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

May 22, 2017
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2 min read
New generation of jets comes with ups, downs
AA CEO Explains Why Move to a Revenue-Based Program Was Overdue
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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.”

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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 by MCT via Getty Images

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  • Packed with credits foodies will enjoy
  • Solid welcome bonus

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  • Some may have trouble using Uber and other dining credits
  • You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
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  • Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
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  • $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
  • $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
  • Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
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  • Annual Fee is $325.
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