On the heels of its decision to pull forty percent of its fares from sale through traditional third party channels, American has now made the even bigger decision to stop selling tickets entirely, seeing opportunity to completely revolutionize how airline travel works.
The original shift in fares was meant to allow American to sell more through what it calls “Modern Retailing,” but its projections now don’t provide enough cost benefit to the airline, which has been struggling to boost margins. In order to reduce those costs further, American began experimenting with a broader cost reduction program.
Instead of selling tickets in advance for those select flights, American will require everyone to just show up at the airport for the flight they want. Each passenger will have to pay a $50 non-refundable deposit to get to the gate. American will then run an auction at each gate where the highest bidders get onboard the airplane. The rest can either go home or pay another $50 to get in the gate area for another flight.
American’s Managing Director of Modern Retailing Neil Guerin explained the benefits of this strategy as he was packing up his office since his role was no longer needed at an airline that doesn’t sell tickets.
With our previous plan, we were using a more modern system to sell tickets, but we still had significant distribution costs plus commissions, technology issues, and more. Now with this new system, we can eliminate all of those. All we need now are some portable cash registers that we found in the basement of the old North Terminal in Newark, and we’re ready to go.
The cost benefits were obvious, but the question about revenue performance was a real concern. The airline’s revenue management team ran several tests in recent months that surprisingly proved this strategy to be a winner.
To give it the best chance of success from a revenue perspective, the airline determined there would be a minimum bid of $100 per person per hour of flight time for a standard traveler. Credit cardholders can bid as low at $80 per person as an exclusive benefit — really now, the only benefit — of having a card.
Scott Chandler, VP of Revenue Management until next week when his job is also eliminated explained, “you know, we thought that pouring all this money into technology to enable continuous pricing was going to really give us an advantage, but it turns out that a random auction actually boosted unit revenue by 9 percent. Go figure.”
The revenue boost was particularly evident in New York and Boston where travelers taking advantage of expanded service under the Northeast Alliance (NEA) with JetBlue had no option but to bid high enough to get on their connecting flights.
This shift in model also means that the AAdvantage program will not be able to function as it had previously. With the inability to sell tickets, AAdvantage has now suspended the redemption portion of its mileage program. Travelers will, however, continue to earn miles by spending on the credit card.
Heather Samp, American’s Managing Director of AAdvantage until her role was downgraded to junior analyst, said AAdvantage will look to the future with a model focused on gamification. “Loyal travelers can continue to earn miles as they always have. Instead of redeeming them, however, we will broadcast an enormous leaderboard on the side of Skyview 8 [American’s headquarters building] showing who has earned the most miles for all airplanes flying overhead to see. Who wouldn’t want to be up there?” she explained as she moved her belongings into a small corner cubicle, hoping nobody would be able to find her to tell her that she was fired.
Though there are clearly risks to this shift, the timing of the move coincides with what will be one of the best demand environments that the airline industry has ever seen. That has given the airline confidence that this is a lower risk decision than it ever has been.
Despite this confidence, it’s still a controversial move. Chief Commercial Officer Vasu Raja — the only employee left in the commercial organiztion — beamed, “Indeed, just look at how much people are paying to fly places right now. I mean, $500 to fly from Charlotte to St Louis this summer… ST LOUIS?! People will do whatever we say if they want to fly right now. It’s a great f*&^ing time to be alive.”
The plan goes in place today, April 1, which if you hadn’t noticed… is April Fools’ Day. And a very happy April Fools’ to all!
80 comments on “American to Stop Selling Advance Tickets for All Flights”
Love it…..The gurus at AA have obviously never sold a ticket in their lives. That’s what happens when you have “off the street” people dictating how things should be done when they’ve never done “those things”……..
I love when people comment on articles they haven’t read. :-)
I actually did not read the whole article but I figured because of what day it is it was in April fool’s joke! People really need to pay attention to what they’re reading and on what days they are reading them!
Do you really think it is an April Fools day.joke??
Lol no …NDE is the actual name of the new move by AA( albeit sort-of akin to the old practice of just showing up @ the airport and paying a certain amount sans the ridiculous auction). As a VIP corporate travel agent , this will cause many business travelers to opt for United, Delta , Southwest or JetBlue… Heck even Spirit !
I know it’s possible to type a comment on a video while it’s actively playing, but I didn’t realize anyone could type a comment while reading an article. I see that those that try, don’t finish the article.
?????
I love it too when sarcasm is so beautiful that some people (you) can’t even stop themselves.
Actually I find it depressing, & scary. Plus, I’m seeing this more and more often. Uninformed people talking about things they know absolutely nothing about.
You know, forget reading the article, let me tell people how it should be. ?
Scary.
Oh, & AA can go personally gratify themselves. I’m not someone who does well being around or, dealing with people, & especially the general public. I’m becoming more and more allergic to idiots and BS as I get older.
It’s always fun when someone doesn’t actually read the entire article so they don’t know what’s actually going on. You were totally left out of the loop there ha ha.! It’s an April fools joke, today is April fools day
Check your calendar! It’s April 1st!
April FOOL’S!
Ummmmmmmmm!
This is absolutely crazy. I dont want the stress of bidding for a plane seat to visit my grandbabies. American Airlines you are being totally heartless and greedy. Americas namesake Airline Company- shame on you.
You are a clueless dingbat. Read the flicking end. Hah
Please don’t give AA this terrible idea even as a April Fools joke.
I can see them trying to implement an auction system?
If aa does this I will no longer fly with them.
April Fools!
Hah did you read it? Duh
Good one! Thanks for the Fool, Crank Flier.
This model really revolutionizes everything. There will be no more stranded customers with misconnrction. You can’t bid for your connecting flight if you aren’t in the boarding area.
I can see the $50 bidding fee is waived for original AAirpass owners.
It was an April Fool-s joke…..haha
I sure hope so. It should be.
Yes, it was. And you missed the joke.
While AA has been known to do outlandish things similar to this one; it was too obvious from the beginning that they could not go this low. Still a very good one for April fooks.
OMG. Would love to hear the reactions of Scott, Heather and Vasu to this.
When I was in the military I flew standby and it was always hit and miss, usually more miss. I’m assuming the test they did was not conducted over the holiday season or at a large international airport. For this to work as described above, you would have to remove passenger screening or everyone who wants to bid will have to get through security which won’t let you through unless you have a boarding ticket. Unless you are rich, you can’t plan a trip or a vacation as you wouldn’t know if you were going to get on the flight. What if you’re a family of four and only two of your bids win? And who want to get caught up in a fight when some disgruntled bidder gets upset that they didn’t get a ticket. Here is a novel idea for AA, how about they reduce the amounts they pay to their top executives to that equivalent to the salaries of POTUS, VPOTUS, and Congress. Why should any executive make more than the leader of the free world?
What about college football coaches?
It’s a joke, but FYI, college football teams that need fly to a game charter flights with the
big 3 commercial airlines.
Hey dumbass read the bottom of the article and think about what day it is
Hey buddy
No need to be calling some a mean name. Are you perfect ?
I think not.
How long did it take to type that out because it’s time you’ll never get back. 01April 2023
Ha! Good one!
Sorry, but the real story is that all AA customers flying to or from the State of New York or to or from the State of New Jersey will be required to pay a 100% tax( on ticket prices, existing fees, existing taxes, etcetera) to help fund the perpetually corrupt, inept, and dysfunctional New York City MTA. Approximately 2% of that 100% tax will go to actions and activities that actually improve the safety of MTA systems for MTA users. The other 98% will be given to the numerous corrupt MTA union officials, the numerous corrupt New York City council members, the corrupt Governor of the State of New York, and so on. Even Tony Soprano will get some.
Wait, I thought Tony was dead??
April fool’s!?
You definitely nailed the Vasu f-bombs
That the nail in American airlines coffin
Read the article all the way to the bottom to the very last word! Do you really need to realize what day it was the uretic what the date of the article is and what is actually saying.
What a stupid April Fools joke! Yes, it’s good to be funny, but because of bad experiences I had with American, Delta, and JetBlue, I switched over to Frontier Airlines. Although Frontier’s not that great either, I might as well pay less money if I have to deal with what airlines throw at you. When I first started reading this article, it was apparent it was complete garbage. Then scrolling to the top, you see where it lists April Folls under the keyword search.
Sounds like you’re just a horrible travel and you have your own issues if you’ve issues with all of them.. maybe point the finger back at ourself for once you jackwagon
Frontier screwed My brother and I over royally a couple years ago when they decided to take our 9:00 p.m. ish flight and combine it with the 11:45 a.m. earlier in the day and didn’t even bother to tell us so we didn’t end up having to spend money on a hotel room overnight for which neither of us had budgeted They said they emailed us and my brother who’s the one who bought the tickets or showed me his email I went through it I went through the spam folder and there was absolutely nothing from them!
Sounds like you may want to start flying private.
It’s an April fools joke.
In my opinion this is less of an April Fool’s joke than the apparently legitimate story about a startup airline being based in Lincoln, Nebraska.
I was all in on this thinking wtf??!! Then I realized…. Oh man…. You got me
Maybe they won’t cancel your flight 3 hours before departure time and leave us stranded. Doesn’t matter I will never fly AAagsin because of the repeated cancelation
Well played. I was just about to cut up my card!!!
That’s not funny ???? the thoughts ??? going through My mind ?????
All these morons commenting on this post like it’s real lol
It’s an AF joke, but, honestly a peek into the thinking of the planning minds fuh real!! ;(
Remember Sting, The Police, “They were in a policy meeting, they were planning new ways of cheating “……
AAlines is the only group who could pull off an AFoll joke like this.
What a shame that this was posted today and not any other day. It would’ve given me reason to mock American. Good joke though. I imagine some people might believe it forgetting the day
Stupid! What a waste of time. Parking is bad now too!!! Ridiculous idea!!!!
I was all over this one. So many things going through my mind. I was thinking WHAT IN THE WORLD, This will never work!, How is this going to affect my upcoming travel, I don’t care about my name being on a building and Seriously is this some kind of joke.
You got me!!!! Love it, had a good laugh Thanks
The fact that I read about halfway through the article before saying to myself “no way, this is a prank… oh wait it’s April Fool’s Day!!” is an indication that the airlines hate their customers enough for this to be plausible.
You would think AA has more to worry about and money to spend than to publish something as stupid as this!
No fool like old fool
Lol now this was funny…I can’t April fools Day has everyone playing hard ball this year lol
Awesome 4/1 joke.
Now that’s a good one!
Wow! I can see that the article has taken quite a few “readers” (I am using that term generously) for a ride!
LOL! That mileage redemption policy has been in place for some time now. And I’m surprised that this article didn’t address AA’s new surge pricing program, too.
Let me tell you I was in panic for a couple of seconds and then I got it, the joke, but ask yourself a question the airlines came up with this for a “joke” right or maybe this is there plan to give people a heads up on what’s to come in near future! Just ask your self what is the best way to pretend it’s an April fools joke but what’s REALLY to come! FOR REAL! I can see the airlines actually doing this plan to get their money back from the “pandemic” and then keep it in place to make insane money! But poor people would be totally screwed WITH THIS PLAN! I know people are no way would it work, well let me tell you what our government does this kind of thing ALL THE TIME! I should know! Just when u think it’s not possible, it comes true! BEWARE
The leaderboard for most AA frequent flyer miles. Good lord, that’s funny!
DISASTER, CAOS AND TERRIBLE CUSTOMER SERVICE IS AROUND THE CORNER!
Sure, this is supposed to be a funny and absurd April Fool’s Day joke. But it’s not that much of a stretch to believe that American Airlines would actually consider something like this.
I agree. Living in a city where AA is the main airline I was thinking all kinds of shit was going to be hitting the fan!!!
My heart is slowly getting back to a regular rhythm.
Don’t give them any ideas! LOL!!
As someone who got an AA card this week I about started to cry reading this article! Very glad I read the whole way through!
Not funny. Isn’t there enough fake BS already? Why feed the conspiracy mentality? Irresponsible journalism. Undermines the integrity of the press.
Look a number of idiots who did get it.
Thanks for the laugh! I would of paid good money to watch the beat downs for tickets at AA counters!! Ahhh if only it was true! Again thanks for the laugh!
All these folks yapping and complaining about an article that they didn’t read. That’s hilarious and sad. That’s a microcosm of the social media world…C’mon people…
Well done!
These days, most everything I read in the news looks like an April Fool’s joke, or so it seems!
AA doesn’t deliver service anymore, so why should they sell any more tickets? ? ?
Ok. I’m a dumbass. I read the article and got more and more pissed off on each sentence. We had just purchased tickets for two destinations and then I see this! I thought this had to be a joke but, it really sounded serious in my head. I was getting ready to forward the article when the April fools became apparent. Great job! You got me. I’m a new fan!
That was beautiful hahahaah! I was on my way to my co-worker’s desk to ask if they had heard about this monstrosity!
If AA approved this they are idiots, if not they should sue
United and Delta soon to follow.
City of Chicago announced a $200 trillion airport upgrade to manage the change. Seeks federal funds for 99.8%.
Southwest begins a test on “auction buster” fares, with its first $2,500 fare from Chicago to Moline.
Secretary Pete screams for return of regulation via the Civil Aeronautics Board.
“Travelers will, however, continue to earn miles by spending on the credit card”
So we earn miles but can’t go anywhere? This feels like it’s… not a joke. lol
Several people here seem to think that AA wrote this. Surely Cranky wrote it himself?