American AAdvantage Will Award More Miles to Highest Spend Customers Than Delta’s Revenue-Based Program Will

by Gary Leff

… In some cases. And that mattters.

Delta says their new program rewards their highest spending customers, but they cap mileage earning at 75,000 miles per ticket. This cap is inclusive of elite and class of service bonuses.

For revenue-based earning that means Delta’s 125,000 mile a year Diamond members will not earn a single additional mile for business class tickets over $6818.18 (in base fare plus fuel surcharges).

So let’s look at the most expensive tickets that different airlines offer, and see which ones will earn more miles (leaving aside for now that American miles are themselves worth more than Delta miles).

If a Delta Diamond 125,000 mile flyer buys a business class ticket (Delta’s top cabin) from New York to Australia for $9280 in fare and fuel surcharges plus taxes, they’re not going to earn the full 11 miles per dollar (102,080 miles). They’re going to earn 75,000 miles.

If an American Executive Platinum buys a business class ticket (American’s top cabin) from New York to Australia, including an American Airlines codeshare flight on Qantas, they’ll earn:

That’s a total of 97,815 miles earned.

So American will offer more miles to the customer buying the most expensive ticket than Delta will.

Delta flyers can get around the cap in order to earn as many miles as American will award here by only buying one-way tickets. Even there the point remains: under Delta’s new revenue-based mileage-earning system, a customer has to game Delta’s system just to break even on mileage-earning. That’s a far cry from the idea Skymiles promotes that their system will award the most miles to the highest paying customers.

And then you bring back in that AAdvantage miles are worth far more than Delta miles.

Lest you think this isn’t a fair comparison, because it includes American’s premium transcon flights between New York and Los Angeles which earn significant bonuses, you can drop those and choose, say, New York – Hong Kong as the market so that for American you fly via Dallas. A top tier AAdvantage elite would still earn 73,557 miles for that trip.

No matter how much you spend on a Delta ticket you can’t earn more than 75,000 miles. But the top premium cabin tickets can earn as many or more miles on American, miles that are considered worth more to most observers, while American isn’t hacking way at the value of everyone else’s earning either.

The mileage-earning comparison won’t hold on all routes. Short-distance, non-stop premium cabin tickets, for instance, may do better with Delta. Say an $800 ticket that’s 400 miles each way. But even there the new American bonus closes the gap. Even in this example, with short distance expensive connecting flights American’s program is more desirable because the new premium cabin bonus applies to each flight segment.

As you get shorter routes that are more expensive, at a variety of points, you’ll earn more miles with Delta than with American. But American’s new 2015 earning promotion closes the gap — and eliminates the narrative that revenue-based programs offer more points-earning to high fare passengers than mileage-based programs do.

The promotion also closes the gap on the earn side so that the value of the miles earned matter. And the value of the elite program. Even for high spenders.

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 »

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Comments

  1. Yeah also makes a flight from LAX/SFO to Europe or select S America destinations via JFK way more lucrative now. An extra 24k miles for adding the connection even if it is the only logical routing.

  2. Which is to say, if you are flying a segment on at least one of four routes select you will probably come out ahead, other than that, you will come out behind. So basically everyone will come out behind.

  3. the full fare Y passenger is entirely screwed here.

    the AA method is way too much rebate. So basically roundtrip NYC-SYD can get net you nearly enough miles for a free NYC-HKG on CX J (97K out of 110K needed), or 2 roundtrips of JFK-LAX (97K out of 100K needed)

  4. This math makes me think that they just either LOVE high value customers or a devaluation is coming.

  5. i think a deval is inevitable once the programs are merged. This HIJ-fare earnings bonanza, coupled with the incoming flood of cheaply-acquired US miles put the existing award chart in serious jeopardy, IMO.

  7. And all those AA miles you earned… yeah, no award seats back to Australia.
    Oh, use them to Europe instead. Hope you love BA’s $1000+ fuel surcharge.
    Scratch that, I’ll use them for my domestic coach trip for Thanksgiving, oh wait, that’s 100,000 miles roundtrip, more than DL’s 60,000.
    Ok, I’ll use them to South Africa… nope AA doesn’t go there either.
    Ok, lets be fair. I can get a great off peak flight to Europe on AA coach fairly easily. Wait…what? There’s no TV on the seat…huh? My neck hurts trying to watch the movie on the overhead monitor.

  9. @Jason, I’ve used AA miles over the past year for Etihad first class to the Maldives. I’ve used it for three Cathay Pacific first class trips. I’ve used it for Qantas first class. I’ve also booked Japan Airlines first class. Iberia has good business class award availability to Europe. Qatar space can be good. So can LAN space.

    Tell me about those valuable Delta miles again? 😉

  11. I claim that in Q1 of next year, there are going to be mass executive firings at Delta. An airline can fly backward for so long, much like Mars in retrograde can’t continue to orbit the other way to the eye.

    I do find this ridiculous anti-passenger customer service from Delta rather amusing. Next, Delta is going to do an individual mandate if FF members don’t fly, stolen from Jonathan Gruber.

    Thanks.

  12. Be careful, Gary, the bag of hot air and misinformation known as Delta Points will be calling this all a miscalculation and that we are all wrong and shouldn’t be asking for so much from the airlines, it’s just not fair he says.

  13. Much like the AS double EQM in SEA, moves like this don’t happen simply because another airline #KeepsDecending in DP’s words. People can scoff at Delta’s program, but you have another legacy following in lockstep and the third spending a ton of money fighting to keep their top spending elites.

    Delta is controlling the FFP narrative right now. As I thought, he who devalues first comes out ahead by establishing the rules. In short, AA is doing this because DL forced this particular narrative. Don’t think for a second AA is doing out of the kindness of their hearts, they’re going to spend a ton of money keeping their big fish on AA metal.

  14. Gary-

    Have you looked at actual SYD fares on AA? For whatever reason (read it elsewhere, forget where), AA is coding most of these as ‘I’ fares for the US to SYD portion. As does Delta in your example.

    Even the $7000-$9000 fares. Basically if you are buying 3 to 5 days in advance AA is lumping you into a ‘discount’ fare so you only get the smaller bonus for the US – SYD. Not the 24k.

  16. If you bought the AA ticket as a discounted business class booking code I, you would only get 14000 miles, not 48,000 miles.

  18. @Nybanker it isn’t, especially when codeshare flights on several partners count for this promo. But pricier business fares and first class fares earn the same bonus here, and will earn the same class of service bonus starting in 2015.

  19. Although don’t have the same easy familiarity with high-end airfares that you do, it strikes me that you had to go to some pretty complicated lengths to find an instance in which AA would yield more miles on a premium route than Delta (assuming you didn’t buy an I fare, assuming you didn’t book one-ways on Delta, cherry-picking one of only a few routes on which this might be true).

    So, my takeaway from this post is:

    – Delta’s (and hence United’s) move to a revenue-based system targeted to rewarding the top 5% of fliers is effective enough to have forced AA into a response. It’s not a business-destroying non-starter as many people state.

    – Premium cabin fliers (and high-fare Y fliers) will do better (on a miles-earned basis) on Delta and United than AA even with this new offer.

  20. To join the comments above, Gary goes to extreme lengths to argue “AA is more rewarding than Delta”, even though a vast majority of the time that’s not true. Pay over $6800, and fly on a few of the longest AA routes, and you come ahead. Otherwise Delta wins on high cost fares. It’s a very narrow niche and the post title is totally deceptive.

    This is a defensive move by AA to not lose high-end fliers. Maybe they will pick some up before they devalue. That may not be a bad strategy, as high value fliers may not switch loyalty after the inevitable AA devaluation. But this is by no means a ‘leading’ or ‘more customer friendly’ move by AA, no matter how frequently or loudly that will be argued.

    Yet AA must have a “better” loyalty program to have Gary so deep “in the tank” for them even if the posts are on shakier and shakier factual ground. I don’t see anyone out there so deep “in the tank” for DL or UA so maybe their loyalty programs are lacking?

  21. @AS unquestionably this is a competitive response by American, and a reasonably good one.

    The claim that the vast majority of the time Delta is more rewarding than American is just plain silly.

  22. @LarryInNYC these were the first two routes I picked out of the air. As I say this will not be true across the board, it won’t be true on shorter routes which avoid LAX/SFO/JFK transcons and won’t be true on say full fare coach for sure

  23. Gary, can you please post a link to the award chart that you are expecting (as you mentioned that you have posted in another link)?

Comments are closed.