Discover more from Understandably by Bill Murphy Jr.
Glamorous business traveler
Who invented frequent flyer miles, and why? Also, 7 other things worth knowing today.
Prologue: Short, strange memories sometimes pop up out of nowhere.
One that comes up for me was from years ago, way too late at night, boarding a redeye flight out of LAX heading home to Washington.
We passengers were exhausted and quiet on the jetway: a mass of humanity, dragging our feet and rethinking our career choices, shuffling toward the discomfort of economy class and five hours of fitful sleep.
From somewhere behind me, a disembodied female voice broke the silence:
"All my friends back home are like, 'There goes Jenny, the glamorous business traveler, so lucky, back and forth to sunny California.' They have no friggin' idea."
I thought of this, and the topic for today's "top essay," while my wife and I got ready in our hotel room for our college reunion this weekend.
I'd been wrangling with the Marriott app, trying to calculate whether I'm likely to stay the five more nights I'd need this year in order to keep my marginally elite level of status.
Then, I jumped in the shower, and I thought: Wait, why do I even need status if I'm not sure I'm going to stay five more nights?
Then, I put on my suit jacket and I wondered whether I was overdressed, and I thought: Wow, whomever it was that came up with the idea of travel loyalty programs like this was brilliant.
Then, I looked in the mirror and I realized, 'nah, I look good," and I thought: Wait, I know exactly who came up with the idea of these kinds of programs.
His name was Thomas Pickett, and he was an executive at American Airlines more than four decades ago. This was when the airlines were going through radical structural changes as a result of deregulation.
The glamour and novelty of air travel had worn off. So, Picket came up with the frequent flyer program at American Airlines (AAdvantage), which became the first sustained, computer-assisted frequent flyer program in the world.
"We are attempting to build brand loyalty in a commodity market," he told the New York Times in 1982, as the newspaper marveled at "the frequent flier sweepstakes, the latest and hottest marketing game."
Pickett's innovation did more than that, in fact. It set the stage for an entire business model and a currency. An industry analyst named Joseph DeNardi explained it much better than I ever could.
Basically, DeNardi argues that the airlines bring in hundreds of millions of dollars, maybe even billions, in "marketing revenue" from selling frequent flyer points to banks (which then use the points to market credit cards).
I think his idea was that the airlines should spin off the frequent flyer programs into separate companies. This way, people could invest only in the highly lucrative miles and points programs, without investing in the other, riskier parts of the airline industry: things like flying planes and leading employees and (worst part) dealing with the public.
The airlines objected to DeNardi's theory, but then came the pandemic, and some of them had to put price tags on their frequent flyer programs as part of their survival plans.
For example, American Airlines told the SEC last year that it planned to raise $10 billion in bonds and leveraged loans, backed by its loyalty program. So: valuable asset.
Pickett died last year after battling cancer. I appreciate that he lived long enough to see the size of the price tag that was placed on his innovation.
"That was one of the most successful marketing initiatives in that period, not just at airlines but in the entire marketing world," said Don Carty, who worked for Plaskett in the 1980s and who later became CEO of American Airlines.
So, the moral of the story is, go to your reunions.
No wait, sorry, that was Friday's moral.
Today's inspirational moral is that there's often a way to find something new and special about almost anything or anyone on this planet—the kind of insights that make you really stand out.
Heck, they’re the kinds of things that later leave people like me thinking in the shower about how to amass needless hotel stays, or that keep the Jennys of the world flying back and forth across the country.
And sometimes, if you're really lucky, they also turn out to be what makes you more valuable than you ever imagined.
By the way, the reunion was awesome.
7 other things worth knowing today
A group of 20 senators struck a bipartisan gun safety framework on Sunday, marking a significant breakthrough in Congress’ attempts to address recent back-to-back mass shootings. Neither side of the debate is thrilled, but if it works out it will mark the first new federal gun restrictions in decades. (Politico)
Americans are facing grocery store price hikes at levels not seen since the inflation-soaked 1970s, with double-digit increases on everything from eggs to poultry. Friday's inflation report was a triple-whammy for consumers, with massive price hikes in food, shelter and energy—sectors that make up the majority of household expenses—as well as in almost every other category. (CNN)
A senior software engineer in the Responsible AI division at Google claims that the company's AI robot is now sentient, and has thoughts and feelings. Google denies this, and has put 41-year-old Blake Lemoine on paid administrative leave for breaching confidentiality. (Engaget, Full transcript of chat the engineer says he did with the AI robot)
A suburban Seattle city will pay more than $1.5 million to settle a dispute with a former assistant police chief who was disciplined for posting a Nazi rank insignia on his office door and joking about the Holocaust. (ABC News)
In Alabama, a man who planted flowers on the gravesite of his fiancee was found guilty of littering this week. Hannah Ford was killed in an automobile accident at age 27, about a month after she became engaged to Winston “Winchester” Hagans. Hagans placed a planter box full of fresh flowers and photos of the two of them on her grave in Auburn, Ala., but was arrested at the direction of the Ford's disapproving father. (WashPost)
Know anyone who wants to be a lifeguard this summer? The U.S. is experiencing a nationwide lifeguard shortage and the American Lifeguard Association, based in Virginia, warns it is only going to get worse. (Fox News)
It was so hot in Arizona last month that a TikToker has amassed a following by cooking hamburgers and steaks and even baking a Betty Crocker cake mix using the dashboard of his parked car for a grill. A thermometer shows the temperature at 204 degrees Fahrenheit. But as they say, it’s a dry heat. (Accuweather, TikTok video, Tucson.com making fun of people who say ‘it’s a dry heat.’)