Two months ago I wrote that big changes will come to American AAdvantage… but not yet.
- The focus through October 17 (and ultimately beyond) is integration with US Airways.
- They’re running out the clock to make big changes for 2016.
The simple counterpoint to this is that American didn’t announce their 2015 program details until October 28, 2014.
Bare Minimum Notice is 90 Days
While the standard among US airline programs is to give more notice than this, it seems that the absolute bare minimum is at least 90 days (and for some changes much more).
American has said that 90% of tickets are purchased within 90 days of travel, that’s why they began the reservation system ‘drain down’ of US Airways on a 90 day schedule.
Now that we’re about 90 days from the new year you have a substantial number of members buying tickets that could earn fewer miles than expected. Legally speaking there’s little recourse, as Delta argued before the Supreme Court in Northwest v. Ginsburg once you’ve flown on an airline ticket you’ve gotten “full performance” and state contract law ‘cannot superimpose a duty of good faith and fair dealing’ on an airline loyalty program. Indeed, AAdvantage disclaimed any such obligation in a change to their terms and conditions six months ago. But their own standards for customer expectations — selling tickets and changes the rules — would lose any sense of reasonability. Ninety days’ notice should be the bare minimum to change how AAdvantage miles or elite qualify miles are earned.
The standard is giving much more notice when making fundamental changes to how earning and elite status work
When Delta announced it was imposing minimum spending requirements to earn elite status they gave a year’s notice.
When United announced their (same exact) minimum spending requirements to earn elite status they gave more than six months’ notice. [In fairness, they needed a few months to be sure they could copy Delta.]
When Delta announced revenue-based mileage earning (earn miles based on dollars spent, rather than distance flown) they gave 10 months’ notice.
When United announced revenue-based mileage earning, they gave more than six months’ notice.
The British Airways Earning Mistake Suggests We Aren’t About to Get Little-Notice Changes
Even the mistaken posting of new lower earning rates for British Airways and Iberia discount fares was telling. While it could have been an old plan that’s been superceded, it reduced earnings on discount fares but didn’t increase earning on premium fares… suggesting that American would keep in place their separate bonus earning structure on premium fares.
What’s more, American just reassured that making any changes to British Airways mileage-earning would be done with substantial notice.
Would the CFPB Go Along With Little-Notice Changes to American’s Elite Program?
At least as far as elite mileage-earning goes, there could be legal problems making big changes without notice — not under state contract law (which is pretty much blocked by Northwest v. Ginsberg)) but as a result of American’s relationships with Citibank and Barclays.
Both banks issue co-brand credit cards that market the ability to earn a certain portion of one’s elite status via spend on their card products. Both banks charge higher annual fees for the cards offering that benefit.
The Consumer Financial Protection Bureau would certainly see credit card marketing complaints if the benefits of those cards became materially less valuable (if you could no longer earn 40% the way towards Gold and 10% the way towards top tier Executive Platinum) during the same cardmember year that consumers had paid big fees for the privilege. Changes to benefits provided by card companies need to be made with great care and notice.
AAdvantage Would Be Wise to Wait on Big Changes
It’s too late to push wholesale changes to the AAdvantage program for the 2016 program year in any reasonable way.
If they did so, they’d be breaking with even the convention that Delta has followed. They would be changing earning of miles or elite status after customers had begun buying tickets for the new year, based on American’s own talking points — tickets purchased with the expectation of published benefits they would receive.
It may have made sense for Delta to reduce their marketing spend, reduce the generosity of the SkyMiles program, with planes full and prices high over the last couple of years. The US Airways merger meant that American didn’t quickly follow suit. But now the terrain has changed, and loyalty programs matter more to fill seats as revenue is falling in the face of greater competition and lower fuel prices. American would be wise both from a customer commitment and from a business standpoint not to try to roll out major changes to how miles and elite status are earned in 2016 now that we’re entering the final quarter of 2015.