As my 2016 travel planning came to a close I had to choose a carrier for one last long-haul flight, a trip home from China. I strongly considered American Airlines for that journey, even with a less convenient schedule. The miles earned on that flight would not do much for me in terms of AAdvantage status; I was already over 75,000 (Platinum Pro, which didn’t really exist) and well short of 100,000 (Executive Platinum). With some flexibility in my travel plans I considered that a decent option. Except that American was not offering Platinum Pro qualification in 2016. The new tier would only be eligible for passengers who hit the target numbers in 2017. So I took the more convenient flight and made my way home, comfortable in my decision to not spend extra money or effort with a company that would not provide me incremental value for my spend.
Upon further review I’m incredibly happy with the choice I made.
This week American put Platinum Pro on sale, sending emails to members with the opportunity to buy access to the new program tier. Reported prices range from $800 to more than $1500 (my offer was $899) and the purchase allows members to immediately realize the benefits of the new status level for the duration of the 2017 program year. Such buy-up offers are common for the AAdvantage program. They are not reserved only for the year-end “near-miss” members and the variations in pricing and tiers suggests that the company is actively testing customer thresholds and motivation factors. And I’ve never been less interested in such a purchase than I am right now.
I was never particularly interested in it anyways, to be fair. At $599 for Gold status (another offer I’ve received in the past) the pricing simply did not line up with the potential benefits. And even if I could come up with some fuzzy math to suggest that the $900 would be a smart expense for me (which would be a spectacular feat of numbers manipulation), the approach this time around is tremendously off-putting. The company had the opportunity to earn my business in a natural way, allowing qualification based on normal activity. It chose to block that from its members, a decision I’ve questioned frequently since it was initially announced. But at the time the company at least made the argument that it wanted customers to qualify for the benefits. Turns out that qualifying is just a cash transaction, not loyalty.
Generating the incremental revenue is almost certainly good for the company in the short term. But the longer-term impact of defining specific price points on the benefits is a risky proposition. Converting points into a fixed value currency is happening relatively quickly across the industry. But the other benefits, the less defined rewards for choosing to move business to a particular company are also much harder for a consumer to quantify. What is access to priority boarding or security lines really worth? How much should an upgrade cost (assuming it is available)? Does the priority handling from customer service really have a price tag? Without the associated cash transaction it is much easier for American to maintain the exclusivity of those benefits and the allure of earning them “naturally.” With a price tag it is far easier for consumers to see what the value is for a la carte purchases rather than striving for status.
Ultimately decisions like this are part of a much larger shift in direction for the airlines. The points side of loyalty programs remains the golden goose, at least for now. It is well monetized and there is considerable evidence to suggest that move was strategically advantageous to the programs. Trying to bring the experience side of the loyalty programs into that monetization effort may prove to be similarly successful. And it is not just one airline on this path. LCCs are most well known for the ancillary sales of just about anything and that includes preferred seating, priority boarding, and more. Legacy airlines have dabbled in selling priority boarding and security access as well as the full premium passenger treatment, with American’s Five Star and United’s new Signature Service offerings. But broad expansion of those services runs a significant risk of alienating the true “road warrior” travelers even more than the ever decreasing upgrade numbers did in recent years.
I am not one of those road warriors. I travel plenty but my schedule is often more flexible and I can shop around plus or minus a couple days to get a deal and a preferred carrier. I mostly buy the services I want (usually in the form of discounted premium cabin fares) rather than trusting that elite status will deliver those benefits for me. And maybe that’s good news for the airlines as my incremental spend is slightly higher when I do make a purchase. But I’m also no longer loyal to a program; I’m loyal to me. Not because of the changes in the points but because of the changes in the services on offer to elite members and the fact that I can just buy them ad hoc for far less money. It will be interesting to see how others respond faced with a similar choice.
Then again, I know that at least some people are biting on the Platinum Pro offer. So maybe selling loyalty is better business than it appears on the surface.
Header image: AA Platinum Pro card from aa.com
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American introduces Platinum Pro to shaft all their AA lifetime Platinum members, unless there is another reason.
Seems like monetization is growing all around I guess. I wonder if the airlines feel that the risk of alienating the real road warriors is mitigated to some extent by the consolidation in the industry? Fewer alternative choices to turn to especially as they tend to mimic one another.
I’m not surprised by this move. Why give away something people earned when you can charge an egregious amount for it. Since most of these people flew the the required amount to qualify, I could see an offer closer to the $499 price point…and actually not be offended…since the Plat PRO level wasn’t part of the 2016 qualifying year. But the $1,500+ offers are ridiculous. I think only a very small amount of travelers who would have otherwise bought 500-mile upgrades would make benefit at that price point.
These numbers certainly could make sense for a road warrior, especially since American charges for status matches. They even may work for occasional travelers like my dad. He got a $1,099 offer for Plat Pro and is seriously considering it. I think he can probably squeeze enough value out of it to make it worth his while.
He was roughly in the same boat as you, trying for Plat Pro last year. He’s not upset they’re selling it. However, I do think it was a bad idea for AA not to offer it based on 2016 activity. They already got rid of soft landings, so I shouldn’t be surprised.
I’ll be insanely interested to see what happens during the next economic downturn. I wonder if an extension of better benefits will increase loyalty again. Right now, I’m much more of a free agent than I’ve ever been.
I’m curious where the math comes from for him to justify the numbers? If it is all in buying e500s then I am especially skeptical, as I expect those upgrades will become significantly harder to acquire in the coming year.
I’d like to know if you could split tender (two credit cards for payment) this and how it would be coded. Meaning if you had say the Citi Prestige and the new Chase 100K card you might be able to use all your 2017 travel credits in one transaction and offset most of the out of pocket for this. Don’t get me wrong, your still paying and I agree I would not pull the trigger on a more expensive offer put $800-$900 is tempting.
AFAIK only a single transaction. And, while the CC-based travel credit is “free money” to spend I have lots of other ways to use it for things I get value from. Hell, the Chase CSR credit is on pretty much anything. When you can get value elsewhere for that credit the opportunity cost is very real and should not be discounted to justify blowing cash on something this silly.
Another data point – my “offer” received just the other day was $1750 (!)
As a current plat level for 2017 and the last 4-5 years, that seems insulting, especially after hearing that others are getting offers for half that amount … I’d have never bitten anyway, but now it really gives me pause. I’ve often justified chasing the status thing when others ask as an opportunity to take as much advantage as possible (put less generously, a poke in the eye) of a company that is VERY inconsistent in its treatment of regular customers.
Even paying for the occasional standby and better seat selection, it doesn’t require an economics degree to conclude you’ll come out ahead paying for a decent – indeed, better – meal in airports these days rather than chasing the lounges via status.
So has AA incentivized me with this offer? Yep, in a fashion.
If you buy the PP status, at least you avoid the Elite Qualifying Dollars (EQD) requirement. I would not make the EQD requirement for PP, This may be my only opportunity to have PP status.
Just a thought …
The buy-up is only for the current program year, the one I already qualified for. It does not avoid the EQD issue for qualifying in 2017 for 2018 status.
Seems to be a devaluation of both Executive Platinum and Lifetime Platinum. As a holder of both, am seriously considering going back to United or Delta.
As an Executive Platinum and Lifetime Platinum, I made a plea to customer service to not implement these corrosive policies, multiple times over the last few years. I told them there are many of us who choose to fly for business (and to do it on AA), but that choice could change. Well, it did “change” for me and other elites I know…
Given what it’s worth and what it costs I can’t imagine too many takers. Now of course there is always the crowd that likes to do the equivalent of ‘light their money on fire’… they’ll love this offer.
And I’ve already seen a few bragging online about doing exactly that. Oy.
I think my Plat Pro offer is winning: $1949.
I qualified for exec plat in ’16 via a free targeted 35k EQM challenge, and flew enough to get to Plat in ’17. The idea that I’d pay nearly $2k to go up one status is nuts.