This week American AAdvantage made several changes to its program:
- Rolling out a new three-tier pricing model for AAnytime awards (paying extra miles when regular award seats aren’t available).
- Eliminating free stopovers on international awards at the North American gateway city
- Eliminating distance-based oneworld explorer awards
- Increasing the telephone booking fee from $25 to $35 (they still do not waive this fee for awards that cannot be booked online, and most airline partner awards cannot be).
I saw the changes themselves, overall, as not that big a deal — but the lack of notice about these changes (implemented before communications even went out to members) as being a very big thing indeed.
Of course for members who had been taking advantage of these things, losing them was a big deal and it wasn’t my intention to minimize that — just to point out that for the membership of AAdvantage as a whole these aren’t among more-used features, that there weren’t really any surprises in the changes (changes to double miles awards were very much expected for instance). And there will be many much larger decisions to be made in the near-term that will make some people happy and anger others unavoidably.
No Notice Changes Are the Worst Thing a Program Can Do
The real key, and the best AAdvantage can do, is provide reasonable advance notice about the changes they plan to make.
The worst thing they can do, on the other hand, is what they did — pull the rug out from members who may have spent years saving up miles for a specific award they’ve now not given any last shot for those members to book.
There are going to be many more changes to come as American and US Airways align their policies and procedures over the next year. Most of those are going to be far more significant than the things announced this week.
Members are flying all year this year, giving American and US Airways their loyalty in exchange for promises of benefits in the future. No matter what program terms and conditions say about a legal right to change rules at will, and notwithstanding the Supreme Court’s ruling that consumers have no state law remedy against frequent flyer programs, their is a basic offer and acceptance and moral obligation to deliver on promises which is fundamentally breached when changes are made without meaningful notice.
And members save up for years for those dream trps on the basis of descriptions of what’s possible.
Devaluations without notice are the last refuge of scoundrels and banana republics.
Members Are Up in Arms
Reading the comments to various posts here, both my original discussion of the changes and my subsequent interview with AAdvantage President Suzanne Rubin, you’d think I was at best something like Marshal Pétain in the second World War.
This was either because I did not come across as sufficiently critical in the interview (my goal was to share what they had to say on serious issues, and let readers judge for themselves, and judging from the comments I think I accomplished that) or because I appeared to downplay the substance of the changes.
I know they are a big deal to the people taking advantage of these features. Many readers, for instance, loved the allowable stopover in North America on an international award. But it’s precisely how beneficial (and costly) it was with benefits focused on the relatively few people who knew about it and were proactive enough to take advantage of it that it likely made sense to American in their top-to-bottom review and comparison with Dividend Miles to eliminate going forward. I don’t love it, but it doesn’t surprise.
I’d rather they kept the benefit, but it’s small fish compared to what’s to come.
I think the biggest reaction by members was really a fear of the future — if they did this, and they did it without notice, what’s next? And how can I trust them to steward the miles I’ve accumulated and the loyalty that’s resulted in my elite status?
My Framework for What to Expect at American Going Forward
I think that, on the whole, soft things like loyalty and product differentiation are going to matter less at American Airlines as a whole in the future, and this has nothing to do with stewardship over the AAdvantage program. It’s what I expect for inflight product, and for service standards. It’s about mission and focus and the message from the top. I think the DNA that came over from Arizona believes that frills are boondoggles.
Scott Kirby is a numbers and spreadsheet guy, and if you can’t quantify it and show a revenue stream attached to it you’re going to be hard pressed to make an investment.
The airline industry needs this, or at least it has needed this, given the sheer magnitude of malinvestment that had taken place. But you have take it too far, especially if you’ve misspecified the models it’s possible that they’ll lead you to bad business decisions.
Clearing out bad investments that’s the place in the life cycle of a business where it’s worth erring in that direction. But having done the heavy lifting already in that direction I’m not sure if it’s the right position to be taking — not just for customers, but for the business as a whole.
Scott is a sharp guy, and I trust he knows he grabbed the low hanging fruit at US Airways and that the bankruptcy already grabbed a lot of it for American, and that a different tact may be best strategically going forward.
But I do expect a natural skepticism from US Airways American leadership that customer investment is warranted, in terms of winning incremental business.
But I Still Trust the AAdvantage Program
I don’t love the changes to the program that have been announced so far. But they aren’t surprises and they aren’t nearly as significant as the decisions about the program that are still to come — about the overall award chart, unlimited domestic upgrades, international upgrade certificates, and so on down the line.
I think and hope that the strong consumer reaction to lack of notice of these changes will be a lesson learned.
For me they get one screw-up.
How they behave next time — advance notice of changes and clear, transparent communication about those changes — will factor much more into my own opinion about the trustworthiness of the program than this one-off incident.
I’ve always thought that about the worst thing a program can do is pull the rug out from under customers when making changes. And when I’ve seriously and immediately called out programs in the past it’s generally been of programs I already didn’t have much trust in.
Here I think there’s warranted criticism for how this was rolled out. American AAdvantage still has my trust, but I’m wary, and future decisions over the next months are going to be key.
They’re at a turning point. Certainly they know it. And we’ll all be watching.
But I still trust them, and whether I continue to do so will be dependent upon the next data point.
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“But I Still Trust the AAdvantage Program
I don’t love the changes to the program that have been announced so far. But they aren’t surprises and they aren’t nearly as significant as the decisions about the program that are still to come — about the overall award chart, unlimited domestic upgrades, international upgrade certificates, and so on down the line.”
You seems to be going out of your way to say that you trust them. But you are justifying that because you except more changes(devaluations)?
@Michael – bingo
@Orlijr- $0 x2 = $0
American owes an extreme AApology for these changes to Aadvantage without any notice, especially for their elites. I had mulled switching from UA to AA, and I am glad that I did not do so.
It seems that all the US based airlines and frequent flyer programs are on a race to the bottom with the industry leading moves and changes being promulgated by Delta. This actually shows the US airlines have become a grand three oligopoly. Their premium product cabins and service do not hold a candle in comparison to the likes of LH-LX, CX, AF, EK, VS,and SQ.
Why bother with loyalty, when the US based big three are now based upon on a transaction and devaluation business model?
Sorry, I see no reason to trust them. I trusted them before and got burned. I do not know what they’ll do the next time, but I’m going to operate on the assumption the “New American” functions in contempt for its customers. No I will not stop flying the airline when it makes sense for me in terms of price and schedule. No I will not seek out American options over others, ever again. I will continue to try to get whatever value I can out of my AAdvantage miles, but on the assumption that the program will not have enough value in a few months to justify my paying an annual fee for a keeping my credit card.
I for one don’t trust AA anymore – or rather, USdbaAA.
I think it is really telling that Ms Rubin did not specifically promise to give advance notice for future changes, despite all the negative feedback. “Taking it into consideration” to me sounds as though there are additional planned no-notice changes. And I bet international C/F partner awards are the next on this list.
If you have any planned partner award travel over the next 12 months, I would book it sooner rather than later. Plus, AA allows free date changes on awards even if you have no status (if the routing stays the same so the ticket doesn’t need to be re-issued). I guess AA can always renege on this in the future, but changing the rules once ticketed might constitute a “post-purchase price increase” that is prohibited by the DOT.
If you are EXP with free award cancellations and a large mileage balance, you can book a bunch of different tickets – maybe even one every couple of weeks so you can keep extending the validity date of the ticket.
@Gary: and i will. but given that i spend a LOT of time constructing an explorer award spanning many months that is now gone, all my plans are messed up. i already have hotels 70% booked and now, without explorer, the same trip is 2x the miles that i don’t have.
do i still trust American take-aadvantage?
Never book hotels without having either a ticket or a reservation on hold you know for sure you will not forget to complete.
Before I would consider this concrete but they may take away Holds without notice, so better have a ticket.
You are and will always be an unlikable individual, whether it be in person at Frequent Flyer Universities or on the internet.
It’s very gratifying to see so many people finally speaking up about how much of a crap person you are and these and your most recent posts about these severely inconsiderate sequence of events and your mis-timed and oddly measured false rage is exactly why all these people who disagree with you and/or dislike you are correct in doing so.
Do not back pedal, do not summon false anger, do not point out mere grammatical errors or mis spellings in order to reduce a person’s voice, for none of these things will save you.
Your unfounded arrogance should not and will not be tolerated any longer.
PR stunt -no more using this site for cc apps
see post #52 vs Title of Blog entry.
The entire level 3 AAnytime awards can’t even be priced but are starred on their award chart as “will require higher number of miles to redeem”, and you think they can be trusted?
They can’t even respond properly to legitimate complaints about the bait-and-switch removal of OW Explorer awards
http://boardingarea.com/onemileatatime/2014/04/10/customer-relations-adds-insult-injury/
If this REALLY was AA one might understand a trust argument. But moves like this clearly show it’s a Doug Parker operation. I would venture to guess that Ms. Rubin went along with this kicking and screaming internally, but for the sake of self-preservation had no choice but to externally make the best of it. The trust is gone as far as I’m concerned – hard to believe a rational person like you still does. UnbelieveAAble.
@Greg. that would be backwards. hotels were booked @ pre-devaluation prices. planning several months on the road requires knowing where you can stay FIRST. the price of hotels at award vs paid can be 5x up to 10x. everything was open for an explorer award, i was just firming the last details when AA dropped explorer overnight. something, frankly, i never thought a company would do in 2014.
i didn’t factor a zombie apocalypse into my plans either. of course, going forward, one cannot plan anything with regards to AA beyond today. if you can’t count on anything, the miles lose their value vs other more predictable miles/currencies. this is what US Air mgmt doesn’t get.
Gary.-Please explain how it costs AA anything for me to connect to Europe after a 3 day stop at a gateway compared to not stopping at all. I agree that the free one ways had to be addressed but that is not my question.
“I still trust AA because I need you to use my referral links to sign up for their credit cards”
I’m not arbitrarily looking for replies, but I’d like to know if ANYONE as made a concerted effort to comtact rubin and the other jagoffs? I’m going to presume that not one person did this. If you’ve bought tickets on OAL’s since this happened? If so, have you scanned (less payment details) tickets and included in an email to them?
I mentioned yesterday I have a client who chose to tell RUBIN to f-off (he’s an EXP with 3.5+ million miles). How’d he do ît? Instead of buying 3tkts @ AA’s $53k, he purchased the same 3tkts but on one of their direct, head-to-head competitor for $83k. They wanted to use explorer awards for a last minute far flung business trip and AA said “so sorry, they don’t exist anymore but we have seats available to purchas”. He’s sending copies of tickets to RUBIN and KIRBY upon their return with a letter that’ll basically say “Dear AA, Suzanne and Scott: F-you. I know him and he’ll have no compunction to do that. He’s sending it to RUBIN, the numbers guy Kirby and Doug. Can’t wait to see what their response (if any since they’re jagoffs) will be. Oh that’s right, they’ll probably reply with “sorry the baggage policy has changed” like I read somewhere else.
Suzanne.rubin@aa.com
Scott.kirby@aa.com
This is a trip he a d two other exec’s make 5-6 times yearly with unfortunately for them, little advance notice – so award travel is a little inconvenient. Nice to have that kind of change to spend I guess.
GARRY YOU ARE WRONG!!EXPECTED MORE FROM YOU !!
they can make mistake, but they can also make up for it if they really want. Didn’t United extend period for old award pricing?AA totally could have given a grace period after they found out the ,”unexpected” negative reaction.
“Thank you for putting your trust in us and continuing to be a DisAAdvantage(d) member.”
AA and the rest of the airlines have showed that there is no other way to go forward except as a free agent, especially if you are burning corporate account money for your tickets. It just does not make sense to earn miles anymore and dream of a family trip. Its just not worth the usual hassle.
You so wrong and pandering to AA, total devaluation, already milesaver economy to my annual trips to Maui and Key West are rare or nonexistent , respectively. The new Delta. Less need to follow blogs. And your promotion of buying USAir miles during current special way off base now as buying peso AA miles.
@Michelle – I angered you a couple of months ago when you posted as “Walter” and “Lindsay” about my Sheraton Macau room service coffee experience. Then you called me a jerk as “Scott” and insulted me as “Devin” and then as “Bruce.”
I wish I knew what it was that I did to set you off this way, what you think it is that makes me so unlikable especially in person?
Well, I think 2 things are going to happen in the future. First, AA will probably provide some “notice” the next time they change the rules. They’d be foolish not to, and they tend not be foolish. Second, I think a lot more frills and benefits are going to disappear.
Why?
Because frequent flyer programs do not exist to increase the happiness of their customers. They exist to make money. JP Morgan’s Jamie Baker (probably the premier airline analyst) said Delta’s move to a revenue-based program will add an extra $150 million/year to the bottom line. He thinks AA can make even more, and will make the move soon.
I agree. Parker and Kirby will see this as a business decision. If they can make more money by running a stingier frequent flyer program, they will. And isn’t it their obligation to shareholders to do so? If another marketing program will make more money for the company, that’s the program they will adopt. And, as businessmen, that’s the program they SHOULD adopt.
Forget complaining to Gary – he is so far down the pockets of AA brass that you’d have a better chance extracting MH370’s black boxes from the bottom of the Indian Ocean than you would him from their trousers. The only way to hit back at these airlines and the lack of power we have as consumers in face of their increased consolidation is to raise hell with our congress for increased penalties and compensation for late flights, lost bags, etc.
I’ve said elsewhere I’m still planning to finish my mid level chase with AA this year. Only because I have 42k planned already and it is still close enough to get than starting at zero elsewhere now.
But my loyalty to AA is gone. I’m reevaluating. I’m listening, learning, deciding what works best for me.
I still believe Delta has the best on board service of the majors and AA was the best of both worlds and UA was pure garbage. My UA opinion has’t changed, but AA no longer has a loyalty program any better than DL. At this point I’m looking at next year in a “i’ll pay for what i want” instead of chasing status to get what i want. Things can change between now and then, but that is how i’m being pushed by the disrespectful actions of AA.
I personally think you’re foolish to continue to trust AA Gary, but I realize everyone will evaluate what works best for them. I hope for your sake, it goes better than I think it will.
@Ct #67, I wrote Suzanne Rubin and CC’ed Doug Parker and Customer.Relations@aa.com with my disgust of no advanced notice and the ridiculous email they sent out touting positive changes. Told them if they want to win back loyalty from their best customers like us Million Milers, they need to reinstate the One World Award an issue an official apology for making changes without advanced notice and promise not to do so again. No reply yet.
EVERYONE – PLEEEEASE be sure you email these people and customer relations about all of this. I don’t trust AA anymore and I seriously doubt they will end up backpedaling enough to regain my trust, but between the wife and I we still have close to one million miles to burn (yes free vacation days are an issue right now because we are burning a million UA miles from deval, ugh…). At least email your complaints to try and help others like us that need to use these up and get the point across to AA that they CANNOT make further changes unannounced. Thank you!
Also, we all need to hit them hard on Facebook & Twitter as well. Just go look at the things I’ve posted and replied to other people’s complaints about.
@Curtis,
The aa people in charge of Twitter and Facebook are so low down the ladder that it really doesn’t matter. Even if they tell higher ups about the general tone of the posting, we both know that aa couldn’t care less.
The ‘rantings’ here on Gary’s blog are much higher quality. 😉
@dhammer53, True, they are pretty far down the ladder, however at least it exposes more “average” AA people to what has happened that may not have even noticed thanks to such a “positive” email that AA sent about the changes.
Anyone who trusts ANY of these loyalty programs these days is naive at best and deluded at worst. I suppose shills would be excluded from this statement.
I think it’s naive to attempt ‘advocacy’ by either throwing a tantrum OR ‘giving them one more chance.’
The paradigm of frequency programs is shifting. Nothing customers can do will change that.
Help your readers understand how to start preparing now for the future of frequency programs. Help us know when it is time to cash out before it’s too late. Help us understand what the FUTURE of frequency programs will look like so we can shift our habits.
Or don’t.
Everybody gets one screw up…? You mean “one” as in something of this magnitude? Come ooon. At least the other legacies gave notice.
Live long enough to become the villain…
Changes are unavoidable, devals are unavoidable. But a nice heads up to burn whatever miles you were saving, would have gone a really long way. To defend this and say you still “Trust” them? You will lose the readers’ trust. You are getting out of touch.
For all those who say, “I’m done with AA and have booked/will book my next flight(s) with UA/DL/WN” you really aren’t changing anything nor communicating your displeasure to AA. You’re simply moving pork from one side of the pot to the other. You need to choose a different pot.
As consumers, if we even dream to make an impactful change to the behavior of these mega legacy carriers, you have to take your wallet to a smaller carrier. Yes, you lose convenience and perhaps frequency. For those on the East coast – choose B6 to fly more places and perhaps UA/AA/DL only get one or two flights out of you/year. For those on the West Coast: AS or VX. All three of these carriers do transcons, though not to all points and not with as great frequencies.
But please don’t delude yourselves into thinking you’re making a point by shifting your business from one clusterf$%^& of a legacy carrier to another. Nothing will change. I don’t trust UA, DL or AA (or even WN) and am thankful I haven’t had the need to fly any of them over the past 2 years. AS and VX got my business.
@Kelly, Good point.
I recently flew Delta and credited the miles to my Alaska account.
AA/US/UA/DL flyers need to take a close look at foreign partners to see if there’s a (potential) benefit in crediting your domestic miles to the international partner.
@Gary, that’s an idea for a future blog post.
That’s the spirit, @Kelly!!
Big picture, forward-thinking analysis!!!! ^
Do you perchance have a blog I can follow!? 🙂
I think the worst part of your comments on this is the part about “awards you never use anyway”. Over the last year or so, AA has virtually eliminated having more than 1 premium award seat on any flight.
A couple wanting to fly together, much less a family, is now forced to go Anytime. That used to cost 2X the miles, but now it costs 3 to 4 times. You screamed when UA did this for partners, but at least they limited it to partner awards, and gave notice so people had a chance to book with the miles they had already acquired.
AA has now done the same thing, but for it’s own metal, and with no notice.
Due to my wife’s new job, we had to cancel our already award ticketed trip to Europe this summer. We were about to book an economy trip to Cancun for Thanksgiving, since that is the only 4 day weekend she has off for the next year.
Due to work requirements that meant leaving on Thanksgiving Day, and returning on Sunday. Despite being 8 months out, the return is only available Anytime. We decided to swallow the return Anytime rate, since this is the only vacation open to us until Summer 2015.
The Anytime return was previously 35K one way. Now it is pricing at 65K. That’s more miles for economy to Cancun than we spent to go FC TATL last year.
So, no Thanksgiving in Cancun for us. No international trip for over a year. Awards you never use anyway? Bull**** !
@kokonutz: I’m flattered, but no, I don’t have a blog of my own and not sure I’d be great at it. FWIW, I tend to follow Lucky’s One Mile At A Time blog more than Gary’s, but see value in Gary’s. I value a lot of differing opinions, so again, take that FWIW. Indeed, as much as some blame Gary for cheerleading AA on his blog, I could be blamed for doing the same for AS, which I’ve been flying (crediting mileage toward) almost exclusively for the past 26 years, and I’ve been all over the world with those miles.
The evolution of FFP’s, mileage earning/redempton hobbyists and travel bloggers and consumers exploiting every last crevice of these programs, and then consolidation is reminiscent (to me, at least and imperfectly) of Hansel and Gretel. Guess what? All of us as consumers are now tied up in the witch’s house being prepped for dinner. It’s now our turn to outsmart the witch to escape, knowing that house is no longer safe to eat from.
Food for thought (pun intended).
From a pathetic attempt to spin (a rather misleading e-mail from S. Rubin) to teh immediate changes (imagine an AA GLD showing up at an airport with two bags in the morning of the announcement) these changes appear to be a rush decision by an executive rather than a calculated step by the largest airline in the world.
Perhaps, one of the executives (who that could be?) felt an euphoria of a spectacular AA financial performance. When you are at the very top, why should you listen to anyone else? Let’s change the phone fee to $35, raise the award levels, and eliminate an entire class of awards and rules! How harmonizing! I feel even better now and nobody would argue against.
While I do understand why Gary would trust the old AA, the leadership of the AA is now entire new. It is like your wife cheating on you during the honeymoon.
This is why I trust AA even less than DL.
Even if change and devaluation are inevitable, AA has chosen to implement this in an outrageous and disdainful manner. It’s absurd to think that they didn’t fully understand what they were doing and decided they didn’t care if they would upset their members. Then to pour oil on the flames they dissembled and misrepresented the changes.
Fool me once, shame on you. Fool me twice, shame on me. I don’t see how you can trust them not to do the same thing.
Guaranteed the eVIPs will either disappear or be limited to higher fare categories or require a co-pay.
I don’t even follow Gary all that much, I have so much junk email and tweets and facebook I only see some of it. But what I do follow Gary I really had to do a double take with his take on this. I actually re-read what he wrote to see if it was what I thought he said. But I can see how you can screw up and maybe see the other side, but he seems to only be replying on all the blogs with the same lame type of facts that AA is replying. I haven’t seen him make ONE even half apology to his readers that maybe he missed the mark. ONly quick comeback like AA tweeters and fbookers.
@Gary I can’t believe you responded with this, “you do have ample opportunity to burn all your AA miles given what you expect since the AA saver/partner award chart has not yet changed at all!”
There is absolutely no way AA will keep their saver inventory the same. They will slide them up to the new high levels now that they exist. Why? Maybe you don’t have experience trying to find economy savers with US metal in the past, but they are far and few between, much worse than AA. New management will apply the same to AA.
@Nun highly suggest redeeming predominantly on partners. I’ve written elsewhere that AAdvantage will be subservient to the inventory and revenue management folks but that’s not materially different than the status quo, AAdvantage saver award inventory hasn’t been nearly what it was over the past two years.
I don’t trust AA!!!
I think farnorthtrader put it best: all of the people who make the decisions are from USAirways…. This is USAir and this is just the latest in a long line of decisions showing their disregard for their customers. … the AA you knew and loved doesn’t exist anymore and these decisions are going to continue because we are dealing with USair, who has always done this.”
Very sad for us, and I think harmful for AA in the long run. AA was on their way to being a premier airline. Now it looks like they are going to be a bigger US.