JonNYC shares some interesting statistics about American Airlines.
- They generate $190 million in revenue overbooking flights
- The average overbooking level is 2.6%
American also believes that:
- 55% of their revenue comes from infrequent passengers who flew once a year and represent 62% of customers
- 45% of their revenue comes from frequent passengers who flew more than once a year and represent 38% of customers
also a riff on this stat that I’ve seen out there before:
Infrequent passengers -> 62% = 55% of revenue
Frequent passengers -> 38% = 45% of revenue
(yes, this one surprises me a lot, personally.)
75% of total from US travel, 25% global
(if I’m reading that one right.)
— JonNYC (@xJonNYC) March 10, 2020
Four years ago American shared on an earnings call that 50% of its revenue was coming from once a year flyers who made up 87% of its customers, with more frequent customers representing just 13% of flyers and the other half of revenue.
- Fewer infrequent customers now make up a greater percentage of revenue than in 2015
- Five years ago only 13% of customers flew more than once a year but now 38% of customers are ‘frequent’ but contributing a smaller percentage of revenue
It seems like frequent flyers make up a smaller percentage of revenue than they did four years ago, although more passengers are flying more than once a year.
- More than once a year flyers went from 13% of customers to 38% of customers, but fell from driving 50% of revenue down to 45%
- Only once a year flyers went from 87% of customers down to 62% of customers, but increased their revenue share to 55%
It certainly wouldn’t surprise me that a combination of award chart devaluation (higher prices for the best awards), product devaluations (less space per passenger on domestic narrowbody aircraft) and making status harder to earn (minimum spend requirement and taking away the ability to earn as much towards that via credit card) would combine to push frequent customer share of wallet towards competitors.
And perhaps while people are taking more trips overall that could mean moving from one trip to two and flying American Airlines, people taking the most trips are cutting back spend with the airline.
I reached out to American Airlines for comment but they did not respond.