What American’s New Frequent Flyer Changes Mean to Me — And To You

What Today’s Announcements Change in Our Understanding of AAdvantage

We’ve known that revenue-based mileage earning has been coming for some time. American announced that they were going to follow Delta’s and United’s model for earning miles from flight activity back in November. Now we know it starts August 1.

On average it’s bad for flyers, you need to spend more to break even mileage earning than you do under mileage-earning based on distance. American conceded to me in November that fewer miles would be earned under the new system than are earned today.

But the difference is somewhat marginal, a few percentage points overall (although a big redistribution of who is getting the miles). And remember that the majority of AAdvantage miles aren’t earned by flying.

A much bigger deal is that the miles that are earned are worth less after the March 22 devaluation. But for economy class flyers awards haven’t gone up much, if at all, and may even have gone down. So there are winners and losers there too.

What’s new here is copying United and Delta and minimum spending for elite status and a 75,000 mile upgrade tier, a new way to prioritize upgrades, and a modest benefit for top tier elites.

Minimum Spend for Status Will Help More Flyers Than It Hurts, What Will it Do For You?

American will require spending 12 cents a mile on average to earn elite status (or less if you fly more than the minimum miles for your elite tier). That’s not a high bar — remember that the break-even for the average member between earning redeemable miles based on distance versus fare is closer to 20 cents. The elite spending requirement is set well below the average fare.

American’s minimum spend for elite status will also be easier to hit than Delta’s and United’s, for those who have to hit it (we do not yet know what a co-brand credit card exemption will look like, and it will apply to non-US members as well as US members unlike at Delta/United where people just changed their address).

However there will be fewer elites than before — not just fewer elites than there are today, but slightly fewer than before American flooded their elite ranks starting 18 months ago by making it easier to earn status with premium cabin fares.


Legacy American Airlines Domestic First Class Airbus A319

So those who still earn status should have less competition for upgrades. And higher-spending elites will be prioritized for upgrades further.

How These Changes Affect Me

Since my own paid travel on American is mostly for work, I’m already at the required spend for the year if the rule was in place for 2016 (it doesn’t start until next year). And since I tend to buy tickets closer-in to travel, I wind up low in the upgrade priority because currently upgrades are ranked by time of request after elite status. Whomever buys their ticket earlier gets the better upgrade spot.

Although I don’t like these changes, they’ll actually benefit me — without even getting to complimentary upgrades on domestic award tickets. Those will be at the bottom of the upgrade queue for Executive Platinum members, but above 75,000 mile Platinums. It might further incentivize me to book awards for last minute personal travel when saver space is available.

Here’s Who Gets Hurt the Most

Today’s announced changes hurt low spending elite members, Platinum members who earn fewer than 75,000 qualifying miles a year, and lifetime elites.

American needed a 75,000 mile tier. No question this hurts Platinums that fly less than 75,000 miles since they’ll be below Platinum Pro members on the upgrade list. Platinums are already getting hurt the most with reduced mileage-earning on paid tickets. But United, Delta, and even Alaska offer 75,000 mile elite tiers. I was surprised American didn’t have one earlier.

The members who get hurt the most here are lifetime elites who aren’t heavy frequent flyers anymore. Platinum status is the highest lifetime elite tier, and instead of being second from the top it’ll be second from the bottom. Furthermore, since upgrades will be prioritized based on 12-month trailing spend (technically, elite qualifying dollars which is different than spend since it includes a mileage and fare class calculation for partner flights) lifetime elites who aren’t spending as much today will be at the bottom of the upgrade queue even within their status level.

This is a huge devaluation of lifetime loyalty, and a shift towards how much have you spent with me, lately?

Today’s Changes Mean AAdvantage Is More Like Everyone Else

Ultimately this isn’t “D-Day” for AAdvantage, or anything nearly so apocalyptic. It is, however, the day that AAdvantage changes were announced that make the program so much closer to what Delta and United were already offering.


American Airlines Airbus A321T at New York JFK

It was telling to me, when I asked what is left from American’s perspective that makes AAdvantage a better program than its competitors, the answer focused on improvements they’re making to the inflight product. But if customers are making a choice based on product, if you’re being fair, overall Delta’s is better. The reason to choose American the past 5 years has been the AAdvantage program.

But now AAdvantage follows Delta and United with:

  • Revenue-based mileage-earning
  • Minimum spend for elite status
  • Even smaller changes like a 75,000 mile elite tier and some version of upgrades on domestic award tickets

United offers better award availability than American does. Delta’s availability to Europe is better, too. American has systemwide upgrades from any fare, although fewer of them (matching Delta but with the ability to earn more through extra flying).

Your Choice of Airline Becomes More About Schedule and Price

The program itself becomes much less of a differentiator in whom you choose to fly. If you are hub-captive, you choose your hub carrier. If you’re based in Dallas, Miami, Philadelphia, or Charlotte you’re probably going to fly American. If you’re based in Atlanta or the Upper Midwest you’re probably going to fly Delta. If you’re in San Francisco, Denver, or Houston you’re likely to choose United.

But if you don’t live in a hub, or a hub that’s contested (or with multiple airports) like Los Angeles, New York, or Chicago, you have choices. Frequent flyer program is just less of a reason for you to make your choice than it used to be. Earning elite status still makes sense, I’m going to still fly American (they’re the largest legacy airline at my home airport of Austin and my number one destination Washington National).

The key I think is to figure out what these changes mean to you — whether they help you or hurt you, and if they hurt you then it’s a good time to revisit whom you fly. I’m sure there was a rush of requests to Alaska Airlines Mileage Plan for status matches today. Bear in mind that it’s unlikely that Alaska will continue to award full mileage based on distance flown for American flights into the future.

The airlines are moving to get you to pay for what you receive, and get only what you pay for. So that means choosing to buy the product you want to fly, from the airline that offers it at the best combination of schedule and price. The loyalty program becomes less of a determinant for buying a plane ticket.

For someone like me especially who is almost requalified for top tier already, I’m very much free to buy tickets from other airlines — and I’ve done so with both United and Southwest several times this year. No need to make extra stops, take less convenient times, or spend more to stay loyal. And that means American gets less business from me.

Nonetheless, I have more miles than ever before and they can still be used for fantastic things. I didn’t earn most of my miles from flying to begin with, and find these changes almost liberating in a way as I play the field.

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 Milepoint.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 it comes to revenue-based earning, you can’t beat Southwest’s effective rebate percentages. You don’t get aspirational redemption, but you do get easy, flexible, and zero-hassle redemption for advance-purchase domestic travel.

    Rapid Rewards is an essential component of a balanced portfolio of points and miles. So are Avios, whose strength is last-minute redemption for domestic AAward travel without AAditional fees.

  2. Will Platium still be the max level for Lifetime milers or can you now get to Platinum Pro?

  3. Correction: On average these changes bad for LOW FARE flyers and good for higher fare business travelers.

    Regarding “No need to make extra stops, take less convenient times, or spend more to stay loyal” – who does this anymore?? It never made sense to me unless you were a hair away from the next elite tier or some megabonus.

  4. Maybe I missed it, but how will they give credit for flights on partner airlines, like Cathay?

    Is that now no longer an option?

  5. Gary,

    Just to confirm, elite status through 2016 is still based on actual miles flown, not revenue, correct? So, for example on August 1, 2016, a $1,000 ticket would earn 11,000 award miles as EXP, but if you’re flying 20,000 actual miles, you would get 20,000 EQM toward elite status, right? The changes to elite status only kick in in 2017.

  6. @Craig for redeemable miles and elite qualify8ing miles it will be based on distance and fare class. for elite qualifying dollars it will be based on distance and fare class but with new charts they haven’t released yet.

  7. @Boraxo no, that’s not correct.

    1. On average they are worse, period. Fewer miles are being awarded overall.

    2. Some high fare travelers will earn more miles but you’d be surprised how often that’s not the case.

    3. Those miles are now worth less anymore, so increased earnings of a currency that isn’t worth as much isn’t a clear net positive.

  8. Wow an article where someone isn’t flipping a **** over the changes. There’s hope for the blogosphere after all. Good, fair, and balanced writing. Its refreshing to read a page not full of nonstop whining and complaining.

  9. As a BOS based flyer, I really want to make the jump to B6 – nonstops to everywhere, and a decent revenue-based rebate. But the lack of international partners is what stops me. I fly to SFO, SEA, SAN and DCA mostly, with about 4 London trips per year. Previously, I could connect in JFK or PHL and use my system-wide upgrades to fly business class to London, but since those are being cut in half, I’ve been more recently trying world-traveller plus on British Airways, which is generally fine, and not a ton more than economy. I’m not certain yet, but this may be the final straw sending me over to JetBlue…

  10. “The members who get hurt the most here are lifetime elites who aren’t heavy frequent flyers anymore. ” -Gary
    I made the million-mile level over a decade ago. An AAdvantage member since 1982 (sic!). Saw the handwriting on the wall a year ago with the announced devaluations. So… took my remaining miles and saw New Zealand, Japan and Puerto Rico — First Class. AA loses a loyal customer of 34 years but I get to keep all those memories.
    What have you done for me lately?? Less and less and less…

  11. My issue with AA is different. I am lifetime plat primarily from credit card spend and lots of bonuses(when you could earn it that way). I fly about 8 times per year almost all personal. I live in Chicago so I have great incentive to fly AA which goes almost everywhere non-stop. I have 700k+ AA miles plus about 1.3 million points between other airlines, hotels, ultimate rewards and Thankyou points. I have been in the hobby since about 1985. Kids and grandkids live in SEA, MIA, CLT and DCA.

    I frequently can book tickets at least 6 months in advance. For approximately the last 9 months it has been impossible to book any award ticket on AA at the saver rate and frequently not even at the “normal” anytime rate.

    I am now focusing on Thankyou points which convert at 1.6 cents per point on AA tickets, since between my status, free businessExtrAA upgrades (on longer flights) and my “free” Citi Prestige card it still makes sense to fly AA whenever the fare is within $50 of UA.

    The $450 Prestige card is “free” since I receive the Citigold $100 discount, $250 airfare credit, 3 rounds of golf and the 15% Citigold point bonus. Admirals club access and priority club give me free lounge access at almost any airport although some lounges may not be convenient.

    Anyone have any comments or better ideas?

  12. I wonder if my Citi AAdvantage Platinum card is worth renewing for the $95 fee. I have about 70k miles, an award ticket booked for later this year, and lots of miles in other currencies.

    I don’t fly very much and don’t see much reason to keep accruing AA miles. I only got the card for the miles.

  13. @md the reason to keep the card is for benefits like priority boarding and free checked bags. If those aren’t worth more than the annual fee to you, then just make sure you have enough activity in your AAdvantage account to keep your miles from expiring (activity every 18 months) and focus on cards that earn points which transfer to a variety of frequent flyer programs IMHO.

  14. Under the new scheme, if I buy tickets for my family members who will earn the miles, me or the traveler?

  15. I would think it also has a big impact on people that travel throughout the world on many OneWorld carriers, as presumably the minimum spend is with American, not with OneWorld. Also how would a ticket purchased on BA but flying on AA count towards minimum spend?

  16. Never mind on the last comment, I see your explanation on partner flights in your other post.

  17. This is going to be a mess…

    My typical travel pattern is to buy J tickets SJO/MGA-MIA-LAX (or HNL). These allow one free stop at the gateway (MIA) but the published fare is SJO-LAX (or HNL). I will often add a stopover on the return for $100 — figure that is “ancillary” revenue and won’t earn anything.

    But how will mileage credit? There is no “base fare” SJO-MIA. And I often use “nested” tickets – so my “stopover” in MIA may be for 3-8 WEEKS. Do I wait until I take the MIA-LAX (or MIA-DFW-HNL) leg(s)? What if my “stopover” spans calendar years?

    This is going to be a mess…

  18. Isn’t this a boom for Alaska Southwest and JetBlue? For those not near the top your not getting upgrades and the smaller Airlines points are probably more useful now. If we’re in a world of just buy best fare and flight times. And these three Airlines are just better customer service too.

  19. While the earnings are 1:1, it almost seems a no-brainer to credit to Alaska and gain loyalty there from AS,AA,DL. Redeemable miles are a significant rebate, and with only 4 SWUs the value proposition for AA top-tier loyalty seems suspect. Just what am I getting after 100k miles but in seat? Domestic upgrades are great if you can get them, but they also compel you to pay, versus using on 7500-mile awards (AA or BA). And one pair of RT upgrades? I can just generate miles elsewhere and then benefit from 24-hour stops, more exotic AA-partners, and only pay taxes to fly. Not to mention, I don’t have to avoid using AA GCs, which render a fare non-SWU-able. In conclusion, there are so many others ways to fly free, or for cheaper than AA, or to pay comparably and still get a more valuable rebate that the diminished loyalty rebate American is offering, which is simply not incentivizing. Great that AA is award business flyers, but those people just aren’t choosing their carrier, their job and their location is. I, however, was an addicted AAEP flyer, and I chose to fly them. Without the RDMs and SWUs, there’s just not much reason to.

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