American Airlines is making some structural changes in hopes of improving profitability. While I’ll discuss that in more detail in a separate post, in this post I want to cover the development that probably has the most implications for American’s loyalty program…
In this post:
American’s new Senior Vice President of AAdvantage
American Airlines has just named Scott Long as Senior Vice President of AAdvantage. Here’s how the airline described this decision in an internal memo:
With our new exclusive partnership with Citi on the horizon, our cobrand partnership will be more important than ever in helping increase engagement with the AAdvantage program, drawing more customers to the world’s largest and most valuable travel rewards ecosystem, and driving profitability. Going forward, both the AAdvantage program and our cobrand card portfolio will be the responsibility of Scott Long, who I’m delighted to announce will join Commercial as our new Senior Vice President, AAdvantage. Scott has distinguished himself in several roles across the company – most recently his very successful leadership of Investor Relations. Scott is the perfect person to lead the continued development of the world’s best travel rewards ecosystem and ensure the successful launch of our innovative card partnership with Citi.
Indeed, in the coming years we’ll see some changes to American’s co-brand credit card portfolio, as American and Citi are launching an exclusive partnership (while American currently also partners with Barclays). American sees significant upside from this deal, though only time will tell how this plays out.
So, who is Scott Long? He’s currently American’s Vice President of Investor Relations & Corporate Development. He has been at the airline for over 15 years, previously working in various positions in Revenue Management, Planning, and Finance.
What’s interesting is that in 2022, AAdvantage became part of American’s Revenue Management department, while that will no longer be the case following this latest change. That could be a good or bad thing.
Being integrated into Revenue Management makes it easier to come up with a cohesive strategy for how award availability is released, and how the airline internally accounts for the cost of that. When the loyalty program is outside of Revenue Management, it can be a more adversarial relationship, in terms of making award seats available at a reasonable cost.
My take on these AAdvantage leadership changes
We can of course try to draw all kinds of conclusions based on corporate structures and someone’s work background, in terms of what it means for the future of a loyalty program. Quite honestly, I know virtually nothing about Long — of course on the surface, promoting from Investor Relations to running a loyalty program might seem a bit odd, but there’s nothing necessarily wrong with that.
American is obviously struggling financially in comparison to Delta and United, and has a lot of ground to make up. The airline has made a lot of mistakes. Ironically, though, I’d argue that AAdvantage is actually the one aspect of the airline that’s currently the most compelling:
- American was innovative with introducing its Loyalty Points system, and I think that’s probably a smart strategy that benefits American’s bottom line, given the extent to which it encourages profitable behavior
- There continue to be good uses of American AAdvantage miles, much more so than with Delta SkyMiles and United MileagePlus
Obviously loyalty programs at large just aren’t as lucrative for consumers as they used to be, given that there are fewer upgrades to go around, due to airlines selling more premium seats.
With AAdvantage having new leadership, I guess my one hope is that not too much actually changes with AAdvantage:
- I think any revenue disadvantage at AAdvantage isn’t due to the program being broken or bad, but due to the airline being broken or bad, and lucrative customers not wanting to fly with American
- I hope that American continues to view AAdvantage as an opportunity to differentiate itself, while working on other areas to lure high yield and profitable customers
So I hope this isn’t one of those situations where someone takes a fresh look and says “well Delta and United are making money and they’re doing XYZ, so we should do that as well.” Only time will tell.
It seems like American management currently has a heavy focus on making changes to improve performance, and in those situations, there’s the tendency to overcorrect, in order to see fast results. That might not be great for members.
Bottom line
Scott Long has been appointed Senior Vice President of American Airlines’ AAdvantage program. He’ll oversee the loyalty program and the new (more lucrative) Citi co-brand credit card portfolio. While there are a lot of things that I hope American changes to be more like Delta and United, the loyalty program isn’t one of those. We’ll see how this goes, but I’d certainly expect this to lead to some change in direction, for better or worse.
What do you make of American appointing a new leader for AAdvantage?
Let's hope he doesn't continue the devaluation of AAdvantage points. It's gotten progressively worse over the years and partner award availability has all but disappeared for business class. I don't need AA points for a coach ticket, I can buy those anytime.
I see even more focus on credit cards and tying "loyalty" to co-branded credit card use because that's where the profits come from. Not flying Mr. Business Man M-TH from Charlotte to Chicago.
I am paying off my Barclays Aviator and closing the account. If i get force transferred to a Citi card by American I would miss the signup bonus.
American’s current business class product is BROKE. Their inability to deliver the new product is a catastrophe. We haven’t been this low since the 772s with the old dinosaur configurations back in 2014 that were an embarrassment before refurbishment. Might as well fly bulkhead and stay...
I am paying off my Barclays Aviator and closing the account. If i get force transferred to a Citi card by American I would miss the signup bonus.
American’s current business class product is BROKE. Their inability to deliver the new product is a catastrophe. We haven’t been this low since the 772s with the old dinosaur configurations back in 2014 that were an embarrassment before refurbishment. Might as well fly bulkhead and stay in the main cabin or purchase business class tickets on BA to Europe.
So...they put in a "bean counter" with not much in the way of sales/marketing (or customer relations) experience in charge of the supposed frequent flier program?? This clearly sends the message that AAdvantage is no longer a customer centric program, it is just another credit card revenue enhancement scheme.
THIS!!! Of course things will get worse. Mister cost-cutting bean-counter with zero experience with customers (you know, the human cargo) means all they will be doing is "enhancements". We can all be assured of that.
I was contacted by American that I was no longer entitled to be a Concierge Key. My flying frequency had not decreased a bit, however they insinuated that I did not change enough on my AAdvantage card. It was a demonstration that rewarding people for being loyal and actually flying with them was not a priority. For years I felt special because I exclusively flew American for 20 years. I was seated next to a...
I was contacted by American that I was no longer entitled to be a Concierge Key. My flying frequency had not decreased a bit, however they insinuated that I did not change enough on my AAdvantage card. It was a demonstration that rewarding people for being loyal and actually flying with them was not a priority. For years I felt special because I exclusively flew American for 20 years. I was seated next to a CK on a flight last week. He told me he flies American infrequently but he runs expenses to support his company on his card totalling a million dollars annually. He said he flies maybe 6 to 10 times a year and was shocked when they invited him to be a CK.
AAdvantage is not a loyalty program.
It's a scheme to sell pre-paid travel and give a (small) part of this as a rebate on purchases.
AAdvantage PP is no longer within my reach since the move to Loyalty Points. Since most of my destinations are to Europe and Asia, I'm banking my Oneworld miles with QR and the Avios alliance. At least I was able to get some good redemptions with the remaining AA miles I had. Hoping for one more JL F, then I'm completely done with the program.
Simple message to the new guy: For all of the reasons AA management already knows . . . as they were knowing and intentional decisions . . . you lost me . . . a multi-year Concierge Key.
Although a long-term member of AAdvantage, my redemptions have been exclusively for premium seats on international partners, rather than redemptions for US destinations on AA metal.
Up to now it's worked well for me with a reasonable balance between inventory and number of miles required.
Being outside the US there is next to zero opportunity to earn squillions on miles with credit card signups churn as most readers here can do. So, its...
Although a long-term member of AAdvantage, my redemptions have been exclusively for premium seats on international partners, rather than redemptions for US destinations on AA metal.
Up to now it's worked well for me with a reasonable balance between inventory and number of miles required.
Being outside the US there is next to zero opportunity to earn squillions on miles with credit card signups churn as most readers here can do. So, its buy-up of miles direct from AA. My only gripe there is that AAdvantage does not have meaningful sales of miles anymore, with so-so bonuses of 30-35% being there a lot of the time. Cash buyers of miles should be enticed if they want to see instant cash of their balance sheet.
Maybe this is something Scott Long could look at to score a few easy brownie points.
AA has made it abundantly clear that they do not want passengers buying tickets. Instead, they want AA credit card holders charging up their credit cards. Those who do that are AA’s real customers. The poor saps that buy tickets and actually fly AA are the ones left holding the bag with AA’s indifferent employees, poor service recover, overly banked hubs not designed for the volume of traffic they receive, etc. And until the focus...
AA has made it abundantly clear that they do not want passengers buying tickets. Instead, they want AA credit card holders charging up their credit cards. Those who do that are AA’s real customers. The poor saps that buy tickets and actually fly AA are the ones left holding the bag with AA’s indifferent employees, poor service recover, overly banked hubs not designed for the volume of traffic they receive, etc. And until the focus changes back to the passenger and not the credit card holders, then their new customer initiatives will just end up being another failed experiment by a once great airline.
Credit Card spend is very profitable for them so keeping those customers happy is probably high on the list. I'd say most non corporate flyers probably just book the cheapest flight on various portals and aren't really the target audience in regard to aadvantage.
The airline needs a coherent strategy balancing making AAdvantage profitable versus the airline operation. That's from the airline and shareholder's standpoint.
AAdvantage can drive people to loyalty and spend a lot of credit cards. AAdvantage can also cause people to give up on American Airlines.
From the passenger's standpoint, the objective is the best and cheapest operation with the most generous AAdvantage but having a bottom line of nearly a non-profit organization.
(From the flight...
The airline needs a coherent strategy balancing making AAdvantage profitable versus the airline operation. That's from the airline and shareholder's standpoint.
AAdvantage can drive people to loyalty and spend a lot of credit cards. AAdvantage can also cause people to give up on American Airlines.
From the passenger's standpoint, the objective is the best and cheapest operation with the most generous AAdvantage but having a bottom line of nearly a non-profit organization.
(From the flight attendants union standpoint, it's to rip off junior FA and enrich the senior FAs)
AAdvantage is the only decent thing about the airline unfortunately. Even then, without the award chart and with worse OneWorld partner availability it has gotten worse. I say that as an ExP for the past ~10 years.