SEC Filings Reveal Data Behind American’s Frequent Flyer Program

Last summer I wrote American Reveals its Frequent Flyer Program Data to the SEC: Here’s What We Learn.

American Airlines has consistently revealed key metrics for the AAdvantage frequent flyer program in their 10-K SEC filings. And that let me build a spreadsheet showing how many members of the program there are, how many miles outstanding and redeemed for a given year, and what percentage of miles were accrued through partners rather than from flying.

What we see in the numbers is that American has had success in printing miles, selling them to partners, but also redeeming them. And the number of miles outstanding really hasn’t grown especially quickly over the years. So there’s not a situation of ‘too many miles chasing too few seats’ though if anything at the moment it’s ‘too few seats’. Planes are full and saver awards harder to come by.

And I concluded,

But even with planes full, there’s hardly any sort of crisis by historical standards — and thus little need to upend the structure of the program the way that United and Delta have been doing to theirs.

Reader Hillrider just commented that the airline’s 2014 10-K filing is now available (.pdf).

[T]he new numbers are eye-popping (809.0b outstanding miles and 287.1b issued), but that’s because they’re reporting both AAdvantage and Dividend Miles together (since they were destined to be merged 1:1).

So you should probably add a new metrics to your spreadsheet, which is number of outstanding miles per units of ASM and number of issued miles per unit of RPMs — the trends would be very interesting to see (the latter would show by how much “too many miles” are chasing too little awards).

Other 10-K metrics of interest are the number of one-way redemptions (7.9m in 2014) and what is the % of total RPMs that are flown under award redemption (5.5% in 2014, massively down from 8.2% in 2013).

The most relevant data is on page 20 of the 10-K.

As of December 31, 2014, AAdvantage and Dividend Miles had approximately 809.0 billion outstanding award miles. During 2014, AAdvantage and Dividend Miles issued approximately 287.1 billion miles, of which approximately 61% were sold to program participants.

I didn’t see the total number of members included in the filing. I suspect that’s because they hadn’t fully de-duped the member files between the programs at the time of the filing. It should total somewhere around 100 million members.

I appreciate the prompt from Hillrider and heads up about the new 10-K. I’m not sure it makes sense to simply add the new numbers to the old chart, including US Airways Dividend Miles makes the numbers really incomparable to past data.

It’s also not really fair to look at outstanding miles per total seat miles operated by the airline, because it ignores partner flights (and American does add and remove partners, e.g. in recent years adding Etihad while breaking up with El Al) and indeed partner demand for American’s seats.

It does depend what question you’re trying to ask though. Indeed, I have little interest in redeeming American miles for American flights but it certainly matters as a metric for understanding the program as a whole since most people do redeem their miles that way.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. For me it looks like that we are still able to use nearly 200 billion miles / year successfully 😉

  2. 622B/74MM = ~8400 miles average per member in 2013

    I’d be more interested to know the average amount outstanding per “active” member…

  3. That was fast! 🙂 And thanks for the attribution.

    And I need to check for grammar before pressing send! 🙂

    The numbers indeed are not comparable, but it was also true that the 2013 numbers were not comparable to, for example, the 2007 ones. That’s why I hinted at using an index constructed as the ratio of miles outstanding to the airline’s available seat miles (ASMs), a measure of the “size” of the airline. This index will tell you if the number of miles is growing faster than the ability of the airline to provide transportation awards.

    In any case, thanks for providing the very useful spreadsheet to begin with!

  4. What would be most interesting is to see what share of miles belongs to each percentile of the members. In other words if the mileage 1% has grown. The people who have under 50k aren’t getting any outsized redemption values. It’s the high value accounts that would prompt a devaluation because they chase big awards.

  5. “I have little interest in redeeming American miles for American flights ”

    Out of interest, how would you redeem your AAdvantage miles for premium seats on TATL flights?

  6. The success in redemption cannot be assumed by the 10% growth in outstanding miles. I suspect that much of what is issued falls a breakage when they expire unused.

  7. I’d be interested to know how many “members” out of the supposed 100 million or so actually have points in their accounts. I suspect that a very small percentage of program members actually “own” a very large percentage of the outstanding miles available…

  8. @stripy: actually, Air Berlin doesn’t charge fuel surcharges and have plenty of flights via Düsseldorf and Berlin. Also, they have lie-flat seats in business (Iberia does not).

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