What if award charts didn’t have charts? What if they instead had a modern website that told you which airline was cheapest to fly for any trip in the world? It might sound crazy, but that’s actually what AAdvantage President and CEO Brad Tilden wants to do. Tilden’s plan, known as the AAdvantage Award Chart Rewrite Project, is to replace AAdvantage’s existing award charts with a real estate website.
As the president of AAdvantage, the world’s biggest loyalty program for frequent travelers, I’m always looking for ways to improve the company’s processes and the customer experience. One thing I’ve found is that our award charts—which have been online since the 1960s—are an antiquated, paper-based system that could benefit from an update.
The AAdvantage president wants to replace premium tables with property pages
Gary Leff 18. June 2021 The president of the American AAdvantage program has stated that he plans to abolish the premium tables. In comments on The Points Guy’s website, he said they were working on an alternative similar to a real estate website that shows how many people have bought properties in a particular area and in what price range, and also shows how many people are currently looking for a particular property. The more I think about this model and the analogy it provides, the worse it looks for customers.
- Price is what America is saying right now. Prices will fluctuate instead of providing consumers with an anchor in the form of a stable published price list.
- Prices are expected to rise What will happen to house prices after the Great Recession?
- Create a buying frenzy. How important is the number of people watching a particular route on certain days? We know that many people are interested in holiday destinations with warm weather during the Christmas holidays, that Europe peaks in the summer. What can the heat map tell us, other than to act fast or lose?
- Are you willing to offer Americans a price above the retail price? Where I live in Austin, home prices regularly exceed the asking price by over $100,000.
|Median sales price||$465,000|
|Median sales price, annualized||42.3% increase|
|Houses sold, year on year||an increase of 33.1|
|All houses for sale, on an annual basis||19.1% Decrease|
|New ads, annualized||35% increase|
|Median number of days on the market||24|
|Median length of stay on the market, compared to the previous year||+8|
|Percentage of units sold above the asking price||73.7%|
|Percentage of homes sold above asking price, compared to previous year||42.9% increase|
By replacing the premium tables with a real estate site, a valuable medium of exchange becomes a more or less synthetic CDO. At some point, the idea arose that the price of a premium ticket in miles should be the same as the price in dollars, when nothing could be further from the truth. Loyalty programs were created to reward customers for their travel by giving them more value for their vacation:
- The reclamation program had access to the airline’s entire contaminated inventory. They could give the unsold seats to Mile participants without reducing ticket sales.
- And the frequent flyer program is the largest purchaser of airline seats.
They get huge discounts and places for which the airline would not receive revenue from ticket sales, and make them available to loyalty program members. The essence of this program is to offer heavily discounted tickets to reward loyalty. This gives the program incredible leverage. There is not always enough inventory wasted to do this when the planes are full and the program prints too many miles. That’s why there are Rulebusters bonuses where extra supplies become available for more miles.
Not everyone flies business class to Europe or Asia, and certainly not every year. This is not the only way people spend their miles. But offering valuable rewards gives members something to strive for. That’s the motivation – back when we used screensavers, people would put Bali, Thailand, or even just Hawaii on their screen. It’s this ability to make travel much more affordable than simply saving money on a cashback card and using it to travel that drives people to join the program, to prefer a miles card over a cashback card, and to use the program’s partners that reward miles transactions (and for which the airline gets paid).
The price cannot be changed at our discretion. There must be a goal to achieve. And it also reinforces our sense of value, whether or not we get a good deal on the program. If you remove the allocation table, you get a big postmodern mess. Nothing to hang your hat on. The Program may, in its sole discretion, increase the price of awards without notice to the Member (let alone advance notice to the Member so that the Member can expedite the awards to reach the destination or redeem miles for travel for which credit is given). We note that this is exactly what happens in all programs that have eliminated premium tables.