American Discloses That Percentage of Seats Redeemed With Miles Fell — Again

American used to share a ton of information about the financials of the AAdvantage program in their annual 10-K SEC filing. They stopped doing that last year. They no longer tell us how many members there are in the program, how many miles were issued, sold to third parties, and remain outstanding like they did up until two years ago.

Ironically when pressed about the value of the program by an airline analyst who claims it’s worth more than the airline itself American’s CEO Doug Parker said that the airline would be talking up the contribution of AAdvantage to the airline, they certainly haven’t done that in their 10-K.

Nonetheless as a result of their newly filed 2017 SEC 10-K form we know that in the 4 years leading up to the merger, 8.2% – 8.8% of American’s seats were filled by award passengers.

When US Airways management took over that immediately dropped to 5.5% in 2014. They clearly had a different philosophy about availability of award seats. The merger closed at the very end of 2013, and immediately in 2014 award travel on American Airlines dropped.

Although American said they recognized the need for better award availability at Investor and Media Day back in September the percentage of seats filled with mileage customers has been on a downward path over the last 3 years: 6.5% to 6.3% down to 6.1% in 2017. (For 2016 Delta reported 7.9% and United 7.7%.)

American believes that their new coach connecting award availability will turn this around. While hardly an aspirational vision for providing value to members, most people do redeem for coach travel and American’s various hubs create plenty of connecting opportunities.

As a result of the negative picture of award availability painted by their SEC filing, American was pretty forthcoming with some interesting statistics to make the case that — year-over-year comparisons notwithstanding — they’re headed towards “hav[ing] comparable availability to the other big U.S. network airlines.”

American shared a bunch of statistics with me about redemptions during the first month and a half of 2018 versus the same period of January 1 – February 15 in 2017.

  • “The percentage of passenger miles flown on award bookings has risen to 6.5 percent through Feb. 15, from 5.9 percent during the same period a year earlier” It’s more but pales in comparison to Southwest’s 13.8% of course.

  • “Europe bookings are up 84 percent so far this year (as of Feb. 15) compared to the same period in 2017”

  • Hawaii bookings are up 72 percent so far this year (as of Feb. 15) compared to the same period in 2017″

They provided a breakdown of premium and coach awards year-over-year. Here’s Europe awards for December 2016 and January 2017 versus December 2017 and January 2018 where their new approach has taken hold.

What’s interesting is that the new connecting availability is thus far coach-only, yet the needle appears to move somewhat on premium cabin awards.

And while no doubt they’re cherry picking a bit what they share, the percentage of seat miles to and from Hawaii is up from 9.1% in January 2017 to 11.9% in January 2018.

They’ve also increased the number of flight segments being booked on miles from 37,000 per day a year ago to 50,000 per day now. It’s not surprising a new philosophy emphasizing connecting availability will lead to more connecting segments booked.

Perhaps most interestingly this is the first time I can recall their sharing detail on saver versus AAnytime award bookings — saver awards are up from 16,000 segments a day to 31,000 per day, representing 63% of what’s booked (versus 43% a year ago).

To be fair this doesn’t mean that 63% of awards are being booked at the saver level because the average number of segments on a saver award is almost certainly greater than the average number of segments on an AAnytime award (since customers will choose the most direct routing when spending double or triple miles for their choice of flights, while they’ll accept more connections to save miles).

Ultimately while I wish American’s goal were more ambitious than merely doing as much or as little as what United and Delta do, it’s a start, and they believe they’re headed in that direction to hopefully reverse the year-over-year trends that we’ve seen in their 10-Ks since the merger.

This is crucial because AAdvantage contributes billions of dollars to American’s revenue, and the 10-K recognizes that it “faces significant and increasing competition from the loyalty programs offered by other travel companies, as well as from similar loyalty benefits offered by banks and other financial services companies.” They risk killing the golden goose.

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, 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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  1. They haven’t disclosed much the past few years because they know they’re driving AAdvantage into the ground. Really they need a Chief Strategist…they clearly don’t know what they’re doing otherwise.

  2. Interesting analysis Gary. thank you.
    Seems that AA is releasing more seats at saver level. Problem is, they often involve 2(or god forbid 3) stops domestically. Want one stop? Mileage goes up drastically. And god forbid they innovate rather than simply use Delta and/or United as base comparison?????
    And sometimes it seems as though AA wants to be an LCC instead of a legacy “competing”with UA and DAL. Their new 737’s seem to lean that way. Mixed message.
    In any event, Delta might not be Cathay but it beats American by miles(see what I did there?).

  3. One of the nicer benefits of being Alaska Gold member was preferred seating on American awards. I made three such bookings in the last half of 2017.

    That option ended 1/1/18 so another element of why fewer seats will be booked with miles.

  4. The eggs are golden, not the goose. Speaking of which, LAX-LHR availability is pretty much goose eggs in any cabin.

    I’ve stopped accumulating American miles until I burn most of what I have. I’m hoping for another award availability window like the one in October 2015 which allowed me to put the family in business class LAX-LHR-LAX for 100k miles each on any dates we wanted. That was epic.

  5. When the merger happened, the number of seats increased dramatically, and the new seats are of dramatically lower value. I wonder what percentage of reward-redeemers are savvy enough to know enough to realize that these seats are of lower point-to-value ratio.

  6. Gary said: “They risk killing the golden goose.” The problem with killing the golden goose, once dead, there is no way to revive it. Once people start thinking of miles as valueless, it is very difficult to get people to care about them again.

  7. Two months ago my daughter had availability to go with us to miami. So I tried to get one saver award seat from Boston to Miami. I have a better chance of winning the powerball. Instead I routed her through laguardia and Indianapolis in lousy business class on regional jets with an overnight in IND. C’mon American you are better than this…

  8. I was on the fence but this Lifetime Gold just paid cash for a Delta ticket after reading this. Doug Parker, GFU.

  9. “Once people start thinking of miles as valueless, it is very difficult to get people to care about them again” –> BINGO.

    Other Just Saying nailed my (non-business saavy) thoughts. When people (especially younger people, millennials) associate a product, company, etc with not being worth it or valueless, then they won’t bother, and it’s much more cost effective in my view for AAdvantage to be seen as valuable and worth acquiring miles (even if margins aren’t as high for AA) than for AAdvantage to be looked at as worthless program.

  10. AA will not do anything about this until they feel the $$$ pain the next time Citi has to renew their contract and dish out billions for their lower valued miles. Citi is not stupid and I’m sure they’re seeing a trend in their customers’ spending habits and probably in fewer new customer acquisitions. All of those miles that Citi is dishing out have been prepaid. Let’s see what happens when they run out.

  11. When they are talking about % of seats, does that mean only occupied seats, and excluding non-revs? Or is the denominator every single plane seat that flies?

  12. I really do think Americans computer systems is programed to give the user the worst possible combinations for award tickets. Many are three legs for a simple flight and just not worth it.
    I think American is loosing folks who now see the program as just not a value, this combined with a surcharge if not booked within a certain amount of time in the future and big fees based on airport.

  13. Apparently American doesn’t give a Rats As# about any of their customers and their relationships
    Its simple I’ve gone from a 100k a year flyer and a lifetime Platinum to 2 flights a year at best
    Problem solved and no more complaints from me
    Not that any of us were listened to anyway
    Parker destroyed near everything American did well in the past and even dropping their partner American Express came at a price with Amex opening superior lounges than American
    Even the brand standard is inferior.I avoid them at all costs and happy to pay more elsewhere

  14. Fix availability and AA’s loyalty program still will be inherently hamstrung by routing rules more mean-spirited than most of the competition. This is penny-wise and pound-foolish by the bushelful. Award miles have actually been bought and paid for, but they sure aren’t treated like cash revenue tickets. The approved award itineraries are often pretty ugly. What’s the return on investment of a loyalty program that makes enemies out of old customers?

  15. If you are intentionally collecting points on any airline credit card you are doing it wrong (AMEX/SPG/TYP/UR).

  16. I’m new to status and miles with AA. They’re the only good option for my personal travel routing, and I accumulated about 400,000 miles. Reading this blog and the comments the last couple months, I was afraid I’d never be able redeem miles for good or even ok value. But my first award search (for a companion) resulted in a fir45k transcon business class ticket RT on the only dates that worked for me. And its direct flights. I paid cash and booked her in first class with me. Did I hit the lottery? Or are things actually not that bad (in certain travel pockets).

  17. I broke up with AA this year, and it feels so good. Sadly, Dougie and his team could give a $hit. Valued customers spend more, that is not a secret, yet the airline industry in this country competes to see who can be $hittier. They need to think outside the box, hire someone who is familiar with the industry, but not in it.

    I do have to applaud AA for their investment in lounges. I also have seen a noticeable rise in international saver award space. Just this year I have booked premium travel on the following routes: SFO-MEL Qantas J, MEL-SIN Qantas F, HKG-LAX CX F. Oh wait, that is all partner availability. They still have a long way to go.

  18. I have learned over the past couple of years that it is futile to complain about the decline and other negative changes that have happened with AAdvantage.

    After many years as EXP, this year (2/1/2018) my status with AA precipitously dropped from EXP to no status with AA. This happened because I took only a few trips with AA and its alliance.

    For a few seconds I had a nostalgic reaction at seeing my demotion shown in my on-line AA account. However, I quickly realized that many other AA customers feel as I do and have also abandoned AA and have been similarly demoted on AA’s system.

    UA, the airline that had that awful litigation over its million-mile customers a few years ago is, once again, is my current carrier of choice. I earned lifetime status with UA years ago and my present experiences and choices with UA now far exceed what is available with AA.

    For years, AA was voted the number one frequent flier program and was considered the best of the three major U.S. carriers.

    In Gary’s article he stated “They risk killing the golden goose.” which is accurate, in my opinion. The bad signs of AA’s contempt for their loyal customers are already evident including the issues with Citibank and Barclay banks receiving a hit on AA credit card sponsoring.

  19. Shocking news! Provide little availability, make your own flights sky high and dump people in British Airways routes with their high tariffs. American is not happy until you are unhappy. American does not have my loyalty. It has my scorn.

  20. As a long time EXP and Lifetime Platinum with almost 6 million miles earned, I no longer play the “waiting” game for upgrades and when I see a list of 20 + people (for which on most flights there are only 16 seats into which to upgrade and are generally fully sold a day or two before the flight) I now purchase 1st class tickets. That said, I no longer have any loyalty to AA – I’ll fly whomever has the best fare and schedule.

  21. American Airlines does not have a clue regarding customer loyalty. The flights it offers in Business/First especially to Europe out of the mid-west have you connecting at some airport on the East coast, then having to transfer by bus or taxi to another airport…….bla,bla,bla. If you want to fly business, using miles it’s at a minimum of 100,00- per person and you get reasonable departure times, departure hubs. If however you do find seats in business at the 50,000 mile level the taxes /fuel surcharges or whatever else they tack on does not make it feasible and you may as well look at other resources.
    Have been a life time Platinum customer for the past 9 years after holding Exp for the previous 6 years, and have been a AAdvantage member since 1983. A classic example of how the reduction in first class domestic seats availability seems to be getting far worse for example is. I purchased twelve 500 mile awards fifteen month ago. Flying only four round trips a month I have yet to have any upgrade approved. Granted I’m only flying one round trip flight per week, you would sort of think I would get the occasional upgrade to first. Not so. Still have all the awards just sitting in my account collecting American dust. I have zero loyalty to American Airlines and when booking flights to the U.K. I first go to there web-site. Look at the frequent flyer miles they require for a R.T ticket to the U.K. Check there price of a R.T business ticket, then log out and choose another airline, or a brokerage company who specialize in discount business tickets and there is sometimes an extra connection to get to my destination,but it can save me a couple of thousand dollars compared to the R.T price of business/first on AA priced at anywhere between $6000.00 up to $9000.00

  22. I was a prolific user of my US Air Mileage Plus credit card, and 20,000 mile reward flights were plenty (home base PHL). Ever since the switch to AAdvantage, I’ve pretty much given up as flights are few and none are reasonably priced (mileage-wise), so I have completely stopped using my AA Aviator credit card, got a Venture card from CapOne and I’m using it and booking flights on a regular basis with my reward points. Laughably, usually on American at economy fare rates! But, yes, very disappointed with the AA program. Keep up the great blogging, very valuable to those of us who love to fly!

  23. My wife and I both bid farewell to AA. We are burning points when available and racking up new on Alaska. Alaska works for us and has an excellent product and mileage program. Not much penetration into the East Coast but I’d rather be loyal to a company that at least treats me like a human being.

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