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.
TPG featured card
at Capital One's secure site
Terms & restrictions apply. See rates & fees.
| 5X miles | Earn 5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel |
| 2X miles | Earn unlimited 2X miles on every purchase, every day |
Pros
- Stellar welcome offer of 75,000 miles after spending $4,000 on purchases in the first three months from account opening. Plus, a $250 Capital One Travel credit to use in your first cardholder year upon account opening.
- You'll earn 2 miles per dollar on every purchase, which means you won't have to worry about memorizing bonus categories
- Rewards are versatile and can be redeemed for a statement credit or transferred to Capital One’s transfer partners
Cons
- Highest bonus-earning categories only on travel booked via Capital One Travel
- LIMITED-TIME OFFER: Enjoy $250 to use on Capital One Travel in your first cardholder year, plus earn 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months from account opening - that’s equal to $1,000 in travel
- Earn unlimited 2X miles on every purchase, every day
- Earn 5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel
- Miles won't expire for the life of the account and there's no limit to how many you can earn
- Receive up to a $120 credit for Global Entry or TSA PreCheck®
- Use your miles to get reimbursed for any travel purchase—or redeem by booking a trip through Capital One Travel
- Enjoy a $50 experience credit and other premium benefits with every hotel and vacation rental booked from the Lifestyle Collection
- Transfer your miles to your choice of 15+ travel loyalty programs
- Top rated mobile app