Head of AAdvantage shares how you can make your loyalty more rewarding and easier to earn

Jan 8, 2020

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This week’s “Talking Points” brings you a conversation with the woman running American Airlines’ AAdvantage program, Bridget Blaise-Shamai. Blaise-Shamai has been with the airline for nearly 25 years, and as the president of the AAdvantage program and VP of customer loyalty and insights, she has seen a fair share of industry changes during her tenure, and explains how you — as a consumer — can get the most out of a brand.

Today’s episode touches on topics that every frequent flyer is concerned with, like dynamic award chart pricing, getting upgraded, and reaching elite status. Find out more about American’s partnership with Hyatt and how elites get reciprocal benefits, the logic behind married-segment award space, and which AA cabin passengers are redeeming for the most.

“Redemption is the broadest value proposition that we offer and I just represent to you, we take that very seriously…On average, the price per ticket in models is less than our published prices. So we’re viewing this as a success for our customers and their use of it,” says Blaise-Shamai.

Blaise-Shamai also details the difference between American’s Barclays and Citi cards portfolio and why choosing between the two issuers really depends on how you want to enhance your travel experience. For example, you might see an ad for the Barclays Aviator card on your next AA flight because the card offers 25% inflight savings and a companion certificate. Plus, if you’ve been wondering why you can’t transfer your ThankYou points to American, we’ve got the answer in this episode.

Related: The top 7 perks of American Airlines Concierge Key

Featured Photo by Wyatt Smith / TPG

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Transcript:
Brian Kelly: Welcome to this episode of Talking Points. I’m your host, Brian Kelly, The Points Guy, and today I am in sunny Fort Worth, Texas, at the absolutely beautiful new headquarters of American Airlines and I am so excited to announce that I have Bridget Blaise-Shamai as my guest today. Bridget just so happens to head the world’s largest loyalty program, AAdvantage, So I’m excited to just talk to her today about all things AAdvantage and you know, working at American Airlines. Bridget, thank you so much for joining us.

Bridget Blaise-Shamai: Gosh, Brian, thanks for having me and welcome heartily to Skyview here in Fort Worth, Texas. We’re delighted to have you here at our new headquarters.

Brian Kelly: Let’s just talk about this headquarters. I mean it is truly when you walk in, there is a huge engine in the ceiling. Well, engine-sort-of design. This is like an aviation geek’s dream headquarters and actually it’s just so light and airy — even if you’re not a plane geek, you must love working here, right?

Bridget Blaise-Shamai: Well said, Brian. I think it really can and it does draw in those who are aviation enthusiasts with a whole host of sculptures or wall treatments or ceiling treatments in the space of the engine that you’re referencing. And then those who may be excited about the industry but don’t necessarily have to have a 757 engine in the walkway or the oversized seatbelt do find it also super inviting and it’s open space and the white walls and the use of glass that allows the sun to come in, just all very motivating to be around even more so.

Brian Kelly: Yeah. So let’s talk about the American culture over the years has changed. So, what is it, six years ago you merged with US Airways, you were Legacy American Airlines, correct?

Bridget Blaise-Shamai: That’s right, Brian.

Brian Kelly: How do you describe … what is the culture of the 2020 American Airlines?

Bridget Blaise-Shamai: So what I would offer as the AAL, where you know AMR [Corp.] and US [Airways] came together and formed this wonderful company, we are really striving to create an environment where we’ve got all 130,000 employees feeling like we’re moving in one direction and that direction is upward.

Brian Kelly: In 2019 the AAdvantage program, it’s so much more than just rewarding people for X flights that they take. How do you describe, you have over 600 employees, you’re running a massive business within the airline. I sometimes joke and say they’re not frequent-flyer programs anymore, they’re frequent-spender programs or frequent-buyer programs. How do you think the AAdvantage program is today versus when it first started?

Bridget Blaise-Shamai: You know, I love the question because so much about this industry has evolved dramatically over the last couple of decades. And now I think the evolution is set to even accelerate and really at the heart of it, I think, is this wonderful, wonderful program — in this case, the AAdvantage program, which has really proven, not necessarily identified back then, but certainly now as this means to engage loyal customers and how you can keep this relationship going through the program. And you do that in part through flying and how that is in terms of their personal and professional needs and then how you may engage further, yes, in a more commercial capacity that requires spend. It might be on a credit card or a hotel stay or car rental, but a way to do that to keep engagement of customers, because to me it’s not just about being a customer, it’s about being an engaged and loyal customer to your brand.

Brian Kelly: When we think about AAdvantage over the last several years, there have been the other major airlines rewarding flyers based on how much they spend, adding in elite qualifying tiers. I know a lot of people in the frequent-flyer community were very upset about that. This is the end of the programs, but it hasn’t quite been that has it? From your perspective, how have these new changes that reward, frankly, higher spenders and the changes and upgrades and things like that, how has the program changed in the last three years or four years would you say?

Bridget Blaise-Shamai: So that’s right, Brian. So we all had programs that had been set a bit ago and during that period of time from when they were initially designed to really the airline models, we were all running, lots had changed and yet the programs were still pretty static in their design. So, a few years ago you saw all this introduction of some sort of minimum on the revenue side and folks thought, “Oh gosh, I’m not being rewarded for my time.” What we found is not only did our customers stay with us, the size of our early population grew quite handsomely and so, I can only describe it on what we’re seeing through the data, through the actual behaviors of our customers. And so, I would conclude it’s all worked out for all the parties. On the upgrade side, a lot of that really was the result of feedback we had received from customers. We had had, really a time-stamped approach to this, right? And so, those who may have been able to book travel further out for whatever reason were actually rewarded in the queue for the upgrade, we actually have a lot of our high-value customers who book pretty close to departure.

Brian Kelly: I mean, I know, I never book in advance because I know my travel will always change.

Bridget Blaise-Shamai: That’s right. So you have a fare booking even within their upgrade window. And really they were kind of cut out from the opportunity. So we really felt the need and obligation to action that feedback from these customers and then we moved to something that’s much more reflective of relative value of our customers over a rolling 12-month period of time.

Brian Kelly: I think one of the other big things that has happened is the multi-billion dollar investment of most of the major airlines in the product, right? So lie-flat seats, there was real value there put into the product and then, frankly, people have started paying more for those seats, which I think 10 years ago when I first started The Points Guy, upgrades, I don’t know what the percentages were per airline, but especially domestically, a ton of people, most of those flights are a lot of those people in those planes where getting elite upgrades. Do you feel squeezed running the loyalty program now that there are more people paying for those seats to deliver on that promise to the members?

Bridget Blaise-Shamai: I think we’re in a good spot actually. We’ve got first and foremost these are seats that are for purchase, right? And really the proposition has always been that if they should not prove to be sold, that they’re provided to those customers who have earned the benefit of the upgrade through consolidating their travel with American Airlines. And so, while in certain cases, really there’s more demand than there is supply of remaining seats without any argument. We feel like we’re getting an ever better balance on being able to the direct purchase by customers because, candidly, I get a lot of feedback when we’re sold out on the premium cabin and the customer’s like, “I just want to buy it.” And there’s nothing available, alongside those who would’ve loved to upgrade and it just wasn’t their turn this time. But when I look at results of upgrades, Brian, it remains quite lofty on success rates across all of our tiers.

Brian Kelly: You know, I’m an Executive Platinum and one thing I do hear talking to Exec Plats is the system-wide upgrades and being able to use them. And we just saw United, we just had Luc Bondar on this podcast the day they announced PlusPoints, which if you want to use double the amount of points now you can confirm in advance, I would think for Exec Plats confirming in advance is a top priority and people have seen that availability in advance kind of dry up. Is that something that’s going to change or what are your insights on the Exec Plat system-wides?

Bridget Blaise-Shamai: So I offer you this, that upgrades have really been a benefit that really have out punched their weight. They really are attractive and motivating to our customers and so, for our system-wides, they are quite different and industry-leading really in their design in that they may be available as soon as you book them and all fare-class types are eligible for the upgrade. And alongside that if you wish or choose to, you may bestow that upon anyone and so, we liked the fact that they are transferable. So for us, because of the importance of upgrades and how customers really do enjoy them, even expect them, we’re always underway with, how should we be thinking about this again, as the airline model itself continues to evolve because we want to make sure we create a space for customers to get excited and motivated about, and we want to make sure we don’t mismanage any sort of expectations alongside that.

Brian Kelly: All right. We’re gonna take a quick break now. I see you right after we hear from our sponsors.

Brian Kelly: Welcome back to Talking Points. Let’s jump back into it. Let’s talk about redeemable miles. So we’ve seen Delta and now United as of November of this year [2019] go to dynamic pricing and neither of them now have official award charts that are published. In this industry we often see people follow the others, do you plan to keep an award chart in AAdvantage?

Bridget Blaise-Shamai: So we have an award chart as we sit here today and we have no plans of removing an award chart. What I would offer to you as we just concluded talking a bit about elites and upgrades, this is the one element of the program that transcends your status in the program, right? Redemption is the broadest value proposition that we offer and I just represent to you, we take that very seriously. So we have been offering for a bit now an opportunity when the price in miles is less than the published price, so the Mile SAAaver or the AAnytime, whenever that calculated price is less than either of those two published price points, it renders on aa.com for purchase. And we are now system-wide in our main cabin with this type of pricing and I’m delighted to share with you great uptake by our customers. On average, the price per ticket in miles is less than our published prices. So we’re viewing this as a success for our customers and their use of it, it would reflect that too.

Brian Kelly: Now American miles, I know you protect them, United, you can transfer in from Chase, Delta, you can transfer from Amex. People always ask me, Citi’s in bed with AA, why doesn’t AA transfer from the Citi ThankYou program? Is that on the table?

Bridget Blaise-Shamai: You know, it’s not part of our plan. As we sit here today, we’re very satisfied and pleased by having a direct relationship with our customers on their using their AAdvantage Miles to buy travel on American Airlines. And there you have it. There’s really not much more to it. But yeah, we recognize that we are a bit different in the industry.

Brian Kelly: Yup, makes sense. And switching to credit cards for a little bit, so historically US Airways was with Barclays, AA has been with Citi for many years and when the merger went through, everyone thought that Barclays would just go out the window, but instead you guys created these aviator products. So you were kind of dual-issued. Is that the long-term plan or how do you, as the head of the program, look at — the aviator cards are this; and our Citi cards are that. Is there a distinction?

Bridget Blaise-Shamai: So what we look at is what is going to be relevant to our customers, right? While the travel part of this is quite common, what they may be looking for to enhance their day of travel experiences or their spending experiences are as diverse as they are, but really the idea of having two different issuers really reflects on their strengths, right, in marketing. So you’ll see Citi in more of the digital and direct mail and the Admirals Club-type marketing channels, and with Barclays you’ll see them in flight and various areas of the airport and that really plays to the respective marketing strengths.

Bridget Blaise-Shamai: Then you think about the card proposition themselves. With Citi, the Citi AAdvantage card really has gone deeper on really spend categories that have proven to be relevant to our customers based on feedback and their spending behavior. And then with Barclays, it’s really more of a day of travel or travel related. So you’ll see things about companion certificates or Wi-Fi discounts or inflight food and beverage discounts. So together they are a wonderful combination and then just present it to the customer that they make the right decision for themselves.

Brian Kelly: I actually was thinking about this on the plane yesterday, because on most airlines these days you’ll hear the offers to get a credit card in flight. Obviously going to the pointsguy.com is where everyone gets their credit card. But how do you market the offers that change in flight or in the airport or in the lounge? I remember there was a time when there was 100,000-point exec offer in the lounge. Where is the best place or the best time in those channels to get an offer or does it just change all the time?

Bridget Blaise-Shamai: Yeah, I wouldn’t offer there’s any sort of seasonality or cyclicality to it. I mean, it’s just really where we are at a moment in time and we recognize we have to be competitive and we have to be broadly competitive, right? We’ve got to be running a great airline, we’ve got to be flying to a lot of places. We have to have a great inflight experience, preflight experience, post-fight experience. All that comes into play, to then have folks say, “You know what? I actually want to extend my experience with you by taking up one of your credit cards.” So all that’s in the mix alongside what might be the welcome offer of some of the AAdvantage Miles.

Brian Kelly: Let’s talk about the habits. So today versus maybe 10 years ago, are people still redeeming mostly for domestic coach flights or have you seen changes in consumer habits in what AAdvantage members are redeeming for these days?

Bridget Blaise-Shamai: What I see is a lot of stability. It’s a self-selection, right? You select into a travel program and despite having a host of other smaller redemption-level items, the redemption of miles for a main-cabin seat remain the most popular. Upgrades are also very popular and then you have, at a lesser degree: car, hotel and gift cards.

Brian Kelly: I see a lot of loyalty programs doing experiences and I’ve actually been to some of your cardholder experiences on the Citi card, the Madonna concert in LA was fun a couple of years ago, we were underneath the stage, it was kind of cool. But do you see that as a big trend for AAdvantage offering more and more non-flight redemptions?

Bridget Blaise-Shamai: You’ll see us focus on those types of experiences or activities that would compliment the travel. We still find that there is a lot of steadfast focus by our members, that they are in this for travel-related experiences and we’re going to deliver against that.

Brian Kelly: Actually, let’s just start with the Hyatt partnership, which was a big thing in 2019. For our listeners at home who don’t know it and I will probably mess it up, how do you describe your partnership with Hyatt and why are you doing it with the hotel?

Bridget Blaise-Shamai: So we deepened our bilateral relationship with Hyatt earlier this year whereby AAdvantage members can not only earn AAdvantage Miles flying on American Airlines, but when they stay at a Hyatt, they will earn AAdvantage Miles in eligible properties. And then for World of Hyatt members, while they stay at Hyatt, they earn World of Hyatt points. When they fly on American Airlines, they will earn World of Hyatt points. So really the cross exchange of currencies between the two companies. Then alongside that, select members of the elite programs can challenge for a comparable status within the respective organizations. And so far so good. We’ve been very pleased.

Brian Kelly: Do you foresee on the redemption side, being able to redeem 20,000 AAdvantage Miles for a night at a top Hyatt hotel?

Bridget Blaise-Shamai: So I would offer that we are in conversations about what more can we do together, just don’t have any comments for you here today.

Brian Kelly: Makes sense. Let’s think about partners. Oneworld is a great alliance for some areas, not the biggest alliance out there. We see a lot of other partnerships, Virgin has something special with Delta, AAdvantage you team up with Etihad for example, as a One[world] other partner. Are you actively searching to add more partners to the network or is that not a big priority right now?

Bridget Blaise-Shamai: That’s a great question and that is actually handled by my colleague Vasu Raja, who I know you’ve met.

Brian Kelly: I should have asked him when he was on this podcast.

Bridget Blaise-Shamai: Yeah, he’s your guy. But I will tell you it’s an awesome extension of the program having that network of brands that our customers can earn and redeem on within the AAdvantage program.

Brian Kelly: So American has the ConciergeKey program, which is the invite-only, there’s no published rules for it. But in general it’s a spend-based program, from what I understand, to reward your top customers. How do you describe the ConciergeKey program? And I know recently with Flagship lounges, some ConciergeKey members have been invited to do dining at certain times and there are sometimes transfers and Cadillacs on the tarmac. What can you tell us about ConciergeKey?

Bridget Blaise-Shamai: So, we stood up several years ago and I would offer, there’s a whole host of attributes that are considered or reasons that we consider when a customer is invited to be a part of ConciergeKey. And what we really are striving to do is deliver a very heightened experience for the customer all through the travel journey, right on the front side, day of travel, on the backside, et cetera. And we do that through high-touch and technology in combination. And so, we wish to make sure that the customer has an easy and as seamless as possible of an experience, and we have staff that is there to help accommodate for that.

Bridget Blaise-Shamai: So our premium guest services, for example, are the folks that are either meeting our ConciergeKey at the gate or taking our ConciergeKey by Cadillac when there is constraint on their time. And we’re really looking to make sure they make their connections because something big is always waiting on the other side of that and we are doing our part to make sure our customers realize that. So, we’ve got a lot of things that we do on day of travel that we make sure that the customer makes what they are striving to make. And again, I think we do an outstanding job and I interact with ConciergeKey customers as a daily routine and they are helping us everyday make the better program that we can be.

Brian Kelly: What’s coming down the pike in 2020 for AAdvantage, what should we be looking out for?

Bridget Blaise-Shamai: So I would offer to you what we are prioritizing is how do we make it as easy as possible for our customers to participate in the program both on earning and redeeming their miles and we’ve got a lot of things underway. We talked a bit about redemption on the earned side, we’ve just completed something with Mastercard that gives you a whole new shopping mall that is really targeted on more every day spend. You put your Citi or your Barclays card in one time, one-point click enrollment and thereafter the brands that participate, you can earn miles both online and offline. Super simple. So just one example of what I mean by ease on the earn side.

Brian Kelly: I was just going to say, I think there are so many ways people’s credit card or flying, yes, those are very popular ways … but I actually shop: aadvantageeshopping.com. People don’t realize you just put your AAdvantage number in, it puts a cookie on your computer. I like shopping at Neiman Marcus and Nordstrom and they’re often 10 miles per dollar spent and I’m getting two cents or more. I mean usually when I redeem my AA miles I’m getting huge value. So that’s like a 20% back on merchandise that is never discounted. Is the online shopping a big opportunity you think people should be signing up for?

Bridget Blaise-Shamai: Oh, absolutely. I mean the brands that we partner with through the eShopping mall and through the SimplyMiles are just outstanding and our consumers are shopping them already. So why not add the AAdvantage Mile to it as well? I mean it is one more step in the process for the eShopping, but again, once you sign up on SimplyMiles, you’re set to go. But we’ve got to meet our customers where they want to be met, we gotta make it easy, so that’s one of our tenets — personalized. We want to ensure that we are interacting with you in the most relevant way possible. And what we also find is that when we are demonstrating to the customers that we smartly are serving up offers to them or interacting with them in a way that matters to them, they get ever more loyal and trusting of what we are always going to be putting in front of them. And the last part you should see is that we’re continuing to make sure the value exchange is out there for our customers where they want it to be. So we’re going to deliver underlying value relevant to our customers for their participation in our program.

Brian Kelly: American is interesting and award availability may not be available on one route, but with married segments, right? So if you want to go Miami-Dallas, it’s not available, but Miami-Dallas-Phoenix would be available as a saver-level award. Can you just explain a little bit of the logic behind that married segment pricing for award availability?

Bridget Blaise-Shamai: Certainly. So what we find in this example, the customer wants to go to Phoenix from Miami, and there are instances where everything we can see would have demand on the nonstop just going out super full. But we want to make sure that the customer’s realizing value from participating in the program. And so, while the nonstop may not work, we do have means doing a one stop, in this example over Dallas, that affords the customer the opportunity to start where they want to start and end where they want to end and using their AAdvantage Miles. So we see a lot of great success with it. And yes, there’s instances where you can go nonstop and there’s instances where you’ll go one stop.

Brian Kelly: If someone in Miami just wanted to do Miami-Dallas, that one leg wouldn’t be available but if you add that Phoenix leg, it does become available.

Bridget Blaise-Shamai: So I was thinking about it more from an origin and destination perspective that Phoenix is the end game and you can’t go nonstop. So in the married segment, we’ll have to put you in touch with revenue management on that.

Brian Kelly: Got it. OK. Interesting. All right, so what is your favorite AA route to fly?

Bridget Blaise-Shamai: So I am crazy about Peru.

Brian Kelly: I have never been to Peru.

Bridget Blaise-Shamai: Oh my gosh.

Brian Kelly: What do you love about Peru?

Bridget Blaise-Shamai: I’m just in awe of one, just the energy and the buzz that Lima has become, and then just the grandness of what was the Inca period in history and not just Machu Picchu and the Sacred Valley, which are extraordinary but we’ve spent time at Arequipa and the Colca Canyon, which are just breathtaking.

Brian Kelly: It’s on my list. I was supposed to go to Peru in 2019, things got busy, but I just told my parents, I try to travel with them once a year, that we’re going to do Machu Picchu next year, so I will be hitting you up for tips. Final question. You’re flying, you can either choose window or aisle, which do you prefer?

Bridget Blaise-Shamai: I almost always take the aisle both in the premium cabin and the main cabin and that’s because I really want the opportunity to get up and engage with the flight attendants. I’m caring for the Barclay’s portfolio and a lot of our flight attendants participate in our inflight marketing programs and I really appreciate the opportunity to engage with them and ask them for their feedback on how they think it’s going. And I just find it an exceptional use of time that I think we all get something out of it.

Brian Kelly: Amazing. Bridget Blaise-Shamai, thank you so much for joining us today and giving some insight into the program and as a loyal Executive Plat member and I’ve been able to travel around the world in the front of the plane on my AAdvantage Miles. Thank you so much for running an amazing program. Thank you for joining us today.

Bridget Blaise-Shamai: Thanks, Brian, very much.

Brian Kelly: That’s it for this episode of Talking Points. I’m your host, Brian Kelly, The Points Guy, and a huge thanks to Bridget Blaise-Shamai, the head of the AAdvantage program at American Airlines and also huge thanks to the best podcast team in the biz, Margaret Kelly and Caroline Schagrin and to my amazing assistant, Christie Matsui. That’s it for this episode. Safe travels everyone.

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