I totally missed this. I was at the American Airlines Media Day recently and got to hear a bunch of the executives talk about what they see for the future. It was an informative (if not transformative) day of information.
I was standing right beside Gary when he had this conversation with the head of loyalty, Bridget Blaise-Shamai. And, I totally missed the nuance.
Bridget positioned the upgrade discussion around the fact that members aren’t earning less upgrades. They ‘re just clearing the upgrade list closer to departure.
Gary brings up the point that the statement means American likely didn’t earn any extra revenue by holding seats longer. Now, it’s still possible AA earned more money from people buying up to First Class. It’s a hard question to answer without access to the data.
First Class used to be really expensive. Airlines used a formula that charged a heavy premium for those seats, banking on a small subset of customers who would always pay the premium. The new model charges significantly less for those upgrades. We assume that means the airlines make the same or more money on the first class cabin. Hard to be certain, especially when some airlines have shrunk the premium cabin on certain planes.
The Final Two Pennies
Put simply, American Airlines is making customers wait longer for upgrades. They’re not alone. Delta and United have adopted similar philosophies. Does that convince some customers to buy-up, so they can secure that First Class seat? Or, does it just make elite members mad without the prospect of additional revenue?
What do you think?
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