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.
- You can join the 30,000+ people who see these deals and analysis every day — sign up to receive posts by email (just one e-mail per day) or subscribe to the RSS feed. It’s free. You can also follow me on Twitter for the latest deals. Don’t miss out!
How many time do you let your wife cheat on you before you don’t trust her any more? No trust left here.
I don’t trust AA now. It even seems to be a given that they won’t make up for their mistakes (by giving back to us at least a grace period for some of these bookings we have been saving up for that are now suddenly out of reach.) And it seems to be a given that they won’t even apologize for the lack of notice or phase-out period of the old awards.
I think it would be naive and foolish on my part to continue to trust AA after what happened this week. Can they earn my trust back? Yes I suppose so, but it’s going to take a lot of effort on their part to show me that they won’t behave in such a fashion ever again.
In other words: “Fool me twice, shame on you. Fool me three times, shame on me!”
Gary, I may be missing exactly how a Gateway stopover costs AA anything. In fact it could save them money by positioning the passenger at the ocnnection point in advance so there’s no chance of a missed connection requiring hotel, etc.
Now granted some of us took aadvantage of this when we found that we could fly backwards cross-country months ahead to a gateway, then fly halfway around the world, and if we started the trip before May 15 even get the Off-Peak 20,000 mile fare to Europe in July! But as the rate desk supervisor told me when I ticketed this awhile back, “If they didn’t want you to do it they could easily block it in the website.” And I would have been just as happy to stop enroute which would cost no extra fuel and possibly save them money.
Please enlighten us as to why they would want to deny us the right to stay over, when most of us would not do so and pay for it were it not a perk. If it doesn’t cost money, then its just mean to take it away. I think you can’t overlook that some of these green eyeshade guys are mean at heart. Look at the GOP. Thanks.
The impending breakup of AA/US frequent flyers will be just like the UA breakup 2 years and 1 month ago. I had a 25 year long relationship with UA. Once they ‘cheated’ on me, there was no reason to go back. The same goes for AA/US fliers.
The airlines only cared about us (blog/travel board readers) when it was in their best interest. This is not the case anymore. They have told us to go f*** ourselves.
As Rick would say, the game has changed, and is changing. Programs are morphing out of the good old days.
Gary, even Brian (TPG) walked away from his much loved Delta. Give me your hand and we’ll walk away from the dAArk side. It’s time.
One screw up? They not a five year old but a multinational corporation that made a calculated move with contempt for their loyal customers. No trust left.
I’m confused about the new rules as I haven’t had time to read up on everything. If taking an international trip to Asia, can you still spend the night in Hong Kong for less than 24 hours to break up the trip?
On an unrelated note, how do I find valid open jaw transatlantic tickets on aa.com? Many of them change fare codes when you try to book them and thus the price. And then you can’t book them. Why show me a ticket that I can’t book (very frequent when you use the multicity search function)?
Yes, I want to use real money to buy a ticket, but I want it to be upgradable.
I’m not getting why you would trust AA or other any frequent flyer program. FF programs are clearly on their way out as a significant way to defray travel expenses. The effects of industry consolidation on how many freebies customer get was utterly predictable. Also, after sleeping on it, I realized why AA probably saw no value to giving advance warning. If you give advance warning, you give consumers and media two opportunities to complain. If you don’t, you just go through one media firestorm. Clearly, nobody’s going to quit flying AA over this so I don’t see why they would care about our witching as long as they succeed in chasing away the freebie seekers.
DL and UA hard product are both better out of SFO than AA could ever hope to be……..and now that they are aspiring to SkyPeso with their new American Penny program they will drop like a rock…….you’ll think you died and went to US Scareways hell in just a few months…….
@jen – yes
peachfront: Nobody’s going to stop flying AA because of this? Sorry, wrong.
The 3 majors and WN have screwed us recently, with more clearly to come. Hereafter, I fly by price and schedule. No more worrying about status.
Done with these jacklegs.
Considering how poor their communication has been with their members has been post changes, that’s a huge second strike in my book. The email they sent didn’t mention the majority of the changes. Not honest or open
Say what you want about united – they were upfront and gave ample notice on their changes.
And if you believe that they were honestly “shocked” at the uproar, then I have a bridge to sell you
I guess I’ll be the lone voice in the comments and say I 100% agree with you, Gary. I’m giving AA one more chance. I’m still flying them, but like you, I don’t accumulate miles from credit card spend at AA. I put the miles in SPG and transfer if needed. I’ll not transfer to AA if they f’up again. I’m still a loyal AA flyer, but no longer an AApologist. Come on, AA, don’t f’up again.
No, I don’t trust AA. I was one week out from booking a north Asia route using my US miles. I was waiting til my return date came available in 2015. And no advance notice? Shame on them. Trust, once broken, is lost.
The only meaningful apology is a reversal of the policy with change notice similar to what UA and WN provided for their recent devaluations.
If a house guest steals $20 from your wallet you can forgive and forget AFTER he gives you back the $20. No retraction from AA = no trust or sympathy from me. Just AAversion.
Gary, though I normally respect you and appreciate your judgement and point of view, I ask you to pass a message on to your dear friend Ms. Rubin:
These surprises are a slap in the face, plain and simple, that there are real consequences for John Q. Flyer, and John’s family.
American had a choice, and chose to blindside that family of four who had saved and planned for a dream trip to Europe. A chance to see what life is like in front of the curtain, what goes on behind the frosted glass door, what it’s like to get off the plane before the cleaners are up to row 15, and what it’s like to choose a drink during boarding.
Now the choice is stark: chop four days off of the vacation and fly coach, or don’t fly at all.
The new American, “Where we take AAdvantage of your trust!”
@Carol, US Airways has never given advance notice of changes in the past. Recall that the January 2010 award chart we’ve been working under the past four years was simply changed overnight. It was originally a crooked scanned .pdf even, really rushed online in a slipshod manner. Business class to Europe was 80k before that change.
(Warning, internet grammar police post) When you say “different tact” what you mean is “different tack” (a sailing term).
I agree with the substance. Let us remember that while the name of the post-merger airline remains American Airlines, the actual airline that continues to operate after the merger is US Air.
Gary has gone from credible and informative to being a mouth piece and PR source for the industry.
it doesn’t matter what they do, Gary finds a way to gloss it over. every media interview he does comes across as endorsing the offending company, to which he will blame editing (hint: that editing is on YOU. you want the free publicity for your blog, so you give the media outlet free reign with quotes). i have been quoted both in print and video before. in ALL CASES, i was given sign off authority as to how my quotes were used so i was not surprised by context changes thru editing.
you’ve been at this a long time, Gary. you’re not some babe getting your quotes manipulated. that’s just your spin to your readers to deflect responsibility.
the integrity of this blog is such that there is no longer a reason to read it.
It’s a pretty strange world I think when I lead with all of the changes and call them all negative, say that my basic framework is to assume that the airline is going to get worse from a consumer perspective, say that the WORST thing they can do is changes without notice.. and then conclude by saying that they get ONE more chance in my book..
.. and am called an industry mouth piece.
@abby Has anyone’s words in the mainstream press been harsher than mine on these no-notice changes?
Regarding this?
>>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).
Do you mean for international travel only? That’s the only $35 fee I see on aa.com. Can you show your source? Thanks.
@Jerry – tickets issued by AA travel centers are now $35 unless it’s for an Executive Platinum
http://www.aa.com/i18n/utility/aacom_services_charges.jsp?anchorEvent=false&from=footer#ticketing
Lack of notice is appalling, but it becomes sleazy when combined with the fact that they offered a miles-purchase bonus (presumably to entice people to buy miles) in the days immediately preceding the unannounced devaluation. I respect their legal right to change the program on whim, but acting legally and acting in good faith are not synonymous.
Gary – love your blog but disagree with you here. Now AA has to regain my trust. Already wrote to Customer Relations, tweeted, and reached out to my sales contact who was totally unaware of the changes himself.
Completely disagree with you, Gary, and agree with JD. A massive corporation like AA made a conscious decision to make changes with no advanced notice. They did it once, they will do it again. If it takes more than one time for you to learn, it is 100% your mistake.
I think AA would regain my trust if they said oops we should have given notice of these changes and delay changes by a month or so.
Because the PAYCHECK comes form them (no shame or self-respect).
Next time you talk to AA you may wish to point this out to them: The next time the economy tanks (and it most certainly will) and they need our $s to keep afloat we’ll remember this. How they treat us when times are good plays heavily in our decision making when times are bad and everyone wants our business. This was a major, major screw up on AA’s part and, the funny thing is, they have no idea just how hard this will come back to bite them in the *** down the line.
@ff_lover are you referring to me? I get no paycheck from American, or for encouraging folks to get the Citi Executive card… no matter what you think of this week’s news, 100k miles after $10k spend within 3 months and a $200 statement credit remains an awesome deal. (You wind up with 110k miles which is enough for roundtrip business class between US and Southeast Asia on Cathay Pacific for instance.)
And let me be clear about what I’m trying to do here, in my own small way.
The changes they’ve made, they’ve already made. They’re not going to undo those.
They’ve already made those changes without notice. What I really want is for them not to do it again.
Making my bright line something they’ve already done is useless. I am hopeful the heat they’ve gotten can be channeled productively so that we wind up with better action in the future.
It may not work but it’ll work better than saying trust is dead it doesn’t matter what they do in the future.
I’m with nsx here. A reversal of the policy with a reasonable notice of impending change is the only way I’ll be able to trust them AAgain.
In the meantime, this EXP–who’s been with AAdvantage since 1982–has made four bookings with UA over the past two days. Loyalty ain’t a one-way street.
Gary, I agree with #14 Tom that you’re getting raked over the coals a bit. But you and Tom are clearly wrong regarding trust, and it’s by your own words. Many times you’ve written that points/miles are simply a form of currency, which continually devalues; and you’re spot on. By logic then, if a government devalues its currency (even if minimally), should people and markets still have trust? Human history shows the answer to that question is 100% NO.
The change in game here is a big emotional loss of aspirational trips and feeling smarter than most folks (e.g., NoAm Stopovers, Off Peak pricing, etc.), which have been eloquent components of your blog at least while I’ve been reading it since 2009. If the airlines’ race is toward revenue-based rebate programs (e.g., WN, DL), then there is no basis for loyalty, trust, or any other emotional reaction, just as a normal person wouldn’t have emotions for Dollars vs. Euros vs. Yen.
The challenge then is to keep finding programs with value beyond rebate (e.g., LifeMiles, ANA, MileagePlan). I highly value your opinions/guidance on that challenge. Otherwise, as other commenters have said, it’s simply better to find the best cash back card for daily spend.
Perhaps you are confusing your travel planning of your award service clients, with those of your readers. Not everyone can plan trips months in advance. The value of “Anytime” awards was a unique “AAdvantage” for many on close-in bookings.
Now “Sky Pesos” are worth the same to me as “DougVantage” miles, & we know how much you value “Sky Pesos”.
I don’t think that I can agree with you when you say that you still trust them because this may be a one off. I think that you are confused about who you are dealing with. While Ms Rubin is from AA, all of the people who make the decisions are from USAirways. I think that you have to adjust your thinking and realize that this is not a one off and it is not AA. This is USAir and this is just the latest in a long line of decisions showing their disregard for their customers. I was very harsh in my comments after the first post, accusing you of at least appearing to be in AA’s pocket, but I don’t think that is the issue. I think that you have been so enamored with AA for so long that you don’t even realize that 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.
The term trust is not something I have ever felt with these programs. Hotels and air included. I expect rate changes, point changes etc. I expect more of this in the future. Why don’t those unhappy about these changes flood their facebook page and twitter. If enough people bother they wont be happy to see all those negative comments.
Sorry but I’m starting to agree with Abby. The statements made so far have me wonder if even had a little inside knowledge of these changes. Coming out to say the changes are no big deal is a little ridiculous. Eliminating 2 award categories and quadrupling the price of some awards IS a big deal. There is no way to argue it is not. Even DL now beats AA on many awards I’ve checked so far. Please give me a break. Finally some of this is completely at odds with what Parker has told us so far, and with what he said to the DOJ. Why would anyone trust such a liar?
We should have a pool on when systemwides and domestic upgrades will get whacked. Any thoughts?
Gary, Gary, Gary… Now that you have gotten national attention your objectivity has gone out the window. Next time Ms. Rubin calls you, you can tell her that your fees have doubled. Let’s hope AA does not ever turn on you!
Well gary – as you sorta said it before, last out, please turn off the lights.
Hope Suzanne showed you where the lights were!!
I read through your post. You know what happened was done incorrectly, and you know it’s going to get worse. But you still trust them. Really? It is not a fear of the unknown. It is a downright certainty what the new american leadership is going to do to the once respected American Airlines of old. I trust them to totally nickel and dime me to death for fees, give terrible customer service, offer a terrible hard product and offer me a coach seat for 50,00 miles one way. And you could rest assured that likely your flight will arrive late and your bags will not arrive with you. American has been just about my only airline since 2000 but I am done with american airlines. Gary you need to wake up. American is the new Delta!
Gary, love your blog and don’t feel you are a mouthpiece. I wonder what will happen once the big evaluation occurs? Certainly there is going to be one: especially with US/ AA selling miles so cheap. I sure hope they give us notice when they do Devalue, which I think is what you’re aiming for, no?
Love your blog but let me try to summarize your long-winded convoluted post.
“Here’s Why I Still Trust AAdvantage. They’ve only screwed up once.”
@Silver Springer,
I remember writing that we hoped UA would say We’ve heard from our best customers… but we never heard from United. And we won’t hear from AA/US either.
“It may not work but it’ll work better than saying trust is dead it doesn’t matter what they do in the future.”
I disagree. If you attentuate your criticism this time, AA will expect the same treatment next time, no matter what warnings you gave. And they will do this AAgain and AAgain.
The best strategy is to make the loudest possible noise now, so that they remember it next time. Given the purportedly light use of the devalued features, we even have a shot at a short-term reprieve which would indeed win back most of AA’s lost credibility. You shouldn’t give up so easily on that.
But, hey, you’re the one who talks to these folks regularly. I’m just a customer who insists on being treated fairly. That and $3 will get me a Starbucks coffee these days.
People think that USdbaAA is going to jack up their AAnytime awards 2x and let there still be SAAvers? Ha! Maybe they’ll give us a little while to wean us off while they cut SAAver availability down to a trickle. Then one day we’ll wake up and they’ll have hacked off the SAAver part of the chart. There will just be AAwards – 1, 2, and 3. It’s clear that this is where this is leading. Only question is how long. And they haven’t even touched the partner awards either. Until they do – good luck being one of the tens of thousands of AAdvantage members trying to grab one of the 2 seats some partner opens up on its two flights a day to wherever. No way you’re getting out of the US on a SAAver award with AA metal – they’ve locked that inventory down to nothing.
You have never gave any other program another chance. Read the comments, and still think your right? I’m sure you.
@Gary: First, you quotes in the mainstream press, which are the ones that really matter because they set the tone for the mainstream article or report, are always very softball.
2nd: When your article title and conclusion is that you still trust AA, that pretty much says it all. The truth is, even reading between YOUR lines, that we CANNOT trust AA. As you say: US Air never gave notice. Now, we have seen that S.R. is on the US Air team and BOOM- no notice. Ergo, going forward, will we have any notice? NO!
You know this- you even say it. Thus, your advice, one would think, would be, “DO NOT TRUST AA EVER AGAIN”, and burn what you’ve got before the value is cut in 1/2 or by 2/3 overnight. because that is what they will do.
So… tell me, given that fact and that you note that fact, what exactly do you trust? the only answer i can think of is that you can trust them to f— those stupid enough to hold their miles in the dark of night with no warning. And, that even already ticketed awards will not be grandfathered (think gateway stopovers on existing awards which now cannot have any date change- killed in the dark of night by ‘trustworthy’ AA).
As bad as the UAL (or Hilton) devaluations were, they gave people ample opportunity to burn miles at the rate they expected when they earned them. I trust that when they devalue again, we will get notice again. Anyone who now expects AA will give us notice of anything is a fool. I don’t think you’re a fool Gary. So your message to your readers should be genuine. something ‘I still trust American’ doesn’t exactly scream…
Everyone has given their 2cents but the question is, what are we going to do about it？ Is this group really big enough to hurt AA on their wallet？ if not AA will just continue to ignore your 2cents and we can continue gripping until we are blue. It is all about dollar and cents and if we can hit their bottomline then we can all spend all our AAdvantage and enjoy it while they are soaking. Cant wait to see that day.
@abby 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!