I’ve blogged here and there about revenue-based mileage programs. Unlike many in this space, I’m not wholly opposed to them and think they may be a better way to recognize and reward loyalty. If I were a betting man I would bet that AAdvantage follows Delta and United to some degree after they merge the US Airways Dividend Miles program into AAdvantage. We have a little time between now and then, and we may get to see if there are benefits in going last.
If I were running AAdvantage I would watch my numbers carefully, and have no doubt that they are. I’d be looking for any semblance of a shift in business from Delta and United. More important than the raw number of elites that move though is what those elites are doing once they arrive. The fares they purchase will matter, but I’m sure AA has enough accountants to figure out whether or not they are attracting the kinds of customers they need or not. Notably, I think it’s fair to say that AAdvantage has long had a revenue component – the elite qualifying point. I think EQPs are a great way to recognize and reward higher spenders in the way that AAdvantage currently rewards. In fact, I’ve speculated that EQPs could become the basis of American’s program in the future. That didn’t work so well when others have tried it in the past, but with Delta and United now moving forward with Delta’s program ( 🙂 sorry, couldn’t help myself), there may be room for a slightly different way of doing things.
In the end, there are advantages (pun not intended) of being late to the game. American AAdvantage can watch what happens in 2015, and adjust accordingly. Delta appears to think their new program is successful before it’s even launched given that they’ve already upped spend requirements for 2016. United? Only time will tell. No matter what happens the next 2 years are going to be historical from an airline loyalty perspective.
-MJ, October 10, 2014