Sky Talk

American Airlines announces changes to its frequent flier program

Travelers checkin at the American Airlines ticket counter in terminal C at DFW Airport.
Travelers checkin at the American Airlines ticket counter in terminal C at DFW Airport. Star-Telegram

American Airlines announced several changes on Tuesday to its popular AAdvantage frequent flier program including how members earn miles and attain elite membership status.

“We’re evolving to build a rewarding program for all members while giving our best customers access to our most exclusive benefits,” the Fort Worth-based carrier said in a message sent to AAdvantage members on Tuesday.

American is changing AAdvantage to a revenue-based mileage accrual program where members are awarded miles based on how much they paid for their airfare as opposed to how many miles they actually flew. The move is similar to changes Delta Air Lines and United Airlines have already implemented to their frequent flier programs where members are given more rewards for paying higher airfares.

Miles will be earned based on the airfare and not on the trip length starting in the second half of 2016

The changes will be implemented over the course of next year. American said its new mileage accrual system will be put in place in the second half of 2016, although the carrier did not reveal a specific date for the change.

New award redemption levels will be available for tickets booked on or after March 22. Customers who travel on flights this holiday season and during the first half of next year will accrue miles in their frequent flier account under the current mile-flown method.

Frankly, there is no reason to be loyal anymore.

Chris Marsh, AAdvantage member with Gold status for life

American merged US Airways’ Dividend Miles program into its AAdvantage program in March. When the company announced the merged program in late 2014, industry analysts were surprised that it did not include moving to a revenue-based system like its competitors.

“We have spent a lot of time since the integration of the two frequent flier programs really studying the combined customer base and studying the competitive marketplace and looking at how do we best set the foundation for the AAdvantage program going forward and what you see today is the first step in those changes,” said AAdvantage president Suzanne Rubin.

Reaction from AAdvantage members was mixed. Some applauded the carrier’s introduction of lower award redemption levels while others were disappointed that the original frequent flier program had moved to the revenue-based model.

100 million members of American’s AAdvantage frequent flier program

“It’s competitive rather than industry leading,” said Ben Schlappig, a Los Angeles-based travel blogger who has Executive Platinum status in AAdvantage. “I think they have turned their frequent flier program into a frequent buyer program.”

Last month, American president Scott Kirby hinted that the airline was considering implementing changes to the AAdvantage program in 2016. The program has over 100 million members.

“We think we have the best loyalty program in the world and we look forward to making it better,” Kirby told Wall Street analysts on the carrier’s third quarter earnings conference call.

How to earn miles

Starting in the second half of 2016, members will earn miles based on how much they spent on their airfare and based on what their frequent flier status is when they take the flight.

For example, customers will receive 5 miles for every dollar spent on the airfare and carrier-imposed fees if they are a regular AAdvantage member when they travel. Gold members will receive 7 miles per dollar and Platinum members will receive 8 miles per dollar. Executive Platinum members, the highest status available in the AAdvantage program, will receive 11 miles per dollar.

Based on a $1,894 round-trip ticket for a trip between Dallas/Fort Worth and London Heathrow, American estimated AAdvantage members would earn the following miles. The flight distance is 9,502 miles.

AAdvantage Member Level

AAdvantage Member

Gold

Platinum

Executive Platinum

Miles per US Dollars

5

7

8

11

Example Calculation Future

9,470

13,258

15,152

20,834

Example Calculation Current

9,502

11,878

19,004

19,004

The carrier said award miles earned on flights operated by its partner airlines, such as British Airways or Japan Airlines, will be based on a percentage of the flight distance and whether it was a first class, business class or economy ticket. Details of those changes will be announced at a later date.

How to redeem miles

It may take fewer miles or more miles to get to your destination on an award travel ticket next year.

Starting on March 22, award tickets will be booked under new redemption levels. For flights less than 500 miles in the U.S. and Canada, AAdvantage members will be able to book one-way economy tickets using only 7,500 miles as opposed to the current rate of 12,500 miles if they book at the MileSAAver award level which has restricted availability.

“As the new American network takes shape, we have a much greater percentage of our flights at shorter distances,” Rubin said.

However, off-peak economy tickets to Europe and Asia have increased. Customers will need 22,500 miles instead of 20,000 to fly to Europe and 32,500 miles to get to Asia instead of 25,000.

Getting elite status

If a customer pays for first class or business class tickets, American will make it easier for that customer to reach elite status in AAdvantage.

Beginning in January, customers who booked a full-fare first or business class ticket will receive a multiplier of 3 times what they would have received on the flight if they bought a discount economy fare ticket. Discount first or business class tickets will receive a multiplier of 2 while a full-fare economy ticket will receive 1.5 elite qualifying miles.

American said their multipliers are more generous than those offered by Delta and United as members will earn more elite qualifying miles for purchasing higher fares.

Executive Platinum members will also receive four systemwide upgrades once they qualify for the 2017 membership year and could earn an additional four more based on their flight activity.

And starting on March 1, Gold and Platinum members will earn four 500-mile upgrades for every 12,500 elite qualifying miles they earned. The upgrades will cost $40 if it is purchased online or at the airport, American said.

AAdvantage members react

Colleyville resident Chris Marsh has Gold status for life in AAdvantage and she’s thinks the changes will make it more difficult to use her miles for reward tickets.

“It’s going to be a lot harder to earn them I think, and to redeem them, it’s very frustrating,” Marsh said, noting that her husband has Executive Platinum status and is often unable to use his free upgrades on flights out of Dallas/Fort Worth.

They had saved up to 500,000 miles and planned to use them on round-the-world tickets but American eliminated those award tickets last year before they had the chance to book flights.

“Frankly, there is no reason to be loyal anymore,” Marsh said.

Travel industry analyst Henry Harteveldt said the AAdvantage changes are a smart move for American and likely would have been implemented earlier if American had not been focused on integrating US Airways.

“[The AAdvantage change] allows the airline to focus its best benefits on its best customers and its best customers are the ones who generate the most money for the airline and not the ones who know how to game the system,” said Harteveldt of Atmosphere Research Group.

Harteveldt said he likes the lower award redemption for short-haul flights and understands that American expects customers to use more miles on longer international flights where the carrier has spent money on investing in new airplanes and new in-flight amenities.

With the changes, American is now aligned with the rest of the U.S. airlines.

“It is a bit disappointing that they decided to just move-to-move follow United and Delta,” Schlappig said. “I think this was a missed opportunity to differentiate themselves from their competitors.”

Andrea Ahles: 817-390-7631, @Sky_Talk

Related stories from Fort Worth Star Telegram

  Comments