Frequent flyer statistics: American AAdvantage is the largest frequent flyer program in the world — including US Airways members, they boast more than 100 million members.
At that scale, nearly all analysis can be done by the numbers, and fortunately American is more revealing about their numbers than most other carriers.
Airline filings with the SEC can be extremely enlightening if you’re willing to work through them. American’s filings provide quite a bit of detail about the number of members, how many miles were issued in a year, and how many miles remain outstanding (unexpired and unredeemed).
I had a look at annual 10-K filings from the beginning of 2008 through the beginning of 2014. Here’s what they show:
American has over 1000 mileage partners, between airlines, rental car companies, hotels, financial firms, survey sites, and everything else imaginable. And about two-thirds of miles are sold through these partners rather than award for actually flying American.
The classic problem with award redemption is ‘too many miles chasing too few seats’.
In 2004 I wrote that mileage prices will tend to rise, explaining miles as a foreign currency with no central bank or monetary authority outside of the program itself. Printing more miles requires either the number of available seats to go up, or the price of those seats to rise (or customers simply to be unable to redeem).
In the case of American it appears that the problem isn’t too many miles per se as much as it is too few seats — because the number of unredeemed outstanding miles really hasn’t been growing in a material way. The problem American and all US airlines face is that planes are full (a good problem to have) so fewer saver award seats available.
- Even so, award redemptions are up ~ 17% over four years.
- And during that time American has been able to grow its member file as well.
Total outstanding miles were up only 1.5% between 2007 and 2013. So even with all of the monster credit card bonuses that have come about, and all of the ways to manufacture miles at little to no cost, there hasn’t been a material impact on unredeemed miles (or on the total number of miles awarded by American in a given year).
What this means is that roughly speaking, American is printing and redeeming about 200 billion miles per year. Despite the challenges they’re already doing a pretty good job of balances mileage issuance and redemption.
If the economy falls and people stop traveling, or if airlines expand again, then awards become easier. It’s a mistake many of us make to compare the current state of award availability to 2009 through 2011, a time easier than any other over the past decade.
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.
(HT to Milecards for the prompt to write about American 10-K filings)