Organizational Behavior, 12th Edition

American Airlines and Citibank: Leading the Charge for Frequent Flyer Miles

“I'm not one to recommend taking on any new credit card lightly,” says Joe Brancatelli, publisher of business travel Web site www.joesentme.com, “but once in a while, an offer comes along that's irresistible.”^a

“As long as [the airlines] don't mess with the consumer perception of the value in their programs, they're a perpetual money-making machine.” –Gary Leff, Inside Flyer.^c

That's exactly the reaction American Airlines and Citibank®, paired by a mutual interest in protecting profits during an economic slump, hope consumers have to their co-branded Citi®/AAdvantage® credit card. The card, launched in 1987, provides casual customers and frequent travelers alike the opportunity to earn American Airlines AAdvantage® miles with a simple promise: Earn miles for everyday purchases.

Cardholders earn one mile per dollar spent on purchases with the card, with multipliers or accelerators invoked for promotional special offers–for example, 2 miles per dollar spent on all grocery purchases for a limited time. But the biggest draw for American customers is often the signing incentive, which is typically a compelling offer of American Airlines AAdvantage bonus miles, awarded for achieving a pre-determined (but reasonable) spending threshold within the first several months of having the card (e.g., 30,000 bonus miles after spending $750 within 4 months of becoming a cardmember).

Beyond the miles, monthly mailings, ...