With British Airways gutting their program — eliminating the principle that one mile flown earns one mile, reducing mid-tier elite mileage bonuses, and substantially increasing the cost of premium cabin award travel — I’ve had several questions about what this means for American AAdvantage frequent flyers since the two airlines aren’t just alliance members but are actually revenue-sharing joint venture partners across the Atlantic.
When American and British Airways introduced the transatlantic joint venture in 2010 there was some frequent flyer program alignment.
- That is when American introduced US – London awards on British Airways (those has previously not been permitted with AAdvantage miles, so you had to fly from Canada, Mexico, or the Caribbean) but fuel surcharges started to apply on all BA awards. Previously American didn’t add fuel surcharges to those British Airways awards that you could book, such as Toronto – London – Johannesburg.
- It’s also when mileage upgrades across joint venture airlines was introduced (using miles to upgrade on American, British Airways and Iberia).
- British Airways introduced full mileage earning on all fares (the principle that ‘one mile equals one mile’), and they introduced three regular elite tiers up from the previous two. Mid-tier status earned a 100% bonus on flights, just like at American.
So there has been some coordination here between the two airlines. And many of the changes announced yesterday represent a rollback of precisely the things BA implemented when the joint venture launched.
American is focusing on rewarding premium travel (in their own way) this year too as a competitive response to United and to Delta.
This doesn’t mean the programs move in lock step. They don’t.
And we shouldn’t expect big change right away at American as they focus on integration. We’ve heard little other than the mantra ‘integrate before we innovate.’
Nonetheless as fewer programs remain that haven’t devalued, it’s hardly comforting.
- We shouldn’t expect changes at American right away. American has shared details of their 2015 program and told us not to expect other big changes in the immediate-term.
- American and British Airways already had substantially different programs, with BA charging for awards base don distance and American based on region, and with thoroughly different elite benefits.
- I don’t see the BA move as predictive of American, however a fundamental operating principle I’ve subscribed to is that the best values – those that are several standard deviations better than the norm – don’t last.
- In my view, American overall (top tier elite status, first class class, indeed most awards other than transatlantic business class) offers the most valuable airline program.
- Thus there’s more downside risk to members than upside benefit, playing the probabilities.
My advice continues to remain to focus on American, that’s what I’m doing. There’s no reason to focus on earning less value now (with another carrier) and for the near-term simply because one would earn less value in the future. That American might not continue to be materially better in the future isn’t a reason to walk away from superior value now.
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