.
Remove Plat Pro and make Platinum 60k. You need to be rewarding more your long-term elites and that helps the LT Plat crowd, although you still have the dollar spend parameter for upgrades.
@ BB I like your suggestion to get rid of Plat Pro and simplify the program and boarding procedure
American cooked its own goose over the years devaluing the miles and trying to copy Delta
Award pricing is dysfunctional and frequently overpriced with some small sweet spots with theor web specials.A coach ticket is 181 dollars one way on revenue yet to redeem for miles @ 47K
I left the airline 3 years ago with their poor decision making.They are and remain horrible at recovering from their own operational issues non weather. CRM is and continues to be an issue at American as does shrinking seats and lavatories
Long time AA (and previously US Air) flyer. Lifetime Platinum w around 3 million miles. Still have about 900,000 miles in my account (after booking tickets Lisbon in April 21 and Frankfurt in Sept 21 that could be redeposited). Frankly I gave up on upgrades years ago (even before I retired and was EP). Still see value in booking main cabin extra for no fee, preboard info and no bag fees. However I mainly fly AA now since I am at a hub (CLT) and most convenient way to get anywhere.
I no longer have any loyalty to any airline (Lifetime Gold on DL and also fly SW and Frontier due to cheap fares).
Hope AA survives so I have options but always check and if no AA non-stop where I’m going it is cheapest option for me.
I gave up my AA Executive Platinum a few years ago as I couldn’t maintain that and my United 1K. I qualified for 1K this year with the old spend standard and have flown 87k miles this year (70k of that Jan-Mar).
The biggest challenge for me going forward from what I can see would be hitting the spend. Flights that I’m taking now are running $230 where in the past I would struggle to see below $550. I need international to open up!
They need to increase SWUs to about 20 for EXPs, but keep them unconfirmed till 5 minutes before the door closes.
Darn, I shouldn’t have suggested that, Vasu probably reads this blog.
I was wondering why Doug called me to ask when I would be flying AA again.
I could swear it was Doug Parker but I was half asleep and assumed it was a pollster …….
Yesterday on arrival in to DFW (on a connection) I was met at the gate with by uniformed agent holding a sign with my name on it. He was aware I was flying on business (I work for one of the companies you referenced yesterday and booked through our corporate tool) and thanked me for being on the road and sticking with AA.
I’m a 4 year EXP, I’ll re-qualify this year, and I’m actually quite happy with AA these days. Now having agents greet me at the gate does 0% to keep my loyal, in fact the conversation was a little bit awkward, but it tells me that they are zeroed in on who is profitable and who isn’t. I don’t think they’re going to be foolish enough to run off business travelers when things get back to normal one day.
I am one of the 1000. I have been an EP with AA for the past 11 Years. I have been CK once in 2017. I have been Delta Diamond for the past 13 years as well. I think they need to reward those who are traveling and keeping them in business – what is the benefit?
As of right now, I will do around 110k miles and $20k this year on AA (enough to maintain without new requirements) and around 70k on Delta (but with rollover, ill rollover 30k and will keep DL) –
American should be rewarding the 1000.