21 June 2000

Some five million members of American Airlines’ frequent flyer loyalty program are set to gain tens of millions of dollars in fare discounts and extra miles if - as seems probable - two class action lawsuits are settled out-of-court.

The plaintiffs allege that the carrier improperly changed the terms of its AAdvantage frequent-flier incentive scheme. By making the changes, they charge, American broke an alleged contract with program members, also injuring their interests by retrospectively reducing the value of previous miles earned.

"Essentially, these cases were about changing the rules in midstream," claims Gilbert W. Gordon, lead counsel for the plaintiffs. American denies it breached any contract and maintains it was allowed to make the change under terms of the program.

Although American makes no admission of liability, it has decided to settle: "We simply felt that the time had come to settle these issues," said an AA spoke. The AAdvantage program currently has around 35 million members.

News source: Wall Street Journal