'the latest and hottest marketing game invented by the airlines'

Remembering the man who invented the frequent flyer program

Tech issue this morning; sorry for the delay! But thanks to everyone who has emailed me to make sure I’m ok!

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This is a story about American Airlines and, no exaggeration, an utterly brilliant idea.

The story starts 40 years ago, and it changed passengers’ experiences forever. Back then, the airline industry was going through radical structural changes, as a result of deregulation.

At American Airlines, the 30-something senior vice president of marketing, Thomas Plaskett, led the creation of one of the biggest and most successful competitive solutions.

His innovation: The frequent flyer program.

Brand loyalty in a commodity market

It was called then at American what it still is called now: AAdvantage, and it was the first sustained, computer-assisted frequent flyer program in America–maybe the world.

“We are attempting to build brand loyalty in a commodity market,” Mr. Plaskett told The New York Times in 1982, as the newspaper marveled at “the frequent flier sweepstakes, the latest and hottest marketing game invented by the nation’s crippled airlines to buckle more people into their jets.”

Of course, if you fly on American Airlines now, or almost any airline for that matter, flyer programs are a fact of life. Points and miles are a valuable currency. In fact, they’re a huge part of the airline industry’s 21st century business model.

A few years ago, an airline industry analyst named Joseph DeNardi tried to put a price tag on AAdvantage (along with other airlines’ frequent flyer programs), arguing that they were so valuable that the airlines ought to consider them as separate entities.

DeNardi calculated that the airlines likely brought in billions in “marketing revenue” from selling frequent flyer points to banks, so that those banks could use them to entice customers to use credit cards: $1.15 billion at American Airlines, $962 million at United Airlines, $805 million at Delta Air Lines.

It’s fair to say that the airlines disagreed with his premise, but then after the pandemic, cash-crunched airlines were in a hurry to raise money–partly by leveraging their frequent flyer programs.

That meant that they had to put a price tag on them, and American Airlines for example tried to value AAdvantage at a high enough level to justify $10 billion in bonds and loans.

Don’t forget the ‘Southwest Sweethearts Club’

Now, I might quibble a bit with the idea of Plaksett coming up with the whole notion of a rewards program out of thin air, as I’ve previously explored how Southwest Airlines had a so-absurdly sexist-you-have-to-laugh now rewards program in the 1970s.

This was the “Southwest Sweethearts Club,” which gave female secretaries prizes for booking their male bosses on Southwest Airlines.

But, it was Plaskett who really took the idea and flew with it.

After rising as high as he could at American Airlines, Plaskett moved over to become CEO of both Continental and Pan Am, along with serving as chairman of Greyhound Lines, Inc. Later in life he served on corporate boards.

He died in 2021 at age 77. I think it’s worth remembering him.

Maybe even offer him a toast or a prayer next time you find yourself hurtling through the sky in a pressurized metal tube.

“That was one of the most successful marketing initiatives in that period, not just at airlines but in the entire marketing world,” Don Carty, who worked for Plaskett and later became CEO of American Airlines, told the Dallas Morning News. “Tom was very much an advocate and the driving force behind making that happen.”

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Other things:

• The Federal Aviation Administration is closing the airspace around El Paso International Airport in Texas for 10 days, grounding all flights to and from the airport. A notice posted on the FAA’s website said the temporary flight restrictions were for “special security reasons,” but did not provide additional details. The shutdown is likely to create significant disruptions; El Paso, a border city with a population of nearly 700,000 and larger when you include the surrounding metro area, is hub of cross-border commerce alongside neighboring Ciudad Juarez in Mexico. (AP)

• A person was detained for questioning Tuesday in the kidnapping of Nancy Guthrie, hours after the FBI released surveillance videos of a masked person wearing a handgun holster outside Guthrie’s front door the night she vanished from her Arizona home. News outlets later interviewed a man who said he was questioned and released. (Authorities have not confirmed that the person they picked up was in fact released.) (KCRA)

• On the House floor, congressman Ro Khanna named six high-profile men he says are included in the unredacted version of the documents relating to Jeffrey Epstein: Leslie Wexner of Victoria’s Secret; Emirati businessman Sultan Ahmed bin Sulayem; and Salvatore Nuara, Zurab Mikeladze, Leonic Leonov, and Nicola Caputo. “If we found six men that they were hiding in two hours, imagine how many men they are covering up for in those 3 million files,” Khanna said. (The Guardian)

• An annual meeting of the nation’s governors that has long served as a rare bipartisan gathering is unraveling. Oklahoma Gov. Kevin Stitt, a Republican who chairs the National Governors Association, told fellow governors in a letter on Monday that the White House intends to limit invitations to the association’s annual business meeting to Republican governors only; Democratic governors say if that’s the case, the won’t attend any of it. (AP)

• A British graduate ... was shot dead by her alcoholic father at his Texas home just hours after they had an argument about Donald Trump. ... Lucy Harrison, 23, was killed as she prepared to fly home on January 10, 2025, following a post-Christmas break accompanied by her boyfriend. … [A] grand jury found that no one should be prosecuted. Note: This is all over British media, and I can barely find it mentioned in the U.S. Maybe I’ve missed. The father said it was an accident. (Daily Mail)

• Britney Spears has sold the rights to her iconic music catalog. The Grammy winner released her shares to Primary Wave, a private music publishing company based in New York City, on Dec. 30, according to documents obtained by TMZ Tuesday. An insider told the outlet that the “landmark deal” was estimated to be in the same ballpark as the $200 million-dollar check Justin Bieber received when he sold his catalog in 2022. (NY Post)

• In an emotional interview after he earned the bronze medal in the men’s 20 km. biathlon at the Olympics, Norwegian Sturla Holm Lægreid surprised audiences with an unprompted personal confession. Three months ago, he said, he cheated on “the love of [his] life., the most beautiful and kindest person. ... I told her a week ago. And it’s been the worst week of my life. ... I had a gold medal in life, and there’s probably a lot of people out there who look at me differently now, but I only have eyes for her. Sports has taken a bit of a back seat these past couple of days. Yeah, I wish I could share this with her.” (NBC News)

Thanks for reading. Photo by Annie Spratt on Unsplash. I wrote about some of this before on Inc.com. See you in the comments.