When Will American AAdvantage Go Revenue-Based?

American announced in the Fall that they’ll start awarding miles for flights based on price of ticket rather than distance flown in “late 2016.”

There will be a cap of 75,000 miles earned per ticket — the same as Delta and United — so for expensive premium cabin tickets it will be desirable to book two one-ways rather than a roundtrip.

When the change first leaked I looked at how it would affect mileage-earning.

Expensive short trips earn more than they do now. Long trips even at reasonably high fares will earn fewer miles. Overall American claims that they’ll award fewer miles for flying than they do now — but the same number that they were awarding prior to implementing premium fare bonuses. (For this to be true AAdvantage members must on average be spending about 20% more on their tickets than non-members — although ticket prices have been falling.)


American Airlines Airbus A321T at New York JFK

Though we were originally told changes would come in late 2016, there have also been references to “the second half of 2016” which is the language American used in its most recent SEC form 10-K filing. That’s got members worried. One of the most frequent questions I get is when this change will happen, with customers even booking away from American now on the fear that it could happen July 1 (which is, of course, in “the second half” of the year).

I do not expect a change July 1. American announced in late 2015 that we’d see changes in late 2016, but not a specific date for the change, because at that time they did not know when they’d do it. It requires significant changes in IT to make happen, followed by testing. And IT is hard.

What I’ve been told this week is that American isn’t prepared to share a date certain at this point, but that they will provide a couple of months’ notice before the change goes into effect. They do not view the statement back in November that it would happen later this year as ‘the notice’ that they need to give to members (as some commenters have speculated).

  • we still don’t know when
  • it’s not about to happen
  • we’ll get notice before it does.

    Update: After I scheduled this post One Mile at a Time addressed the question and suggests you should plan for July 1 though he thinks August or September is more likely. At this point I wouldn’t be planning for July 1.

It’s worth remembering that, while there will be some change in mileage accrual from flying with AAdvantage, that about two thirds of AAdvantage miles are earned from things other than flying American.

And contra American Airlines President Scott Kirby’s comments in earnings calls about changes to American AAdvantage driving higher revenue, Delta doesn’t believe revenue-based changes to SkyMiles are a contributor to higher revenue. At least Alaska Airlines Mileage Plan isn’t going revenue-based soon.

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. My bad, I thought American had told you no earlier than 10/1.

    Fares are dropping now, a good thing. But with fares being so competitive, and Alaska holding out, do you think they might delay till 2017?

  2. AA really wants to have their cake and eat it too. AAdvantage is pretty much useless for redemption at any “saver” level. I was Exp for 10 years with 2 + million miles butt in seat – now I buy tickets on the airline that has the best price/product.

    AA’s loyalty program is useless to me; my loyalty to AA is now gone.

  3. @Gary
    Hi Gary
    Iemailed a week ago AA to try and get an answer and they called me 2 days later
    First to tell me that they don’t know the exact date, and then I asked if I buy a ticket now to fly in october will the current rules apply, and initially she said yes, but then she emailed me and told me the rules at FLYING time will apply and so I told her there is no use in being loyal to AA anymore and going forward will decide by schedule and price
    I have been PLA or EXPLA with AA for the last 10 years….this is a painful event for me
    We then got into a conversation where she was trying to pull examples where the new rules will be more beneficial, and after me basically proving ehr wrong she realized the only people who will be better off are those flying once a week to destinations under 1000 miles apart and buying last minute, which should account for 0.00001 of the pla and expla base….
    she hinted that they are listening to their members and in theory it is possible they will take a step back, but I doubt they will
    I gave her the example of NEW COKE decades ago and how coca cola backtarcked and used it to their advantage, but I seriously doubt the suits in Dallas give a damn

  4. there’s a fairly credible post over on FT that says 1 Oct and that American will give one-month notice.

    I can’t imagine actually changing ticket purchasing behavior because of this. RDMs are pretty irrelevant as a “buy” motivator for me. But to each his own.

  5. @Bob
    Hi Bob
    I think it is a motivator
    Take my case as example
    I fly to south america 4 times a year from Canada, and as PLA i get about 30,000 RDM on each flight (15 bas + 15 bonus)
    I by my tickets way in advance and never paid more than 1400 usd (I paid as low as 800)
    Under new system I will be lucky if I get 10000 RDM total per flight, meaning I am 80k RDM short per year, so without that incentive, my loyalty is gone and will probably choose by price and/or schedule
    I may stick to American but crediting miles to Alaska as it seems they are not changing the earning rules for AA

  6. Why they don’t just announce it goes into effect Jan 1 of next year is beyond me. Why create uncertainty for your customers?

    Also get rid of the 75k max rule.

    Finally, AA’s metrics they have on their website, currently, to track how many miles you earned (EQM and PQM) is quite frankly terrible/nonexistent. They could really take a page from UA’s book on updating that aspect of their website.

  7. @Mike.

    Agree, I also don’t see the IT issue here – it’s just simple math. Can’t understand why AA is stalling on an implementation date.

  8. The day this changes will be my last flight on AA except for award flights for non-flying miles earned, after 40 years of flying AA regularly – and more recently monthly after UA and Delta made the decision that made them dead to me.

    You simply cannot rip off customers who were getting 2500 miles on a cross country ticket (my most common) and expect them to tolerate 600 miles instead. This is showing us the door.

    My fondest hope is that when they’re scraping for customers again they will start bidding up the 5 miles per dollar in a bidding war that will put the customers back in their seats. Until then I go with mileage based and when it goes away I go with best miles per dollar.

    Thanks, Gary, for advocating for us on this. Sad that those affected most wouldn’t let their outrage be felt. United claims they heard no complaints, while Delta was arrogant about it and said “take it or leave it.” Dead to me.

  9. I started flying AA a lot after UA went revenue based. It’s been a rocky ride riddled with horrible regional operations and mechanical delays on mainline. The minute AA goes revenue based, they become the carrier of last resort. I’ll fly them if they’re dirt cheap. DL and even UA run a better operation in my experience so lowest price will be the only reason to fly AA going forward. YMMV

  10. @greg@tom
    both of you put it in the simplest most clear way and are 100% right
    @greg your most common is cross country going down from 2500 to 600…imagine what I feel when my most common goes from 30,000 RT to 10,000 RT …multiplied by 4 or 5 times a year…
    I wish someone puts up the website http://www.wearenotflyingamericananymore.com where all the PLA and EXPLA can register their opinion, together with their annual spend and/or mileage, and commit not to fly AA anymore
    I know that for me it is status match in december from UA and (sadly) DL and bye bye AA (will miss DFW connections…great airport) hopefully IAH is pleasant….

  11. I fly to Asia in business class monthly. My tickets cost between $4000-$7000. I can’t wait till they move to revenue based.

  12. Hi Gary,

    So in a nutshell, if I do the math, and am seeking to requalify EXP – to reach 100,000 points:

    I take 100,000 points ÷ 11 (I am current EXP) and would expect to pay about $9090 for the year in flights?

    Just trying to understand. Thanks! 🙂

  13. @Ryan Seacrust you will be one of the handful of people earning more miles, but don’t forget that those miles are worth less

  14. Since DL and UA went this way it was inevitable. The winners will be those who work for companies that purchase last-minute and premium class tickets. Those that boast about how great this change will be come from this category of flier…they don’t pay for their own tickets. (And in the end are actually subsidized by the average taxpayer since their employer can deduct the cost of those premium tickets from revenue and thus taxes.) The diminishing ranks of FFers of early days (FT and MP posters) still pay for their own tickets and are very price-conscious. Many of them will keep flying, and have always considered their elite benefits somewhat more important than RDMs, though RDMs were their ROI allowing for those long-hauls in F on exotic carriers like CX, SQ et al. The double whammy has been not only the pending decrease in RDM earnings but the recent boost to redemption rates for premium cabins. Alas, we will have our memories of the really good old days…at least for a while longer.

  15. @ryan seacrap
    it is surprising that your employer pays so much money for you to fly, when you can’t even do basic math
    don’t know where you are flying from and to currently but USA to ASIA under current system being an executive platinum can give you anywhere between 40,000 and 60,000 total miles
    Under the new system, taking your average ticket price of 5500 usd, you will earn 60,500 total miles on average, so sometimes you will be worse off and sometimes you will be better off
    but as gary says, this new system comes with other devaluations, and don’t forget now you will get 4 upgrades instead of 8, so next time you take your secretary to cancun or other mass market destination for a weekend, you may not be able to upgrade her
    before you rub in you should at least do basic math

  16. The math is simple:

    LAX-NRT RT 27k RDM (1.5x + ExPlat bonus) plus 7k or 24k current long haul bonus, so 34k – 51k RDM total under current system depending on fare bucket.

    44k – 75k RDM under new system.

    My question is do you know statistics? Because unless the fare distribution curve skews towards the right, then obviously I earn more under the new system. We should just assume it’s a normal disbursing for simplicity’s sake.

    As for miles being worth less, well that’s something neither you nor I could change. What we could change is how much we earn and I am a champion of the new system.

  17. Also if it skews towards the right, then it is also safe to assume they’d fall into the discounted business fare bucket, thus earning only the low end of 34k RDM, still significantly fewer miles than what would be earned under the new system.

  18. @ryan
    But you dont understand that the new system is a package of actions and even if you will be ahead on some aspect sometimes, you will always loose on the other aspects, which is less SWU and less value on your miles so OVERALL even you still loose and needless to say that this is not about the very few that think they will come ahead, its about the vast majority of PLA and EXPLA that are being screwed

  19. The only real benefit of EXP for me is the free unlimited changes to award tickets. I’m just going to travel when I can get discounted business class…or use miles. I hate the idea of hoping for an upgrade at the airport.
    I don’t see the fewer miles from going revenue-based as being nearly as big a deal as the points from credit cards.
    Gary thinks we are headed toward a time when there will be no credit card miles because of reduced interchange fees.
    I guess my plan then is to buy miles.

    However, I have thought about buying multiple Star Alliance RTW tix departing from the cities where currency changes have made the tix cheaper. I don’t know if that’s still the case, but it’s an idea I’d consider. Buy these RTW’s at different times and you’d likely get the flights you want more cheaply than buying miles.
    Am I way off on this idea? ie any wackier than usual?

  20. Well, well, well. There we have it. So it’s about the haves and have nots. The mass vs the 1%. Well, so long, losers!

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