Rolfe Shellenberger, who with a couple of other executives under American’s Senior Vice President of Sales and Marketing Tom Plaskett (once considered a possible successor to Bob Crandall) worked with consultant Hal Brierley to launch American AAdvantage as the first mileage-based frequent flyer program in 1981. I’m told that Schellenberger, whom I was privileged to communicate with later in his life, passed away.
The project’s code name in development was ‘Loyalty Fare’ because the original task was to come up with a frequent traveler discount – but they determined this would be quickly matched by competitors and reduce revenue, and they wanted to grow revenue so that passengers would choose American even when fares were higher or flights less convenient.
Western Airlines Travel Pass was arguably the first modern loyalty program, offering $50 off for every 5 trips. And of course Steve Grosvald launched Mileage Plus days after American AAdvantage took United Airlines by surprise. But AAdvantage was first to market with what we think of as a frequent flyer program today.
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. When AAdvantage launched they started out with existing customer lists totaling around 200,000 members.
While AAdvantage was a team effort under Plaskett, Shellenberger took specific credit for bringing upgrades to the program in an interview with Randy Petersen,
I insisted on upgrades on being a part of the program and being maintained. The upgrade was a key factor in the success of the program. Because it was a cheap way to keep the guy locked in. A little more than two roundtrips coast to coast would get you in there.
…It’s the thing that got people early on eager to get more. It was like feeding a bunch of pigs in a trough. The upgrades really made a lot of sense as they made people feel that the airline was doing something for them.
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. Shellenberger was responsible for both.
Many forget that Shellenberger’s AAdvantage was 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.
He wasn’t just known for the frequent flyer program, but also takes credit for putting pianos on Boeing 747s.
Shellenberger was 91.