Gary’s post, “American’s President Can’t Wait to Make Changes to the AAdvantage Program and to Copy Some Competitors,” set my mental wheels in motion. Let’s look at a key quote from the investor presentation.
“…doing things like making changes to the frequent flyer program (emphasis mine) just aren’t feasible….” until they get the systems integration done.
Later in the Q&A he reiterated the benefits of getting through systems integration as Gary quoted in his article.
“…we would have loved to make some modifications to the frequent flyer program…”
It might be informative to listen to the presentation yourself, and then think about it. I did not come away thinking that we were looking at an immediate cc of Delta’s program the minute they get through the big technical hurdle of the reservations system cutover.
I’ve said all along that AAdvantage is going to change. The real questions are when, and how? And that is open for a lot of discussion. I don’t think we will see drastic changes for the 2016 program year. I do think we’ll see changes announced in 2016 for the 2017 program year with the most likely change being a revenue requirement to hold elite status. Of course, there is always the chance that the award charts could be tweaked at most any time.
Standing in the way of AAdvantage becoming SkyMiles 2015? IT. Unless American had a revenue-based program in the pipeline before the merger, I don’t think they can do the IT work required to make the behind the scenes changes needed to move to a revenue-based model for the 2016 program year. I could be wrong about that, but I don’t think I am. That said, a minimum revenue requirement for elite status could likely be implemented more quickly than a total cutover to a revenue-based earning (and burning) model. Further, now that they have a multi-tier award chart, one could be forgiven for thinking that they’ve already moved towards a burn model that more closely aligns with revenue-based spending of miles.
On the other hand, AAdvantage could be so mind-numbingly profitable for American that management does not think it needs to be touched. But based on the comments of American’s President, I don’t think management believes that….yet.
-MJ, May 21, 2015