Is American about to Lose its Etihad Partnership to United? Redeem Miles Now.

There’s a great deal of discussion of a rumor that Etihad could sever ties with American Airlines and partner with United or even join Star Alliance instead.

I first covered these discussions over the summer but now it’s getting much broader attention.

Etihad already partners with Lufthansa and was even rumored to be taking an equity stake in the German anchor to the Star Alliance. They also have been codesharing with Star Alliance members Aegean, ANA, Air Canada, Asiana, Brussels Airlines, Lufthansa, SAS, SWISS, TAP Air Portugal, and Turkish.

I recall chatting with the head of Etihad Guest before he sat down to talk with the then-President of American AAdvantage at an event in New York before the two programs launched their partnership. It was an exciting moment. Since then Etihad redemptions have been my number one use of American AAdvantage miles because of good availability and a great product. Four of my five trips to the Maldives have been on Etihad. I’ve visited India, Dubai, and Australia flying Etihad.

Etihad is a once-great airline that’s been retrenching but still offers a wonderful product compared to what most US customers are used to.

It’s hard to blame Etihad if they’re looking for a new US partner. American terminated their codeshare with the airline to avoid looking like hypocrites while pushing for the US government to block the airline’s US flying. It was the ultimate ‘cut off your nose to spite your face’ move because Etihad was already retrenching, but it meant reducing American’s own access to the India and Pakistan markets. Meanwhile while United was a part of that campaign they’ve been less vocal, and their criticisms have been louder against Etihad’s cross-town rival Emirates since the Dubai-based airline flies from United’s Newark hub to both Milan and Athens.

Joining an alliance is a long, expensive process. It wouldn’t cost nearly as much as Etihad dumped into building their own reservations system for their once-sprawling equity alliance of airlines, but is the sort of investment one wonders if they’d be looking to make as they scale back spending. They could be betting that it would be transformative for the airline if they did.

Any alliance play would be a lengthy process, onboarding a new alliance member generally takes about a year and a half. They might just grow their partnerships with individual airlines like United. Either way if there’s any truth to the rumor we could see an end to the American-Etihad partnership right away, even if other airline partnerships take time to implement. Given the risks, if you have plans to use your American miles for Etihad travel it would be wise to make those bookings now with the caveat that if the American-Etihad partnership ends American is unlikely to be able to make changes to Etihad redemptions in the future.

Key implications for United and American:

  • American AAdvantage would suffer a huge blow. Etihad is one of the best uses of American miles, especially considering how tough it is to get premium cabin awards on Qantas and the extortionate fees levied on British Airways redemptions. There is little value or point in redeeming American miles for travel on American itself.

  • Obviously good for United MileagePlus. More partners are better, United’s award availability in long haul business class is poor but (technical issues booking awards on some partners notwithstanding) they have the most partners giving members the best shot at the best awards to most destinations around the world.

  • May not be as good for United as some would hope. Many of Etihad’s best award seats aren’t easily bookable with American miles today — you have to call the Australia or UK centers in order to book some inventory and search roundtrip awards originating in Abu Dhabi in order to find space departing the US. These are workarounds that shouldn’t exist. Would any new partnership implementation with United make these seats bookable?

Perhaps the most significant reason the rumor is believable (‘has truthiness’) is how poorly American has managed its partnerships over the last several years, getting outfoxed by Delta to give up their Qatar and Etihad codeshares while losing feed from India as Delta scooped up their Jet Airways relationship and even losing Mideast carrier Gulf Air as a partner. This management even walked away from partnering with El Al.

Here’s an important primer for booking Etihad awards using American miles. Just because American agents say award space isn’t available doesn’t mean you can’t book it!

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 »

More articles by Gary Leff »

Pingbacks

Comments

  1. “These are workarounds that shouldn’t exist. Would any new partnership implementation with United make these seats bookable?”

    Very important point!

  2. As someone with United miles and Chase UR points, this move would be great as it would give me more redemption options. If AA loses out, it would be just desserts .

  3. Channelling Doug Parker: Look, I like selling our miles to banks. What happens to them afterwards, I don’t care. I certainly don’t want to see any of you guys on my America West, sorry, I mean AA flights. I hate these sand dwellers who make our planes and service look bad in comparison; happy to have (almost) gotten rid of EY and QR. Give me a little more time, and I’ll get rid of those squinty eyed Asians too, I mean CX (it is easy to bad-mouth anything Chinese) and JL (I can always dig up some Pearl Harbor reference). That will transform OneWorld into an alliance of my dreams: AA selling miles to banks, BA collecting fuel surcharges from you clueless suckers!

  4. I’m with Luke on this — got a ton of Chase points that I thought I’d use on Korean. Would love to be able to use them on Etihad. The 5-day hold and 10% points back with Aviator are nice, though…

Leave a Reply

Your email address will not be published. Required fields are marked *