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In February, I wrote about how American Airlines planned to no longer provide AAdvantage® frequent flyer miles and Loyalty Points (which are required to earn status) to passengers who didn’t book directly with the airline, select partner airlines, and preferred travel agents. This was supposed to happen on May 1st, but was postponed until July. Now, American’s CEO says it’s not happening.
Yesterday, American Airlines announced that Vasu Raja, Executive Vice President and Chief Commercial Officer, would be departing the airline in June. This was rather sudden and the release does not mention why he’s out. It’s speculated that this scheme led to his demise at American. Under his plan, passengers would continue to earn AAdvantage® miles and Loyalty Points only when they:
- Book directly with American and eligible partner airlines.
- Book travel anywhere as an AAdvantage Business™ member or contracted corporate traveler.
- Book through preferred travel agencies.
At the time, Raja, said:
We want to make it more convenient for customers to enjoy the value and magic of travel. Not only does booking directly with American provide the best possible experience, it’s also where we offer the best fares and it’s most rewarding for our AAdvantage® members.”
Raja wanted American to focus on direct sales and did not prioritize managed corporate travel or other third-party channels. His gamble did not pay off and American was not able to get passengers to buy higher fares. This meant that some business travel shifted to Delta and United. In the process of alienating business travelers, American also managed to create issues with its longtime transatlantic joint venture partner, British Airways, as it did not see the traffic it needed to keep its premium cabins full on transatlantic flights.
Along with Raja’s departure, American also brought down its Q2 guidance. TRASM (total revenue per available seat mile) is expected to be down 5% to 6% compared to the same quarter last year. American had been forecasting a 1% to 3% drop.
A lot of apologies from AA CEO Robert Isom this morning, but only concrete news so far is that the preferred agency program that would have punished travelers by not letting them earn miles everywhere they book is NOT happening
— Brett Snyder (@crankyflier) May 29, 2024
American CEO, Robert Isom, spoke at the Bernstein Strategic Decisions Conference this morning. He made a commitment to start working with customers to secure more of their business without the draconian policies that were coming. It will be interesting to see what American does here as for many the damage might be done and the airline also laid off its corporate sales staff over the past few months. All channels will return to showing the lowest available American fares and mileage earning will remain as it has been.
Anthony’s Take: Business travel is not what it was pre-pandemic, but it’s returning. American’s punitive earning policies and fare restrictions were greedy and shortsided. Is it enough to make up for the damage done?
(Image Credits: Miguel Angel Sanz and American Airlines.)
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Advertiser & Editorial Disclosure: The Bulkhead Seat earns an affiliate commission for anyone approved through the links above This compensation may impact how and where links appear on this site. We work to provide the best publicly available offers to our readers. We frequently update them, but this site does not include all available offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
