American Makes a Few Fairly Insignificant Changes But Delivers the News Poorly

Well, I messed this one up. Scheduled it to go live on Thursday as my regular post, or so I thought, but here it is today. Consider this an early sneak peek if you’re reading this on Wednesday…
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Any time two airlines merge, we see changes take place to try and harmonize the differences between the two. The American and US Airways merger is no different. While we’ve already seen a few minor changes, this week we saw a bigger announcement about things that would change on both sides. On the whole, the changes were actually not that big of a deal for most travelers. Yet the way American delivered the news created quite the backlash.

American Award Changes

When I first read the press release, I really didn’t think twice about it. It was clearly written and gave both the good and the bad news. Here’s what we learned.

  • US Airways Dividend Miles redemption blackout dates are removed, matching American.
  • American AAdvantage goes to a three + level award redemption system up from two, somewhat similar to what US Airways has. Some of the higher level award amounts change, but low level awards (the ones most people care about) stay the same.
  • American will now allow 2 free checked bags instead of 1 down to South America, matching US Airways.
  • American reduces Gold elite baggage allowance from 2 to 1 free, matching US Airways Silver. (American starts at Gold, there is no Silver.)
  • US Airways reduces Gold and Platinum elite baggage allowance from 3 to 2 free, matching American Platinum.
  • American travelers on full fare and AAnytime award tickets will no longer get free checked bags, matching US Airways.
  • US Airways Mastercard (minimum annual fee $79) cardholders will get 1 free checked bag, matching American Citi cardholders.
  • US Airways travelers in domestic First Class will get better meals on flights over 1,000 miles, matching American.
  • US Airways travelers in Business Class will get Bose noise canceling headsets, matching American.
  • US Airways travelers in Business Class will see double the movie options on the A330 built-in system and they will get Samsung Galaxy tablets on other aircraft, matching American.

Reading through that, I couldn’t help but not really care. Some of the product announcements at the end had already been discussed and were put into place previously. And those AAnytime award weren’t really that big of a deal. It’s a nice option to have, but it doesn’t impact the low level awards that most people want to use. The announcement was mostly positive, but some was definitely negative. Either way, it really didn’t seem like a huge change. It just seemed like they were making smart adjustments, taking the best policies from both sides.

But then I saw the outcry from the frequent flier community. You would have thought that American had grabbed a fistful of miles and punched them all in the face. Lucky at One Mile at a Time said that American “literally just destroyed their standard AAnytime award chart without any advance notice.” As you can imagine, commenters on the points and miles blogs as well as on Flyertalk and Milepoint were even less generous.

What was I missing? Granted, I realize I’m not a points and miles guy, but I was having a hard time seeing how this announcement was causing such a reaction. Then I decided to look into what was going on, and it became clear very quickly.

American did not deliver the news well at all. Here are just a few things American did wrong.

  1. American published the new award chart before it announced what was happening. That gave people plenty of time to speculate and get angry. The announcement should have gone out first.
  2. American gave zero advance notice for the mileage redemption changes. Sure, the changes doesn’t apply for travel until June 1, but that’s not enough. What an airline should do is give you a little advance notice; say that bookings beginning May 1 for travel after June 1 will be at this new level, or something like that. That gives people who have been saving up for an award time to cash in before the change happens. It’s not going to have a huge impact on the airline, but it does a lot for goodwill.
  3. American didn’t tell the whole story in the release. It didn’t mention the fact that it would eliminate the admittedly little-used oneworld Explorer awards. It’s also eliminating stopovers on award travel (previously only allowed at the North American gateway city, so not that lucrative). Oh, and there were changes to the US Airways award chart, including a 20,000 mile increase to business class awards to North Asia, that weren’t mentioned either. Again, none of these are all that huge or unexpected, but they are all negative. Don’t hide the details.
  4. American’s email to AAdvantage members sucked. It completely glossed over any of the negative impacts and instead solely focused on the good news. Anytime you send an email out like that, the savvy traveler (or even not-so-savvy) will know that you’re hiding something. And the tone just sets people off, including me.
  5. Did I mention they made the change without giving advance notice? Yeah. People hate that.

So I can certainly see why people were all up in arms, but it would have been an easy thing to avoid. The reality is that this news isn’t a big deal, and a fair bit of it is actually good. If American had simply laid out every single change somewhere (even if on a page on the website) and then given a little advance notice, nobody would care. Hopefully they learn a lesson from this going forward, because in reality, the changes aren’t the problem. It’s just the way they were presented.

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54 Comments on "American Makes a Few Fairly Insignificant Changes But Delivers the News Poorly"

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Shane
Member

CF: by now you must have standard language for your posts because it seems like each of the big 3 makes a similar type of announcement quarterly, whether it be about product changes, frequent flyer changes, hub and route changes, etc. Every time they lay out all of the great benefits that reductions in service will be and how great the changes will be for consumers. Granted, usually there is more time for consumers to absorb these changes, but the communication is still the same.

Jon
Member
If you didn’t expect a devaluation, then you’re utterly delusional. Every other US airline has had a devaluation, and quite frankly, the AAdvantage devaluation from 4/7 is easily the least painful amongst the big-3. Considering none of the Saaver awards were changed (which are the values used for partner redemptions), this devaluation is actually easier to stomach than even the Southwest devaluation, if only because WN raised redemption rates across the board. Assuming you were expecting a devaluation to drop *some* point soon (which I most certainly was), the only real (and quite concerning) issue is the completely terrible, mind-numbingly… Read more »
Consumer Mike
Guest
Jon, As a long time follower of the Cranky Blog, an Aadvantage member since 1981 and someone who has traveled on airlines (domestrically and internationally) for 50 years I always monitor the changes in the industry and compare changes and benefits of every FF program. Therefore, I also was expecting some changes on the Aadvantage program, especially after US Air CEO Parker got his hands on AA. We also all know that CF has never been a points and miles guy. He has said so more than once over the years, so I am not surprised that he may not… Read more »
Glenn
Guest

“It’s also eliminating stopovers on award travel (previously only allowed at the North American gateway city, so not that lucrative).”

I have to disagree with you about the NA gateway city stopovers not being that lucrative. Coming back on an F or J award from Asia to let’s say LAX–the stopover was an easy way to get a free flight segment in F to HNL or another Hawaiian city, which can be pretty lucrative, depending on the time of year.

Chase
Guest
Yup, if you lived in a North American gateway city (or used to like I did), this was a lucrative benefit to get a ‘free’ one way out of AA before or after your trip overseas. What it means for me is not being able to visit friends in that city or plan to use that city as a stopover altogether because of the changes. Granted, it’s not a big deal, none of this is because we knew it was coming due to the merger. But how it was presented with no notice was deplorable and leads to alot of… Read more »
Jon
Member

What’s funny is that people in AA Gateway cities (DFW, NYC, MIA, and LAX) are crying foul, while the rest of us who don’t live in gateway cities are brushing the change right off. You should be happy you were able to take advantage of those free flights for as long as you did. Most of us didn’t really have that luxury without going way out of our way (which, means it’s no longer a luxury anyways).

Jason
Guest
I dont understand why you dont think these are a big deal: A) AA makes it look like AAnytime awards are going only from 50,000 domestically to 60,000 when they are actually hiding the Level 3 award prices? If they had announced the prices, the headline would have read “award prices more than double for some days” B) The Level 3 award prices so insanely high, they make delta look cheap. For example, 100,000 miles for aanytime on 20 or so days a year. Want to go home for thanksgiving? Last year was 50,000 miles…this year is double! That 200,000… Read more »
Alan
Guest
As a recent AA convert, based in Chicago, I’ve come to love AA vs UA or DL from my previous base, IND. I’ve not yet booked any AA awards but, in the two years I’ve lived in Chicago, have accumulated over 600k miles – mostly based on flying but a credit card bonus as well. The biggest frustration for me is that non-stop options from ORD, a major hub, are now basically non-existent on the new chart. Friends are getting married in Mexico next February, for example, and I’ve been waiting on them to pin down dates before I book… Read more »
CM
Guest
I think the outrage is more about the tone that this sets for changes going forward rather than these specific changes. With the prior two big mergers, we had airline CEO’s touting “changes you’re going to like” and “best in class” programs. What we got were substantial devaluations in frequent flier programs, especially for those who focus on international premium cabin awards and overall reductions in frequent flier benefits. In many cases, airlines announced these changes as enhancements. I think that many in the miles and points community hoped that this merger was going to be different. Perhaps the new… Read more »
Chest Rockwell
Guest

“American AAdvantage goes to a three + level award redemption system up from two, ”

Inflation on the high end can be 80%+ including a level so high that they didn’t have the balls to actually publish the new levels in the chart. This is a really big deal for anyone that uses miles for peak travel.

David SF eastbay
Member

4.American’s email to AAdvantage members sucked.

What email? Now that sucks!

John G
Guest
What AA really did was up the miles needed for real awards, and they hid it in a bunch of BS. Before, there were two tiers for domestic travel, 25,000 RT and 50,000 RT. The pickings for the lower level were sometimes slim, especially closer to the date of departure, but if seats were available, it was 50,000, period. Now, that will be anywhere from 60,000 to 100,000 miles. Looking at Christmas this year, I picked DFW-LGA just for grins. Departing on Saturday the 20th or Sunday the 21st, the ONLY coach award is 100,000 miles round trip. That’s right.… Read more »
malbarda
Member

It is certainly all much better than Delta’s Skymiles. Smart to not devalue like Delta have done, but given DL’s profitability and AA’s struggles to get there I expect a change for the worse for AA consumers, but for the better for AA’s shareholders at some point!

A
Guest

You nailed it Maarten. Of the big 3 legacy carriers DL is clearly doing the best job right now and they have devalued their FF program the most. I’ve long thought that FF programs are hold overs from a different era and no longer have the correlation to profits they once did.

Gary
Guest

all these changes, on AA/US or others remind me of casinos. Everyone thinks they can win….but in the end, no… House wins. None of the frequent flier program changes are customer friendly UNLESS the airline wins first. then the customer advantage (small “a”…pardon the pun) is a bi-product. Yes, as hard as we may want to think otherwise, cynicism prevails.

lrosenberg
Member
Tuesday night I flew, for the first time, US Air. I flew from Greensboro to Philadelphia. Pilot gets on PA after we prepare to land in Philly and says there is a back up into Philly and he cant circle because he does not have enough fuel. We land at BWI and I hear Capt. tell gate attendant we are gas and go which we did but I find it ridiculous to run out of gas. On return to ORD I change my flight home and US Air agent tells me my seat is in rear, I am a Platinum… Read more »
Consumer Mike
Guest
Lee, this has ALWAYS been the US Air attitude regarding travelers. So now that they own AA you had better get use to it. I have already decided to use my car as much as possible instead of flyinging. Naturally, it has to make sense and I do not mean coast to coast. BUT, I am cutting back on flying as am tired of the escalating fees, air fares and bad service as well as long security lines. I have had it! The mega mergers have killed competition and travelers are being gouged and treated more in the style of… Read more »
E
Member
For what it’s worth, the changes so far aren’t as bad as some are making them out to be, but the lack of advance notice is inexcusable. I happened to be shopping for an award on Tuesday, and started getting odd results on the website. Really odd results.. which I now know were due in part to AA loading the changes for the award levels. In the middle of the day. They were loading stuff in the middle of the day. Seriously?…. It was so odd I even called the web help desk, and they told me that they were… Read more »
Steven H
Guest

Where’s the story on how Spirit is about to announce it’s moving it’s FLL hub to MIA? Look forward to your insight on that.

lrosenberg
Member

Wait, AA owns US air, not the other way around. I like AA, it’s US air I can do without

Consumer Mike
Guest
Sorry Lee, that is not the case. I wish it was. U.S. Air took over AA during the AA bankruptcy process, but kept the name. The vultures at U.S. Air will be changing the AA company more like the image of U.S. Air as time rolls on. CEO Parker & Co. will squeeze until it really hurts. The people who see no problem with losing competition in the airline industry are the ones to blame for allowing these Mega mergers to happen. It is bad enough that we have lost airlines due to the economic crisis or super high fuel… Read more »
jaybru
Member
Probably a couple, maybe more, class action lawyers looking at the situation and trying to see what they might be able to stir up. Typically, these things have nothing to do with nature of the changes, just whether or not the changes were given proper and/or timely notice to the account holders. Wasn’t that the big issue with UA when it make a lot of changes and the courts, or whoever, said the notice wasn’t proper or timely? I seen to recall getting lots of UA scrip, entitling me to something. A few expired. I’m sure UA made a killing… Read more »
Consumer Mike
Guest

Too late for lawyers and frivolous actions. Perhaps an earlier posted opinion is correct, the time for FF programs has passed. If that is correct, it is time for consumers to move on to other contemporary Rewards programs that do not consistently devalue your points (miles). Individuals should consider if it may be time to exit airline FF programs.

jaybru
Member

Agree!

MeanMeosh
Guest
Fair or not, there was/is a sizeable amount of distrust of Doug Parker and the rest of the US management team among AA regulars. A devaluation only a few months after a merger where fliers were promised oodles of benefits, and with poor communication to boot, just reinforces the negative perception that’s already out there. That’s something USAA management should really think about before deciding to just quietly bury the negative side of the next round of “enhancements”. I do have to disagree with you on one point – the AAnytime devaluation is a pretty serious deal. The “Level 3”… Read more »
realist
Guest
Every reference to “American” in this post should be changed to US Airways, as it was US Airways’ managers who bungled this announcement. “Old” AA managers I know were embarrassed by the amateurism and ticked off that they had to clean up the the mess after putting up with the condescension and arrogance from US Airways managers for the past several months. It’s just one more example of how Parker/Kirby and company are perhaps in over their heads trying to run the World’s biggest airline. But don’t expect Brett to comment on that since we all know what he thinks… Read more »
Consumer Mike
Guest

Agreed.

MeanMeosh
Guest

Only one problem – Suzanne Rubin is one of the few holdovers from old AA. I don’t exactly care for Parker/Kirby, either, but can’t pin this one on them.

realist
Guest

Don’t kid yourself, the US Airways management is very top down and all the decisions are being made at the SVP level. Just because Rubin had to take the bullets after the debacle doesn’t mean she was the one to blame.

Doug Swalen
Guest

People can and have deservedly trashed United on how it has bungled the merger and really turned off customers. But give them credit…they gave huge notice on the awards devaluation they put in place last Feb. Apparently American isn’t following the United playbook…it’s following the Delta playbook…

JB
Guest

CF, sometimes I think we are in a different reality. I was puzzled when you blessed the AAUS merger as a good thing. Now I am mystified by your characterization of the end of Explorer awards and stopovers as ‘not a big deal.’ I can tell if you are more fatalistic than I am or operate on some kind of mystical travel plane were devaluations are karmic tests of our loyalty.

Nick Barnard
Member

Remember CF’s and my take on loyalty programs is get miles, because hey they’re free! But don’t be wed to any program. I’m not that frequent of a flier but I’ve got an US, AS, and DL account, all with some miles in em. Every so often I get a free ticket, I consider it nice gravy, but it doesn’t drive my loyalty.

I’m more about avoidance, no say I’m flying UA again if I can avoid it. Though I’ll go with my hometown airline, AS, if its reasonably priced.

JB
Guest

Reasonable response. I don’t remember a time before I maximized award tickets and parsed the routing rules of ff programs. If I step back and fairly appraise U.S. airlines as transportation services, then I think Delta is the best and Spirit airlines make sense. Loyalty is anachronistic. Everyone knows price is by far the deciding metric for air travel purchasing and pitch and width are an abstraction. Am I now the Cranky one?
“cranky”
ill-tempered; irritable.
Ex: “he was bored and cranky after eight hours of flying”

MartyNearDFW
Guest
Hi, Brett, There was great opportunity here to combine the two airlines and merge the best features of both. I think former AA CEO Robert Crandall even said so. Instead, my perception so far has been one of the new boss coming in and eroding the benefits of the AAdvantage program, which I thought prior to the merger was the best domestic frequent flyer program. AAdvantage Gold or Platinum since the early 90’s. Since US Airways took control of American, here are some of the recent changes which have negatively impacted me as an AAdvantage Elite: 1.) Buried in the… Read more »
Consumer Mike
Guest
Marty, I think you are right on target. I agree with you that the worst is yet to come. Doug Parker & Co. have just started to gut the Aadvantage program. Yes, until the “Merger” I believe the Aadvantage program was the best airline loyalty program offered. However, I believe that may be fading fast. Like the last passengers on the Titanic, there may be no more life boats to save the remaining members of Aadvantage. Therefore, as I have suggested earlier, it may be time for us to search and jump to other – MORE VIABLE – reward programs,… Read more »
Consumer Mike
Guest

Cranky, we do alot of international travel, so YES, the 2 bag Gold policy was important to us and probably many other over water travelers. Citi says if you have their cc you are still allowed i free bag on domestic flights. At least that is what they claim.

Nealo
Guest
I have the upmost respect for Cranky (except for his adoration of the US team), but on this one I have to cry foul and put him in the same category as Gary Leff in being in the wrong about US AAir then and now; still defending Parker & Co, having blessed the AA/US merger and now saying the end of Explorer awards and stopovers are ‘not a big deal.’ Travel is about emotions, lifetime memories… wish fulfillment. Loyalty programs play a big part of that. Sometimes its best to take the analyst hat off and look at things through… Read more »
John G
Guest
Here is the reality of consolidation. There is less competition, and you have far fewer choices. The three big boys and Southwest have much more leverage over the public. FF benefits and awards are intended to generate traffic. In the past, loyalty mattered, because there were lots of choices. Today, there are far less choices so the airlines don’t need your loyalty as much as they used to. They are more interested in using these benefits to drive the bigger spenders. That is the loyalty they care about. It is just the way it’s going to be. It used to… Read more »
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[…] Despite that, the airlines made sure to do a huge amount of outreach here. Why? Because they were bitten pretty hard by how they handled the last announcement, and they want to make sure everyone knows that they’ve taken the feedback to […]

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