AA CEO Explains Why Move to a Revenue-Based Program Was Overdue
The Unaccompanied Flyer sat down with American Airlines CEO Doug Parker earlier this month for an interview. In the third part of the interview series, they discussed the past, present and future of the AAdvantage program. And, the interviewer didn't pull any punches, giving us a look into the CEO's thinking.
He started out asking: "Why did American decide to make the change to a revenue-based loyalty program?"
Answer: "I wish [former AA president] Robert Crandall would have just created the AAdvantage program as a revenue-based program from the beginning... It's not about matching the competition, but it's the correct way of doing things. We should be rewarding the flyers that spend the most money and put the most into this airline."
The interviewer pushed back, asking Parker if someone who flies with the airline more should get rewarded more than a periodic first class business traveler.
Mr. Parker's reply: "I'm going to be honest, and yeah, that guy who spends more money with us and flies in our premium cabins should be rewarded more. That college kid is spending $2,500 on coach tickets when that business person going to Europe is paying $15,000"
A final push from TUF got perhaps the most unscripted answer from the CEO: "Look, it's not fair to the people who buy full-fare tickets all year round when some guy finds a cheap fare from some US city in first class, flies to Beijing round-trip and earns Platinum status for the year. We want to reward the people who do the most business with us."
From this answer, it seems that the CEO of the world's largest airline is still bitter about those travelers who jumped on the American Airlines business class deal from Washington DC (IAD) to Beijing (PEK) back in March 2015. This deal has been behind the DOT changing its rules for error fares, AA changing its terms to eliminate mileage earning on "misfiled fares" and — eventually — a "slap on the wrist" from the DOT.
This brings up an obvious follow-up question — that unfortunately TUF didn't ask — Why call it a "Frequent Flyer program" and not a "Frequent Spender program"?
I guess we'll have to wait to interview Doug Parker ourselves to get that answer.
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| 2X miles | 2 miles per dollar on every purchase |
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The Capital One Venture X Business Card has all the Capital One Venture X Rewards Credit Card has to offer and more. It offers an incredible welcome bonus and requires an equally impressive spend to qualify. In addition, the card comes with premium travel perks like annual travel credit. (Partner offer)Pros
- The Capital One Venture X business card has a very lucrative welcome offer.
- In addition, the card comes with many premium travel perks such as an annual $300 credit for bookings through Capital One Business Travel.
- Business owners are also able to add employee cards for free.
Cons
- The card requires significant spending to earn the welcome offer.
- Another drawback is that the annual travel credit can only be used on bookings made through Capital One Business Travel.
- LIMITED-TIME OFFER: Earn up to 400K bonus miles: 200K miles when you spend $30K in the first 3 months, and an additional 200k miles when you spend $150k in the first 6 months
- Earn unlimited 2X miles on every purchase, everywhere—with no limits or category restrictions
- Earn 10X miles on hotels and rental cars and 5X miles on flights and vacation rentals booked through Capital One Business Travel
- With no preset spending limit, enjoy big purchasing power that adapts so you can spend more and earn more rewards
- Empower your teams to make business purchases while earning rewards on their transactions, with free employee and virtual cards. Plus, automatically sync your transaction data with your accounting software and pay your vendors with ease
- Redeem your miles on flights, hotels and more. Plus, transfer your miles to any of the 15+ travel loyalty programs
- Every year, you'll get 10,000 bonus miles after your account anniversary date. Plus, receive an annual $300 credit for bookings made through Capital One Business Travel
- Receive up to a $120 credit for Global Entry or TSA PreCheck®. Enjoy access to 1,300+ airport lounges worldwide, including Capital One Lounge locations and Priority Pass™ lounges, after enrollment
- Enjoy a $100 experience credit and other premium benefits with every hotel and vacation rental booked from the Premier Collection
- This is a pay-in-full card, so your balance is due in full every month