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.
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Amen, Gary. Loyalty is a two-way street and, speaking who is a huge AApologist and flies well over 100K miles with them, the fact their was zero notice is insulting to say the least. And the disingenuous e-mail only highlighting the 20K awards is nothing more than putting lipstick on a pig. The race to the bottom, unfortunately, is nearing the end.
There are other frustrations which defy the most basic common sense. Why on Advantage am a locked into FLL-ONT when I’d have many more choices to take advantage of a (generous) policy to allow free date changes if I could fly into other local airports that are co-terminals in all but name, and which are displayed for LA and MIA areas whenever I do a search? This would cost them nothing and help evenly distribute traffic. Instead I must pay $100 to change to MIA-LAX when I’m not really changing origin or destination at all, just needing to get there on that day. This also contradicts that I’m allowed to use any area airport for the legal stopover on an Int’l ticket, not just LAX.
The lesson learned is burn your miles now – I don’t think this is the last devaluation – just wait. How can something be so costly (Oneworld Explorer awards) if they are claiming it is seldom used? Makes no sense, sorry.
I concur with your comments.
I am struggling with how Ms. Rubin could think she gave notice. There was no advance notice, and the email had none of the negative changes. I have high respect for her but now I’m wondering whether she’s as sharp (or as honest) as I’ve given her credit for.
I expect AA to sink to the bottom because they can
Have already started shifting my business
Dallas to San Diego to Virgin America 135 one way
on American 335 dollars
if the program is worth little then I want value and experience
I may just throw in the towel on American and they haven’t even merged yet
I was thinking of UA which requires $100 change for O/D. I believe it’s actually $150 on AA. Either way I won’t pay it, and when these “fines” mount up it begins to reverse the goodwill intended by the hard-earned (in my case) award ticket. To allow it to breed animosity makes it a case study in bad management at business schools. Just to allow one-free-change on the small stuff would be a huge relief valve.
…next time, promise?
I travel from Asia to the United States quite often and make a lot of use of gateway stopovers in the west coast as well as New York before proceeding onto Boston.
I will miss this part of the aadvantage program the most.
Our family has banked a lot of miles with American and although we know that there will be a lot of changes in the program in the next few months we were quite shocked that this feature was pulled out of the rug from under us without any advance notice. I would have preferred a six month grace period to phase in the new provisions. It just disappoints me that it was done this way. I am sure a lot of us feel this way with the anytime awards being priced as high as it is now.
I hope American takes a deep look at the experience with Delta and United Airlines and draws good lessons from it.
I planned on using the free stopover in the next couple of weeks, saved up the miles for that trip, and am now just really upset about this no-notice change. Quite frankly, I find it insulting to pretend there was notice given.
@Gary: following your argument that flexible currencies, such as those from Chase, Amex, and Starwood, are the best way to guard against these types of no-notice changes, do you think Alaska Airlines is a good in-between to consider?
@jan I think Alaska is a good currency but you’re entirely subject to any changes they pursue in their award chart, so not really, although i don’t think now is when they’re likely to devalue since they’re in a pitched battle for seattle with detla.
It’s too much all at once. Ok I don’t happen to be one of the lucky ones who have all these miles banked, so as far as the deval of their miles, I can understand their frustration but at the same time what’s going on now is this.
You have one company who claims they are two when we know they are not. Then there’s going to have to be a thinning of the herd because let’s face it there’s just going to be way too many elites to make it worth being elite at all. So then you have to ask yourself well do I want to be one of the people still here when this is all put together as one. And to answer that question, you have to know what “here” is. Is it going to be the US Air flight attendant charging you for a coke? Is it going to be the phone agent who won’t even let you use your earned upgrades and who tries to simply obfuscate at all junctures?
Why would I want to be one the people left standing after they thin the herd? Warm nuts and a glass? You know what? The others are so bad. That might just do it lol
A lesson learned? Sounds like the opposite. Basically they don’t care. This may have once been a loyalty program but not anymore.
I used to fly only AA for many years and I have over 3 million lifetime miles with them and “lifetime” Platinum status but now they have no decent way to get to South Africa (used to be able to go on Cathay via HKG) and it’s hard to avoid the punishing BA fees. Going south to Mexico, etc. is still good.
So, I am no longer loyal and I guess they aren’t either …
Gary- most people indeed were pissed about your original post wording since most people do take advantage of those features AA just terminated without notice.
It is good to know that you acknowledged their frustrations.
Again, devaluations are to be expected but devaluations without notice, especially from AA is just pathetic.
I doubt AA will backtrack and give their members a few more months to redeem under the old rules but here’s to making our voice heard on social media
Tweet or facebook message “I like JAL because they don’t make changes to their programs with ZERO advanced notice. #flyoneworld #flyanythingbutAmerican”
At least they haven’t converted to a revenue based system….yet….
This sucks and they suck.
…and so it continues. Just got an email rom US (I’m AA EXP and US Gold) touting even ‘more benefits,’ one of which was an awesome gem:
Mileage upgrades
As of April 23, 2014, the mileage upgrade fee will now apply to Preferred members on US Airways flights. The fee will continue to be waived for fares purchased in Y or B.
This bothers me because they are not learning from past mergers where the worst of both options were chosen. The upgrade co-pays on AA are ridiculous, esp to Hawaii, and at least UA has the brains not to charge them for elites. It’s something so small that fosters good-will. AA is already getting revenue from sticker charges, why do they need to go after this too!? Just pick one or the other, don’t fleece your elites. I digress…
No-notice devaluations are becoming common because blogs are doing a much better job of keeping customers informed. When a company has to choose between loss of goodwill and a run on the mileage bank, guess which one they will choose?
Gary, do you seriously believe that AA or any other company will weigh customer perceptions more heavily than financial cost the next time they decide to announce a devaluation? I don’t. Zero notice is the new normal. We need to adjust to it.
Is there any other major carrier which does not allow any stopovers on award bookings?
And where’s the followup article ‘A lesson for View from the Wing: Respect Your Readers’ after today’s quality?
@Sam – Delta does not currently offer one-way awards at all. We don’t know when they introduce those what the stopover rules will be.
British Airways does not allow stopovers, they price each flight *SEGMENT* separately.
Virgin Atlantic doesn’t allow mixing of partners on a single award.
American was already pretty restrictive in this regard though
@nsx – I don’t see how the tradeoff in giving notice is “customer perception vs financial cost” — notice isn’t that costly, though there could be a brief uptick in redemptions. Negative customer perception comes at a real cost. And as for notice, even United gave three months’ before their big devaluation. Heck, Delta just gave us 10 months!
I find it interesting that no frequent flyer program seems willing to talking candidly about their programs and treat their members like adults. Like when you truly add something, crow about it. But when you need to take something away (and let’s face it, AA needed to change that US Airways Asia biz class award), you explain why you’re doing it, give some reasonable notice (say, 60 days) and move on. You don’t send out an email talking about trivial enhancements and ignore the bad stuff. Yet, it seems, no frequent flyer program is ever willing to do that.
Folks, they weighed-in all your input before they made the changes – they don’t care what y’all think. Sorry.
@Tyler if you feel that it’s disrespectful for someone to disagree with you…
I save up enough miles and was planning a global trip with One World Explorer award. Now it is all gone. For that, I hate American Airline and US airway to ruin my dream! And I hate that judge approve the merger because he creates a big evil monster. I am also writing to my Congressman and Senator to my state. Who knows what they are willing to do but I have to do something.
@nsx, I’m not sure no-notice is the new norm yet. UA, SW, Hilton, Marriott, Hyatt, Delta (most recently)… all the major players I can think of, did give notice. AA/US is the exception.
Disagreeing is fine. Trying to push Chase credit cards during a time when everyone is already annoyed is poor quality.
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? My concern is that AA will now further restrict my ability to use Avios to book future award travel on AA using an advantageous number of AA miles (i.e. before today’s devaluation).
Every program pulls out the rug from those of us who have been saving. Really it is no different than united raising he price of awards and giving you a limited time to redeem at the old price. That doesn’t work for those who cannot fly in the next year or for those who cannot achieve the target before it changes. So many people always lose when the program changes, it is just a question of how many.
Personally I think the programs should be required to lock awards at the old level for hose who have old miles, like delta changed its program to skymiles. But things aren’t looking too good for frequent flyer rights in light of the horrible decision fromSCOTUS. Airlines pretty much have carte blanche now to gut their programs without notice.
@ CanesLawMarty:
“The race to the bottom, unfortunately, is nearing the end.”
No, I am afraid it is not.
Any guidance on things we can do in advance before more negative announcements?
I don’t see the point of gutting Explorer awards, which is probably today’s biggest award program change. It wasn’t a loophole. It wouldn’t be that expensive to support (you’re already calculating distances to award mileage, and could train a team of Explorer award specialists instead of every Joe Support guy out there).
It was a unique value proposition for the AAdvantage program that they knowingly removed without advance warning. I do not understand the motivation. Based on the comments from your earlier article, it’s clearly brought in business.
I’d consider pressing Ms. Rubin on this particular point. I believe her team may have made a mistake.
@Gary,
If I were Suzanne I would contact the three of you (TPG, OMAAT & VFTW rather than real journalists) because of your ExPlat status, continuous praise of AA and access to a small but active frequent flyer audience. In return I would hope for relatively favorable reporting (in contrast to real journalists). Be careful what “access to power” does to reporting. I think we have seen signs of it on VFTW today.
Gary
as @ABC says poiltely above, yu are just an AApologist.
Tell us the difference between what Chase anc Citi pay you for a link vs Amex. That is the real story. I think with most of the bloggers, that is the problem, they have gone to the praise of the best payer and not the best for the reader.
DL after all this is a MUCH better program within the US. The planes are better, with wifi and they run on time a lot
UA is better for me from IAD for intl flights and partners TATL
The only thing US/AA has for me in WAS is that DCA is an easier airport to fly out of, but since I cant get all transcons from DCAand have to connect from ORD/DFW/CLT/PHL/JFK, it is no better than DL connect at LGA/DTW/ATL/MSP
For intl awards, AA may be OK for now, as saver rates have not changed. UA raised their partner awards and DL has terrible intl awards.
So to anyone in WAS, my advice is to fly DL/UA for domestic from DCA/IAD and spend on an SPG amex or sign up for a lot of 100k citi offers and go out on AA awards.
@Boraxo, disagree UA advanced notice wasn’t helpful. Not only did they allow us a few months to book awards at old rate, but their change policy on itin booked pre-deval has been very generous. That’s the right way to do things if you’re going to have a devaluation. The new AA has turned into a monster in comparison.
@ffi, to be fair to Gary, he defended Amex during the “one bonus per lifetime” announcement.
The airline industry in the U.S. is currently one big oligopoly. Airlines can treat their loyal customers however they want because we are so limited.
Most elite FF do not wish to fly Southwest/AirTran, Spirit, Frontier and etc. so they will push through as much as they want.
THIS is the new American. It sets the tone. Acting surprised of the reaction is even more insulting.
Don’t like it? Who you gonna fly? United? It’s even worse there.
This is what mergers are all about. Cut Cut Cut. Cut benefits. Cut staff. Cut flights and cut hubs. It’s just this type of thing that the DOT saw in those US Airways emails where they opening talked about all the cuts they couldn’t wait to make once further consolidation happened.
This is just step one. Buckle up folks.
While things are going great for the airlines today, what’s going to happen when there’s another recession? Throwing American Pesos at me isn’t exactly going to win back my loyalty.
I understand why everyone’s pissed off, well, most everyone. Has ANYONE actually sent ANY emails of substance and expressing how they’ve SCREWED YOU, your family or any plans, current or future directly to any of these jagoffs?
Suzanne.rubin@aa.com
Thomas.horton@aa.com
Jon.snook@aa.com
So Gary, why are the four of you (VFTW, TPG, MILEVALUE, OMAAT) failing miserably to promote direct contact with these clowns by exasperated members to express their exceptional displeasure and incredulous feelings at how they’ve been screwed??? Why pussyfoot around with these jagoffs? What’s the problem??? Looks like being an AApologist position along with the other three noted above has come back to bite you guys in the a$$, n’est pas?
@ffi Gary is an AApologist because that’s probably where he earns more from referrals than with Delta and United.
His dismissal of the elimination of oneworld Explorer rewards as “awards you probably don’t ever book” shows he prefers talking his book. Whilst these may not be booked often, saving up miles to earn a once in a lifetime round the world holiday in premium classes surely ranks as one of the most ‘aspirational’ rewards you can save up for.
Lesson is to base your loyalty on schedule, service and price, not on Ponzi schemes which can, and will, be continually unilaterally devalued at a moment’s notice and a constantly touted by bloggers living of their referrals.
Gary-
I think you missed my point in asking if AA is now the only major airline that does not allow stopovers.
Delta not having one ways is not the issue I asked about. In fact, one can book a RT on DL with a stopover. No one can now do that on AA. One can book an open jaw on AA using two one ways, but neither one way can have a stopover anywhere. On this one point, it seems DL is the clear winner: You can book a stopover on DL but not on AA.
I do not think BA is a major program for international award travel given the Avios structure and I am surprised that you suggest otherwise. Even then. BA’s segment pricing means stopovers do not require a new, full priced award. AA now does require a separate, full priced award. A trip to Europe on AA with a stop in New York for a few days now costs an additional 25,000 miles in business class. Maybe I read it wrong but I thought your commentary to suggest that this change corrected some sort of low pricing in the past. I just can’t figure out how it costs AA more for me to fly on to Europe on Friday, rather than continue on Tuesday. The one ways to Hawaii, etc. were another matter but they didn’t just change those, they changed them all.
Virgin? Major program? I don’t think so and while I am sure they watch pricing on all flights, I doubt AA structures much to compete with Virgin.
Missing posts??? Reasoning will be appreciated.
Fr those pissed off, why not provide these details, or are your more loyal to these clowns than your readers?
Suzanne.rubin@aa.com
Thomas.horton@aa.com
Jon.snook@aa.com
I know people don’t like it, and maybe don’t want to hear it, but as these MAJOR changes happen to programs, and as more and more people collect miles almost as currency (I’m speaking of the general public, not the FT public), I think we are going to start seeing more of a move to regulate miles/points as a virtual currency. I see no MAJOR difference between points/miles and something like Bitcoin, in that neither are government regulated, and both can be exchanged for goods and services. As the airlines continue to spin off the loyalty programs so they don’t really have a connection to flying at all people will begin to see their ‘savings’ fall by 1/2 with no warning more often, and this will cause lawmakers to propose laws to protect it. I think AAs move added to this, whereas UA may not have helped, but they CERTAINLY went out of their way to give everyone advanced warning and the ability to book at the old rates. People still view this as airlines, but they aren’t…they are machines spitting out a currency who may also happen to fly planes as a side business.
@Tom this is why the general public should be LOUD against mergers in most all regulated industries. They NEVER end up well for the consumer. I don’t know how many times the general public needs to be reminded of that.
Calling Chuck Schumer! Where’s the camera so he can talk about regulating loyalty programs and them achieve nothing for consumers on that front too? I’m sure the airlines take greater care of him and the rest of the US Senators and Congresspersons than they take care of the general public.
The airlines’ behavior is begging for some kind of additional regulation of these programs. The Airline Deregulation Act ought to be amended to allow for more easy litigation against the airlines on the matter of “loyalty” program operations.
@Sam – wasn’t making a point, just offering information in response to your question.
@Dan for avoidance of doubt I have zero financial interest
@ABC I think I’m being MUCH harder on American than reporting from “real journalists” on this.