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.
- 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!