AA CEO Explains Why Move to a Revenue-Based Program Was Overdue

May 22, 2017

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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.

Click here to read the full interview write-up — including discussions of Concierge Key and the retirement of the 757.

Featured image courtesy of Chicago Tribune via Getty Images.

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