I wasn’t surprised by the news that American is devaluing its award chart yesterday morning. Everyone else has, and an adjustment in the miles required for travel seems in keeping with the rising cost of tickets. I was surprised by two things. First, the timing caught me off guard. I expected a few tweaks here and there but not any wholesale changes until Dividend Miles and AAdvantage are combined into one. Second, the lack of real notice about the changes was disconcerting and a bit out of character for the granddaddy of mileage programs.
Overall, what has happened is not that out of line with the other carriers. That said, while some of hysterics released on the boards was met with an eyeroll from me, I think the way these changes were introduced was not managed well, and likely caused most of the negative reaction. The big bloggers, Gary, Lucky, TPG and perhaps others were able to chat with Suzanne Rubin, President of AAdvantage, yesterday. Based on my read of their work, it seems that AAdvantage heard the disappointment in the way this news was delivered. Given that they have been the least bad of the bunch overall, I say it’s worth giving them the benefit of the doubt.
Even so, that doesn’t mean you shouldn’t be prepared for further bad news. I have maintained for quite a while that the way these programs function is not sustainable and they are going to become more closely aligned with the real bottom line contribution of the customer. That change is inevitable based on a number of factors not the least of which is that airlines are being managed like profit-making enterprises and not just pass-through corporations for banks or aircraft/engine manufacturers. Yes, an oil shock, terrorist attack, or other calamity could dampen the enthusiasm surrounding airline financials in the short term. However, I wouldn’t bet the farm that any of those things result in anything other than drastically reduced capacity to match the new demand.
MJ, April 9, 2014