American makes changes to its frequent flier program
04/08/2014 7:38 AM
04/08/2014 1:00 PM
Using frequent flier miles to book a last-minute American Airlines flight for a holiday weekend got a little more expensive on Tuesday.
The Fort Worth-based carrier announced changes to its redemption rates and checked baggage policies for its AAdvantage program and US Airways’ Dividend Miles customers as part of its efforts to integrate the two carriers. The changes will affect more than 110 million members of the two loyalty programs.
“Ultimately, what we’re seeking to do is really streamline the customer experience by aligning our policies and procedures and elements of our awards programs so when customers are flying on either carrier they are getting a more consistent experience,” said Suzanne Rubin, president of the AAdvantage Loyalty Program.
American, which merged with US Airways in December, said that starting today AAdvantage members will be able get one-way “AAnytime” tickets for flights starting on June 1 by redeeming 20,000 miles instead of the previously required 25,000 miles. For last-minute seats, American will charge 30,000 miles for a one-way ticket and on the busiest travel days, such as the holidays, it will cost members 50,000 miles for a one-way ticket.
There are no changes to AAdvantage’s MileSAAver tickets, which require 12,500 for a one-way ticket and are not available on all flights and have certain restrictions. Dividend Miles members will be able to book last-minute seats without any blackout dates, the carrier said.
Industry analysts said the changes harmonize the two programs better and show management is picking and choosing various aspects of each program instead of simply migrating customers over to one loyalty program.
However, they said the modifications announced Tuesday are not as revolutionary as the changes Southwest Airlines and Delta Air Lines have made to their frequent flier programs recently that reward customers based on how much they have spent with the carrier instead of miles flown. At least not yet.
“While American stopped well short of converting its program to a revenue-based model similar to Delta’s, we believe such a change likely lies ahead — possibly by year-end,” said Jamie Baker, an analyst with JPMorgan, in a research note to investors.
Rubin said the carrier is evaluating industry trends for loyalty programs but is focused on integrating the two programs first.
Frequent fliers, who were not given any advance notice about the changes, grumbled on loyalty program forums about them. Some complained about the increase in the AAnytime redemption policy, saying the new 30,000 and 50,000-mile requirements seemed arbitrary.
The carrier also eliminated its Oneworld Explorer awards where frequent fliers could mix and match tickets on Oneworld airlines to create a round-the-world trip up to 16 segments.
“If you’re going to make a change to the program, people have a certain expectation that they’re going to be able to use those miles and when,” said Brett Snyder, founder of CrankyFlier, a travel concierge website. “But in a sense, it’s all about revenues. [American] was giving away more seats than they felt comfortable giving away.”
Checked bag policies are also changing, with new policies taking effect for tickets issued today by American and for tickets issued starting April 23 at US Airways.
American said it will no longer charge for a second checked bag on flights to and from South America. However, AAdvantage Gold members and Dividend Miles Platinum and Gold members will have one fewer free checked bag. American customers traveling on an “AAnytime award” or a full-fare economy ticket will also no longer receive free checked bags.
US Airways MasterCard holders who pay an annual fee of at least $79 will begin receiving one free checked bag starting on April 30, which is the same policy for American’s Citi card holders.
American also increased its fee for an unaccompanied minor ticket to $150, up from $100.
The carrier is also upgrading its inflight service on US Airways’ transcontinental and trans-Atlantic flights.
Fresh meals will be served in first class on flights longer than two hours and 45 minutes. Previously, meals were only served in first class on flights longer than three-and-a-half hours.
Customers in international business class will also receive Bose noise canceling headphones and more entertainment options on a Samsung Galaxy tablet.
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