The frequent fliers who flew too much tells about travelers exploited the loopholes in the American Airlines unlimited AAirpass program. Although they paid $350,000 for the pass, they took advantage to garner millions of miles. Now the program is under review because it’s costing AA millions of dollars in revenue. “Rothstein, Vroom and other AAirpass holders had long been treated like royalty. Now they were targets of an investigation,” wrote Ken Bessinger of Los Angeles Times.
The AAirpass went on sale in 1981. The airline began investigating the frequent flyer program in 2007. Would it have made a difference on the company’s finances had it stopped the program soon after seeing the abuses? “It soon became apparent that the public was smarter than we were,” said Bob Crandall, CEO of AA from 1985 to 1998. “Soon” sounded like the airline recognized the problem early on.
One of the customers mentioned in the frequent flyer story bought his AAirpass in 1987. Six years after the program went into effect. If AA saw these problems soon after, why didn’t it stop offering it before 1987?
The New Deal
Sometime in the ’90s, I read a story about repealing Franklin D. Roosevelt’s New Deal programs because they no longer had value or applied. I tried to find something about that and the best I found was a Kansas Free Press story on how the New Deal doesn’t work in modern times. With new processes and technologies, old government programs become obsolete. Yet, some keep on churning and wasting millions of dollars that could be use elsewhere.
That’s what happens when doing business as usual without a checkup. Check ups also work for other areas in a business. For example, my manager and I led a weekly meeting with all the managers of a department. After my manager left and my team changed its direction, we stopped the meetings. Some keep on meeting without realizing they’ve strayed from the original purpose.
Phone Plans and Web Hosts
My husband took on a project that involved reviewing employees’ phone plans. He found that one traveler racked up big phone bills because his plan charged high rates for making calls in the countries he visited. Switching plans saved the company a few thousand dollars a year — all on one employee. After reviewing all the plans and making the changes, the company saw huge savings.
A review of your contracts and services is also worth your team, even for a one-person business. I signed up for my first meryl.net web host at $29.95 per month. That price was the norm at the time when there weren’t many choices. I had problems with the hosting and the customer service. Despite the effort it would take to move the website, it was worth shopping around for another web host. I signed up with a host that cost $12.95 per month. And it came with a bonus: fast, dependable customer service. They went out of their way to help with problems they could’ve easily said, “We don’t do that.”
Their service didn’t stop there. As a webmaster for several nonprofit websites, I came across another high quality web host that offered the same features mine did and for less. I contacted my web host to see about meeting the price. They did. I also signed up with the web host for one of my nonprofit organizations.
What other areas should undergo a check up in a business? Does your company conduct check ups? What results has it seen from the check ups?