A Big Lesson Learned for American: Respect Your Members

Now that I’ve had a day to reflect on the changes American announced to their frequent flyer program (not to mention to the US Airways award chart and to checked baggage allowances), more and more I think the lesson in all of this is about member respect.

A lot of readers gave me flak for not recognizing the gravity of the changes themselves. And while I will personally miss stopovers at a North American gateway city, and the hidden value in distance-based awards, I just wasn’t that surprised to see them go. My frustrations remain with the lack of notice, and with how that sets the stage for all of the other news that is still to come.

  • Double miles awards were always done for. United and Delta were already triple for premium cabin international awards (and United doesn’t even offer last seat availability to all members at those prices). US Airways was way out in front with the multiple tiers. And US Airways has blackout dates even. So they were going to have to fight a real battle with revenue management for AAdvantage just to be able to buy those seats. I loved the old system. I’m really sad to see it go. But the writing has been on that wall a long time.

  • The oneworld explorer awards and stopovers at the North American gateway city were expensive components of the program that I think they saw as limited value. I’m not saying they were of little value, just that from the program’s pespective they were high cost and low return. Suzanne Rubin said that some of it was IT integration-related, too, and that’s probably right in terms of their looking at the costs they’re facing. Already they misprice the North American stopover quite a lot. US Airways doesn’t even have one way awards now. So as they go down the list of things US Airways has and American has and what they’re going to do going forward these probably seemed like easy kills… expensive when they’re redeemed, hard to service (technologically and/or agent training), benefiting a relatively small portion of the membership.

The piece that’s really disappointing is eliminating oneworld explorer and stopovers overnight without notice. Several commenters here mentioned they were saving up points, had maybe 350,000 in their account now, almost had enough to book a distance-based oneworld award for a honeymoon and now that’s gone. American should have said the awards will go away, you have a certain fixed amount of time left to book them. Pulling out the rug from under members who have been saving their points for a long time is simply beneath the dignity of the program.

I wasn’t expecting to hear how surprised Suzanne Rubin seemed by the reaction to the changes, she had her talking points about how they’re really giving notice, and American’s public relations folks wanted to remind about the great product changes that are happening at US Airways as part of this (nothing new today on that). But then Suzanne said they’re going to have to take this customer reaction into account next time. I hope she does.

American’s e-mail blast to members about changes today said this about awards:

Redeem for less Effective today for travel starting June 1, 2014, a one way AAnytime award now starts as low as 20,000 miles plus applicable taxes and carrier–imposed fees. Plus we’ve lowered the minimum number of miles needed for AAnytime awards to popular destinations like Hawaii, the Caribbean and Europe. Our lowest AAnytime mileage levels are available for more than 50% of the year. Don’t forget we still offer MileSAAver awards that can be redeemed for as low as 12,500 miles each way, plus applicable taxes and carrier-imposed fees.

When I had my op-ed in USA Today the week the merger got the green light to go ahead one of my three key pieces of advice was to treat members with respect, no talk about enhancements when you’re taking things away that they value.

Here’s how I concluded that op-ed:

Value your customers, and be honest with them. Jeff Smisek, who was the CEO of Continental when it took control of the larger United, made a cameo in his new airline’s safety video and told passengers he’d make some changes they would like.

Wrong. Those changes included taking away upgrades from million-mile fliers, reducing bonus miles for frequent fliers and increasing ticket change fees.

Creating the world’s largest airline brings with it a great responsibility. By providing a better product, at a continually better price, the new American will grow its size and profits. But if its sees customers as the enemy, customers will fly with someone else.

Today’s changes were pretty predictable. But there’s going to be a lot more changes where American and US Airways are different. In some cases they’ll pick one system or another, and in other cases they might do something completely different. But to name just a few — how upgrades work, and the overall award chart — there are going to be a lot of unhappy members no matter what they choose.

US Airways members won’t want to pay for upgrade stickers. American members who have benefited from a higher upgrade percentage at a lower tier than they otherwise would have because they aren’t competing against every elite every time will find themselves frustrated by unlimited complimentary upgrades for all elites.

How many systemwide upgrades will top tier elites get? Will there be any fare restriction attached?

There are lots of changes to come, everyone is going to be unhappy with something. The key going forward is to communicate with members honestly, and with respect, with an explanation for why choices are being made, and with advance notice.

In other words, to do it very much not like today’s (relatively minor in the scheme of things to come) debacle.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. @Bourbonexponent I think you’re better off with points which transfer to a variety of frequent flyer programs (like Chase Ultimate Rewards, American Express Membership Rewards, Starwood Starpoints)

  2. @Gary Appreciate you may not have a direct financial interest per se, but to dismiss the removal of RTW awards as “one’s you probably don’t ever book” indicates how far removed you may be from most people who collect frequent flyer miles.

    The thread on this topic on FlyerTalk is littered with people who have been faithfully flying and collecting miles on AA in the hope that at some point they might redeem for a Business or First class RTW with their Significant Other. They don’t have miles raining down on their account from affiliate commissions with which to regularly try premium cabins on short trips to exotic destinations. They read blogs like yours in the hope that one day they could visit those destinations in premium cabins on a RTW award.

    They might have expected a devaluation, but not elimination of these awards. For them, the loyalty they have mistakenly shown AA is affected to a greater extent than any UA or DL award chart inflation would have. Even though they “haven’t ever booked the award”.

  3. Your headline makes me laugh! Do you really believe that American has learned a lesson? That is just absurd! American knew exactly what they were doing and they would do it again. Look at their email sent out to explain the changes they made. They don’t even mention anything at all about the negative changes being made. If this would have been Delta you would have had an entirely different take on this type of deceit and terrible customer service. American Airlines cannot be trusted. It is pretty obvious you are partial to American – lies, deceit and all.

  4. @Trent It wasn’t my intention to be flip, just to communicate some context succinctly and in that I probably failed. You may spend too much time on Flyertalk. The oneworld explorer awards were really very rarely booked, most agents wouldn’t book more than one in a year. They’re a big deal for members who want to go to Australia and Africa, and I’ll be explaining why in a post a little later this morning. And I offer why doing so without notice was a huge deal in this post. But relative to changes that affect the vast majority of members which some other programs have done, these so far are reletively cordoned off. Which is why I think the big issue is notice rather than the substance of the changes themselves.

  5. Hey Gary,
    Thanks for your repy. I am not a member of flyertalk and I have not been on the flyertalk website for at least a month. So you are misplaced in your assumptions. I am just calling them as I see them. Lower level saver redemptions are going to become an urban legend that you can actually redeem for on American. They are heading down the Delta path and they will implement it in stages. I am just wondering when you will catch on.

  6. I can envision the conference room where this all went down. One person says if we make such changes without any advance notice some might not be happy. The other guy says, “screw em” we will give no notice and send out an email that the program is so much better. They laugh and head for an expensive lunch with wine to celebrate how smart they are.

  7. @Trent Your comments are well stated, the same with others here. They want to make that standard 25K redemption 30-40K at minimum.

  8. @robertw – I’m pretty sure, whatever discussions happened, that they weren’t followed by an expensive lunch with wine (given management-level layoffs that happened this week at AA).

  9. @Bourbonexponent said,
    “Quick question: Given today’s AAdvantage devaluation should I continue to accrue credit card miles on my AA Citi CC – or – on my British Airways Chase CC?”

    Contrary to Gary’s self-serving advice to go for cards with “flexible points” you should go to cash back cards. Enough cancellations of airline-branded credit cards will get their attention.

  10. I think some underestimate (what was) the value of the AA anytime award for last minute tickets. I’ve gotten over $1k in value from 25k miles (& a close in booking fee) even on a 1way domestic coach award. I just got the 100k AA card in the mail. I called Citi & cancelled it as I won’t pay hundreds of $ in fees & spend $10k without knowing the value of those anytime awards AA purposely left blank.
    There are (2) words that sum up AA’s new philosopy:”Doug” & “Parker”

  11. The idea that someone has “learned their lesson” generally includes the assumption that they learned it due to negative consequences. Unless I’m missing something, AAdvantage has not seen any negative consequences from their no-notice changes. Sure, they had a few mildly annoyed (surprisingly so) blogs posts but other than that the changes appear to have gone through without negative consequence.

    I’m afraid the only lesson they’ll actually learn is that no-notice changes won’t hurt them at all.

  12. @Gary – Took a closer look at award availability today. This is part of my honeymoon planning.

    Looking for just one segment, Santiago (SCL) – Miami (MIA), one way in business class, there were a grand total of FOUR dates available in the award calendar at the SAAver level for the ENTIRE CALENDAR. All four dates were in the next two weeks.

    If that’s not a devaluation, IDK what is. I suspect we’ll begin to see the hurt more as people do further, more in-depth analysis.

  13. Is there any place to complain to AA for the no notice!??
    I too was FINALLY looking to use BOTH this year.
    Explorer award, and two free one ways!
    So disappointing!!

  14. They’re not doing away with one ways for 12,500 miles are they. I realize the chart shows one-way but Delta also did this but you still had to do roundtrip.

    Tell me there is no change in one-ways and Gateway stopovers on International awards!? That would be really terrible, to yank away so much.

  15. All bloggers are AAPimps. Their only frustration is that they were not given advance notice, and not that it happened at all. Oh, how they would have jumped at other airlines and advertized to the whole world about coining the term skypesos and such. What a disgrace that they promote the AA miles chief’s position as genuinely surprised at the reaction. What was expected? – a standing ovation. I am losing faith in these self-serving Pimps.

  16. @Adam:
    See my post #41 and #44 and you can read the following. You SHOULD also send by mail since I hear they HATE to actually get mail. It involves more work on their part :-( but oh we’ll, “stuff” happens. I will see if I can find a phone number for you too (other than whats actually listed online)…anyway, Here’s a review in general:

    I’m willing to bet that not even one person has vehemently expressed in the greatest detail their displeasure, mistrust and outrage to each of the following:


    Commiserating here or any other forum won’t do jack. Not that it’ll change things but at the very least perhaps it’ll help get their thick skulls aware of their extreme anti-loyalty behavior. Let them know in no uncertain terms how this affects you and your future spending with them (aanus).
    On a related note, I have a client with 3.5+ million miles and they’ve done what I’ve suggested. Not only that, today they’ve purchased* $82k premium cabin tickets for their next trip on a head-to-head AA competitor (versus spending $52k with SuzieQ’s airline). They’ve not only written to the aforementioned douches but have scanned ticket copies showing all the details. I’d like to be with Suzie when she opens that email. :-)

    * Their last minute plans jelled yesterday and decided to book the Explorer Award. They couldn’t confirm it online, so they called. American’s reply? Verbatim: we have three seats available which you can purchase, or you can contact customer relations. (They hadn’t heard of the abrupt change prior to starting their booking). Their response was in essence, “stuff it”. It’d probably make a great MasterCard “Priceless” commercial.

    Let’s see, the net loss on this one transaction is: $??,???.00 ? Hmmmm

    So email, tweet or write if you feel you’ve been, politely put, “done”. And each time you fly, don’t go by way of Aaus then scan and forward your copies. Trivial? Maybe. But wth.

    Sean Bentel
    Director of Customer Relations
    (817) 967-2116

    Doug Parker
    Chairman, president and chief executive officer
    (480) 693-6775

  17. @greg – there is no change to 12,500 miles each way for saver awards and you can book those one-way only if you wish.

    There is however the elimination of stopovers at international gateways.

  18. @Ct, did my bit, fired off a whole bunch of emails. Will not cause a rollback, but at least the clowns should know that what they do will not go down unopposed. One world explorer reward was the best thing that I have been using once a year.

  19. Why would they do away with Gateway city stopovers. Anyone can see that this costs them nothing! In fact it saves them since there’s no chance you’ll miss your Gateway connection and need to be put up in a hotel or otherwise accomodated. So the only reason to do this is just to be mean, like some Mr. Potter plucking his moustache wondering how he could be meaner to people today!

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