Do AAdvantage Program Changes Matter? It’s the Unknown Shoes to Drop that Should Worry

We know something about the direction American will be going with the AAdvantage program:

  • Bonus qualifying miles for elite status when paying premium fares (no penalty for cheap fares)
  • No minimum spend requirement for status
  • Top tier elites get 4 confirmed upgrades from any fare
  • Revenue-based mileage earning from flights, similar to United and Delta, starting in a year

There are still likely changes to come:

As an American Executive Platinum, these changes will hurt a little. I’ll probably earn a few less miles, though not a lot, and of course I earn miles through many mechanisms other than flying. So it doesn’t make a huge difference for me in terms of my overall miles earning. I have too many American miles anyway, especially now that my US Airways miles have been combined into my AAdvantage account. I’ll also earn fewer confirmed international upgrades, although hopefully my flying patterns will be enough to earn 6.

Contra American’s internal narrative this does not make the program better for high value customers, but they are right that overall it doesn’t make the program worse than competitors. With these changes to ‘better align benefits with customer value’ they do not actually do anything to improve things for high value customers. There will be a small subset of customers who earn more miles (although I still have to believe we’ll see changes that make those miles worth less). But the real problem with the program is award and confirmed upgrade availability, and extortionate fuel surcharges (with the price of fuel low!) on their primary transatlantic partner British Airways.

On the redemption side, as of now United remains the best program for burning miles for business class to Europe or Asia. United also remains the best program for spending extra miles to get most any economy seat (only elites and co-brand cardholders get last seat availability, though pricing is most reasonable in this category). American remains the best program for burning miles for international first class. Delta remains the best program for burning large numbers of miles at very low value.

I still think American’s 500 mile upgrade certificate system is better for Golds (25,000 mile flyers) than complimentary unlimited upgrades for all elites at Dlta and United. It means that Golds don’t compete against every other Gold and every Platinum every time, making actually clearing the upgrade when it’s requested more likely.

And for me as an Executive Platinum – until and unless this is changed – American has a far better domestic upgrade program than either United or Delta.

  • United and Delta prioritize full fare over elite status for upgrades.
  • So a silver on a full fare ticket trumps a 100,000+ mile flyer.

United also places their revenue-based top tier Global Services members over 100,000 mile flyers for upgrades.

As long as American doesn’t change their upgrade priority, AAdvantage remains a win for me as a top tier elite.

American has no 75,000 mile tier. Location aside – since one’s city often determines one’s choice of airline – a 75,000 mile flyer, especially on high fares, may be best off with United. American’s systemwide upgrades presumably will still have no minimum fare requirement, while United’s require buying a more expensive ticket in order to be eligible to waitlist for the upgrade. And of course United doesn’t upgrade the extra money you spend for the upgrade lottery ticket when the upgrade doesn’t clear.

Ultimately this leaves Alaska Airlines Mileage Plan alone as the best all-around airline loyalty program in the United States, in my opinion. How long Alaska stays that way is anyone’s guess of course but hopefully Delta’s onslaught on Seattle and their view that a quality frequent flyer program differentiates them from Delta and other competitors will be a reason to keep it that way. Of course Alaska doesn’t have the international route network (or domestic route network!) and confirmed international upgrades to make them a viable alternative for customers throughout much of the U.S.

For those customers outside of Alaska Airlines hubs and focus cities, or who fly international and wish to upgrades, they’re left with American, United, and Delta. And until more shoes drop American’s frequent flyer program still looks more attractive to me that United’s or Delta’s. Just less so. And with more areas of AAdvantage potentially changing, that could easily change. And with United’s overall indications that they’d like to actually be flyer friendly and not just just say so, they could face competition.

After all, AAdvantage finds itself cutting value to flyers (even incrementally) at a time when competition is heating up in the industry. Fares are falling. That’s when you need to rely on your marketing engine more than before. United and Delta made cuts to their program at a time when they thought they didn’t need to spend dollars to fill incremental seats on planes. American finds itself doing so precisely at the moment that they need to. We may even be entering the kind of period where consumer pushback against changes has actually worked before.

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. When did they announce theyre going to go revenue based in a year?

    I have dumped the others and stuck with American exclusively so I can get full mileage credit on my monthly flights. However if they go revenue based i’ll take Jetblue nonstops on many of my routes as it has a better product and now there’s no Aadvantage not to.

  2. “Delta remains the best program for burning large numbers of miles at very low value.”

    Ok, this made me chuckle. Hard. But Dougie will likely have the last laugh.

  3. Hopefully they’re reading. I expect I’ll be done crediting miles to AA late next year when they go to revenue based earn. And really, to make changes to 2016 qualification at this stage is dirty pool. I already have two J long-hauls booked for 2016 – I’ll be fine, as it happens, but it leaves a bad taste in my mouth. I do not trust this management team. Not even to make *good* decisions, to say nothing of decisions with which I agree.
    On the plus side, I had an edible meal in J on AA yesterday for the first time in quite a while. So there’s that.

  4. Yes, this is worrisome.

    They don’t have the operational reputation to stand up to Delta to lure business passengers, though. And United is still strong on its own, as you noted.

    American needs to compete – that is, not to change. Staying the same would be the boldest competitive move. I’m disappointed that they may try to follow the (increasingly small) pack.

    Alaska is looking better than ever.

  5. I don’t understand “On the redemption side, as of now United remains the best program for burning miles for business class to Europe or Asia”.
    How does burning 70,000 United miles in business class to Asia beat AA’s 55,000 miles flying Cathay Pacific to Asia?
    On a separate note, I read Doctor of Credit yesterday saying there was no change to the redemption options (pricing) for the American Award chart. He has been strangely quiet on it since.

  6. @fathiss there has been no change to redemptions at this point. I am not saying United has the cheapest award chart, but Star Alliance availability for business class Europe/Asia is much better.

  7. I to am concerned about what we don’t know. The way I see it the upcoming Executive Platinum will be downgraded in a year to about the current Platinum plus 4 SWU’S. I figure a typical Ex Plat in a year will earn about the same RDM as a Platinum today would earn and swus too.

  8. Sorry to duplicate post, but what I said didn’t make sense. Should have not posted from my phone.

    What I meant was a typical 100K mile flyer Ex Plat in a year spending $10,000 would earn about 100K miles and 4 SWU’s.

    Similarily, a Plat flyer today flying 100K miles spending $10,000 would earn 100K +100K and you could convert that to 100K miles and 100K miles which equals about 4 SWU’s

    That is what I was trying to say. So in summary a international Ex Plat of tomorrow is like a Plat of today.

  9. I’m currently an AA Platinum and just made it for Platinum next year but am really bummed about going from 100% bonus miles to 60% bonus miles. I recently signed up for Alaska FF program but haven’t used them yet and don’t know a lot about them. Does anyone know if I might be better going for Alaska status going forward over Aadvantage?

  10. While EXP doesn’t get hurt too badly and Gold doesn’t get hurt too badly, Plat gets royally screwed. I just qualified for Plat again for next year and I’m questioning if I should switch now to DL or wait until later in 2016. Unless they do something to reverse how badly Plat netted out……

  11. Re: United – they’re also the best program for J and F availability to South America. There haven’t been sAAver awards to SA on AA or LATAM since 2013. They may have a lot of capacity, but only at ridiculous AAnytime prices. Similarly, C inventory to SA doesn’t exist. I’ve actually been on two flights from SA that went out with empty seats in J without ever going C1 – while I had SWUs waitlisted. I still find value in AA miles, but not for that region – even within the region, I’m batting precisely 0.00 on LATAM J or F availability since 2012. And given United’s much better last-seat pricing, I value UA miles at more than double AA miles for my travel patterns.

  12. As much as I love taking advantage of arbitrage opportunities of frequent flier programs, it looks like they are quickly going away, as we’ve all expected would happen for a while now. One reaction is to kick and scream and whine about how the airline is going down the tubes and will regret their decision one day. My gut instinct is to do just that.

    But I then pause and wonder if these changes really aren’t so bad… IF the FF changes also come with a couple other changes. If airlines take away value we used to get from the FF program and instead invest most of that into better product and possibly lower fares, is that such a bad thing?

    For example, today I spend a lot of time and energy trying to figure out how I can buy a Y seat on an SFO-JFK transcon and get upgraded to J. Lots of plotting, scheming, checking, analyzing, and praying that my strategy pans out. I wish I didn’t have to invest all that energy into getting an upgrade… what if, instead, I could just pay a reasonable fare for J? I’m happy with a $500 Y ticket on that route, but paying $2,500 or more for J isn’t very realistic. But if it’s $1,500 or so for J, then maybe I can pay that. Especially if AA has a good product that seems worth paying for (like their new A321T). I think jetBlue has figured out that plenty of people will pay $1,200+ for a good J transcon product, so why can’t AA and others do the same? jetBlue does have a loyalty program, but I think it’s mostly an afterthought and somewhat similar to where AA, DL, and UA are going.

    When AA/BA recently had that big sale on US-Europe J class tix for around $2,000, tons of people bought them. It was so nice to pay a reasonable fare for J and not have to spend countless hours trying to figure out how to buy Y and then upgrade to J. It could be nice if that’s just how it works for all premium seats going forward.

  13. I’ve already qualified for Platinum for 2016, so will I continue to see the same benefits through 2016, and from 2017 the new system of benefits will be implemented? IE. Will I still get the 100 % bonus miles as a Platinum throughout 2016 ?

  14. @Cody I would have thought so, but revenue-based earn has been talked about for ‘late 2016’ (although there’s some doubt they can implement in time and some at AA seem to think 2017 is more likely)

  15. Gary, you made the comment that fares are falling. That may be true in the larger markets but coming from someone located with a regional airport I don’t find that to be the case at all.

    Not long ago, I could get from my small market airport in Florida to NYC for a little over $200 and to the west coast for around $350.

    Now that US Air is no more, we are only served by Delta and American. As a result, prices have risen dramatically. To NYC it’s now approximately $350 and to the west coast it’s anywhere between $450 to $550.

    The lack of competition has severely hurt the consumers who fly out of the smaller regional airports.

    There actually used to be 4-5 airlines serving our small airport many years ago. Now there are just two. The mergers have really stung us hard. So I’m sure prices may be dropping somewhere, but not here.

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