The COVID-19 pandemic has turned the travel industry on its head. Airlines and hotel chains have had to recreate their business on almost a daily basis to survive. As the pandemic has stretched on, these travel brands have started looking to the future. In the case of airlines, their loyalty program will likely be a significant part of a new path forward. That’s why a recent promotion by American Airlines is so interesting.
One Mile at a Time wrote about a new promotion AAdvantage launched recently, Tailwind. The particulars of the promotion (which is unfortunately limited participation):
- A one-time $59.99 fee
- Participants will earn double AAdvantage miles for the rest of 2021
Registration is required by February 12th, 2021, so if you were targeted for the promotion there’s not much time left to register. I was not targeted for the promotion so I don’t have any screenshots, but Ben from One Mile at a Time has them on his site. If you login to your AAdvantage account and look for the “Promotions” tab near the top of the screen, you may find that you’re eligible.
Is This Promotion A Good Value?
Investing $60 in cash early in the year without knowing how much you’re going to travel is certainly a bit of a risk. If you normally fly on paid tickets, whether for business or pleasure, it won’t be hard to get the value out of the $60 investment. Each person will have their own value for an AAdvantage mile. Mine is somewhere between 1.5 and 2 cents, which means I’d likely need to spend somewhere between $700 and $800 on airfare.
The other thing to consider for a promotion such as this is that AAdvantage miles can be a bit harder to come by than United, Delta or Southwest. On top of co-branded credit cards, all of those airlines have bank partnerships where you can transfer flexible points (such as Chase Ultimate Rewards or American Express Membership Rewards) to the airline for award flights. While American Airlines does have a partnership with Citibank, there is no equivalent flexible currency you can transfer to your AAdvantage account.
The Final Two Pennies
Airlines and hotels continue to find unique ways to generate revenue from reluctant travelers. The value of the Tailwind promotion for American Airlines isn’t the $60 they collect. It’s the potential to lock you in to a year-long commitment on flight purchases. And, with extra miles in your account you just might be a bit more loyal to the airline after the promotion runs out. I like the thought that American put into this promotion. If it were my decision, I think I would have expanded the promotion widely and even considered waiving the fee completely. Additional mileage earning opportunities for hitting higher spending tiers would have been another consideration.
At the end of the day, airlines probably have enough cash to make it through the pandemic. There’s still an outstanding question about how strong they’ll be once things are a bit more normal. If a recession continues to roil travel in general, loyal customers will be the rocket fuel for those that succeed. In dire times such as these, loyalty programs need to do what they were originally designed to do. Now more than ever, the goal should be to build loyalty, not monetize the customer. This promotion is interesting, but still feels more like a transaction than a relationship.
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