A week and a half ago changes to the AAdvantage program leaked. I broke the details, for instance, that American would be moving to revenue-based mileage earning for flights sometime in the second half of 2016.
American just announced the changes, and they’re everything I had shared earlier in the month, although I also do have new answers to outstanding questions that help fill out the picture of how the program will work and where they’re going.
And they’ve also shared the changes they’re making to their award chart which fills out most of the rest of the picture.
American Airlines A321T at New York JFK
American AAdvantage President Suzanne Rubin explained to me that they “worked very hard on this, studying the marketplace.” The airline has been “occupied over the past several years” (focused on merging American and US Airways) “all the while looking at what we need to do to set the foundation going forward.” They’ve had a “great opportunity to study what’s gone on before. What we see today, rolling out changes, is the next step in evolution of the program.”
Here are the basics:
- Elite status earning remains very similar to what it is today with no minimum spending requirement for status. They’re eliminating the third qualifying method, ‘points’, while making elite qualifying miles easier to earn (a system similar to United’s; premium fares earn bonus qualifying miles). Executive Platinums will start with only 4 confirmed upgrade certificates per year rather than 8, and then earn 2 more at 150,000 qualifying miles and 2 more at 200,000 qualifying miles.
- American will be going to a revenue-based mileage-earning system during the back half of 2016 copying Delta and United. Golds (40%) and Executive Platinums (120%) will get a bigger bonus for flying, while Platinums will see a reduced bonus (from 100% down to 60%).
- Award chart prices are being adjusted up and down slightly for economy awards, going up though for the most part not drastically for business class awards, and going up substantially for international first class awards.
These aren’t good changes for members. They make me like the AAdvantage program less. But they’re less-bad than I think many have feared. And they leave American reasonably attractive compared to United and Delta overall which have themselves made many negative changes over the past couple of years.
American Airlines Airbus A319
Elite Qualifying in 2016 for 2017 Status
There are no changes to American’s status levels (there will still be 3 levels: Gold, Platinum, Executive Platinum). Those levels will still require 25,000, 50,000, and 100,000 miles. Qualifying on segments as an alternative to miles will not change.
American is eliminating their third method of qualifying for status: elite qualifying ‘points’. They had an either-or system of miles flown or miles adjusted by type of fare. Those are being combined, with expensive fares earning more qualifying miles than before.
I would regularly buy some expensive fares, some cheap fares, and the expensive fares didn’t help me earn status faster as a result. That changes going forward.
Elite benefits from one year will expire January 31 of the following year, instead of February 28.
Executive Platinums will no longer automatically earn 8 confirmed systemwide upgrades a year. They’ll earn four upon qualifying — and then 2 more at each of 150,000 and 200,000 qualifying miles.
Gold and Platinum members will earn 500 mile upgrade certificates for every 12,500 qualifying miles earned, rather than 10,000 (but of course qualifying miles become easier to get especially on higher fares). Beginning in 2018 the counter will reset to zero on February 1 instead of March 1, to align with changing the end of the elite benefits year.
No increase in elites from these changes: Perhaps the most common reaction I’ve seen among elites to these changes is that there will simply be more elites. There aren’t any revenue restrictions to cull the bottom out from the elite pool, while it will be easier to earn status on a mix of expensive and cheap fares.
Bridget Blaise-Shamai from AAdvantage tells me, though, that this isn’t the case. She points out that they’ve been running an elite qualifying points promotion for the past year, and that goes away. “We’re not inflating any elite group as a result. Some customers will be getting status faster, but there won’t be more people [with status].”
Late 2016 Redeemable Mileage Earning Goes Revenue-Based
American will adopt a system very similar to Delta’s and United’s for earning redeemable miles based on the cost of a ticket in “late 2016.”
Since American has three elite tiers rather than four, you get somewhat different winners and losers. Golds get a bigger mileage bonus than they do today. So do Executive Platinums.
Platinum members — earning 50,000 to 99,999 qualifying miles per year (with no elite level in between) — see their mileage bonus reduced.
There will be a cap of 75,000 miles earned per ticket — the same as Delta and United — so for expensive premium cabin tickets it will be desirable to book two one-ways rather than a roundtrip.
Until they implement revenue-based earning they will continue to award premium fare bonuses first introduced a year ago.
About a week ago I walked through how this will compare to earning under a mileage-based system. There will be some modest winners, but there will certainly be losers.
American insists though that they will be awarding the same number of miles for flying under revenue-based accrual as with distance-based accrual when you exclude miles earned from the premium fares promotion (which I think is fair for comparison purposes, since the premium fares promotion was meant to counter the additional miles United and Delta were awarding on expensive tickets while American wasn’t taking anything away from cheaper tickets). For this to be true AAdvantage members must on average be spending about 20% more on their tickets than non-members.
What It All Means for Flyers
American is giving out fewer confirmed international upgrades. They’re giving out fewer miles on lower fares. And the miles they do give out will be worth less for business and first class travel.
There’s very little here to be happy about — except that the changes don’t happen right away, and that they aren’t far worse than this.
On the upside, Suzanne Rubin says that American is looking at “all kinds of benefits” for the future and while she wasn’t prepared to say which ones were likely to come to fruition I mentioned things like upgrades on award tickets and also reciprocal upgrades with partner airlines. Those are hard, she says they’ve had conversations about reciprocal upgrades with most of their partners but haven’t been able to offer them outside of British Airways and Iberia.
The big concern going forward, now that we know about changes to elite status, mileage-earning, and redemption, is what the introduction of “Basic Economy”-style fares will mean for AAdvantage earning and elite benefits. American President Scott Kirby is on record wanting fares like Delta’s that come with fewer features, so that they can offer fares that match the ultra low cost carriers while encouraging AAdvantage members to ‘buy up’ to higher fares. That’s not something the AAdvantage team was prepared to talk about today.
View of the Wing, Boeing 787
Suzanne Rubin shared that she most wants members to take away that they’ve been studying, and have been “deliberate about the changes.” She’s “eager to be upfront with customers. For example, information shared before it’s firm. For instance accrual changes [they’re] talking about in the ‘second half of 2016’ — just as we did through the transition to a single frequent flyer program, we’ll continue to update members as changes get closer. Our goal is to be deliberate and transparent.”
As far as what’s next Suzanne says that “obviously we’re always in process [of] looking at what’s right to advance the business. We don’t have anything concrete to share. The team of people here at AAdvantage is looking at ways to make the program work for customers and airlines.
By no means is this the end of changes, but you can expect to see the same approach – deliberate, studied, and transparent when there are more changes.”
She did assure, though, that they’ve “given everything we have on the foreseeable horizon… Nothing [else] in the foreseeable future.”
Where’s the part on the award chart changes?
“Award chart prices are being adjusted up and down slightly for economy awards, going up though for the most part not drastically for business class awards, and going up substantially for international first class awards.”
@gary
gary, how tough will it be to get status match with LAN program and your htoughts on that program?
tks
Partner RDM/EQM earnings have indeed been released.
e.g. Qantas:
http://www.aa.com/i18n/AAdvantage/earnMiles/airlines/qantas.jsp
RDM earn still based on distance with 500 miles minimum for elites.
EQM earn on lower fare classes easier then EQP earn (O up from ⅛ EQP to ¼ RDM)
Maybe scrap that for RDM – I suspect further changes.
@Daniel M – prior post
As a Platinum who flies mainly international (discount in coach), I am losing > 75% of my mileage earning power. I flew to Bangkok in Sept. and earned 39,000 miles. With the new program, I will earn about 8,000 miles. I also flew to London (mentioned on the other award post) and earned about 21,000 miles. New will be about 5,500 miles. So for two trips that earned about 60,000 miles, I will now earn about 13,500 miles. Exec. Platinum would earn about 18,500 miles, so they get stiffed just as much. Unless I am reading this all completely wrong… Gary mentions a change in the bonus (Golds more, Plats less, Exec Plats a little more), but the way I read the email, that is the total earning, so everyone gets jammed.
@ Gary — This is some double-talk if I ever heard it: “They’ve been running an elite qualifying points promotion for the past year, and that goes away. We’re not inflating any elite group as a result. Some customers will be getting status faster, but there won’t be more people [with status].” In other words, they’ve ALREADY inflated the number of elites and this won’t make it any worse…
What upgrades on BA and IB?
Jim L: everyone paying under 20 cpm. Over that, you’re potentially getting more.
Gary
do you see a ME region on AA award chart (not partner)? This is weird.
Middle East – 45,000 65,000 85,000 (Y)
Middle East – 67,500 125,000 155,000 (J)
Middle East – 90,000 165,000 195,000 (F)
I thought AUH rumors faded away. Care to investigate further for us?
Gary,
These are huge 25-50+% increases for business and first class awards. Time to cash my million AA miles while I still can!
AA awards on and after 3/26/2016
http://www.aa.com/i18n/AAdvantage/redeemMiles/american-airlines-award-chart2016.jsp?cd=151116&gc=ACM&cc=EML&cp=LNK&skw=&tc=StarAwardLevels&pp=
Partner awards on and after 3/26/2016
http://www.aa.com/i18n/AAdvantage/redeemMiles/all-partner-chart2016.jsp?cd=151116&gc=ACM&cc=EML&cp=LNK&skw=&tc=StarPartnerAwardLevels&pp=
@Rick – Middle East is there on the EXISTING chart because US AIrways flew to Tel Aviv. It’s gone on the new American-only chart.
Wait, you broke the details? And here I thought it was JonNYC….
How will Citibank and Barclay’s EQP work in 2016
Gary:
Two questions on the new AAdvantage program changes for late 2016:
1. Assuming I fly two round trips from LAX to Europe for a total of 25,000 air miles on a deeply discounted fare. Although I won’t earn 25,000 AAdvantage miles because of the fare, would I still qualify for Gold Status based on these two round trips on an EQM basis?
2. Previously as a Gold Elite, I received four 500 mile upgrades certificates for each 10,000 miles flown. I have about forty 500 mile upgrades in my Advantage account. If I attain Gold status again would I still be able to use them (on a standby basis) on any fare, realizing I would have the lowest upgrade priority? Thanks,
Steve
Thanks Gary.
Any speculation on AS devaluation at this point? Their redemptions are wildly out of balance now.
There will be very little incentive for flyers to qualify for Platinum. The new system is broken if somebody with 25,000 EQM gets roughly the same benefits as somebody who flies 99,999 EQM.
Hopefully they come up very soon with a firm date for cutover to a revenue based RDM earn. I’ve suspended buying any AA tickets for the second half of next year until i know what the cutover date is . Why pay more to fly AA than say Spirit or Frontier if there is next to no earn of miles on AA? Especially when there are “new exciting changes” coming to AA cheap fares that make it more and more equivalent to ULCC
@Gary, How can you say that EXPs will get a bigger bonus from flying? Under the new formula, flying will earn me a tiny fraction of the miles I earn from my flights now. Fort anyone who buys low-priced tickets, especially international ones, the new AA program is a disaster. Those who get their employer or clients to shell out big bucks for their travel won’t be hurt as bad. Have you figured out the average cpm price that is the breakeven point for mileage accrual from flying?
Is AA going through a cost-cutting initiative? It looks like AA has outsourced management of its ff program to DL.
Well, the other shoe dropped,…..it will hit heads. The charts are so similar to United’s partner charts! 220,000 to fly RT on Cathay that used to be 135,000. That’s over 60% increase! It was so easy to earn those miles to do those Cathay First trips. But a couple will need 440,000 miles for 2 First class tickets. Those easy First class awards are not so easy now!
@rick in general the best values don’t last. it would be surprising if alaska doesn’t change their program. The only hope we have is that they believe their program is a competitive benefit, and they are under assault from delta in seattle. And they have the best operating margin of any airline in the US so they don’t exactly NEED to…
@Steve T – yes, you would still earn American status. And yes your accumulated 500 mile upgrades are valid domestically on any paid fare.
@Carlos – no different than they do today
@ZO I broke the details on the revenue-based earn, I believe he broke much of the rest.
Why in the world did they move Canada to Alaska zone this is ridiculous no other airline (even DL) has a separate zone for Canada from the US 48
pat is 100% correct. How can u tell your “valued” customers who fly 50-99k a year that they are getting basically same benefits as a 25k ?!?! Ridiculous ! And Gary no offense, but your info-gathering chats w/AA seem a little too “chummy”, yes ? Doesn’t sound like you advocated too hard with AA about how vast majority of your readers will view these “new and exciting” changes.
@Pat is Right – there’s not much point in arguing or attacking in a conversation about what’s already done, my goal for that conversation was to gain information and detail. However there were some subleties to the conversation. Like *American* pointing out to me that they still have award charts…
At least I hope she knows she can kiss away the winning of any awards next year.
Well, this is a bummer, but I already dumped them, so I guess it doesn’t really matter. I will continue to credit to Alaska, at least until they too gut their program. Just need to find a way to burn my existing cache of AA miles by Mar 21.
Gary, why don’t you challenge the AA claim that total miles awarded to flyers stays constant under RBE? Yield is less than the ~18CPM break even so I’m pretty sure that’s not possible.
Still looking for an upside to any of the changes but so far, the only positive is that Suzanne says American is looking at “all kinds of benefits” for the future. Of course she also says that they’ve “given everything we have on the foreseeable horizon… Nothing [else] in the foreseeable future.”
So, as an EXP and loyal customer, beginning in 2016 I can continue to pay more to fly AA, continue to fly 2 hours out of the way through DFW every time I want to leave the NW 1/4 of the country, but now they’ve figured out a way to neutralize the one positive differentiator between AA and DL. Almost all of my personal travel is paid first or business class and while I would think that is a valuable customer to an airline, they’ve figured out a way to eliminate any reason for me to be loyal. They run the business so I am sure they figure they’ve got it figured out, I’ll enjoy my benefits for 2016 but after that it’ll just be most direct and lowest cost J/F. If they want to have DL’s loyalty program that’s fine, but if I am going to accept DL’s loyalty program I want DL’s reliability and service to come with it. Good luck matching that Suzanne.
Who says competition is dead in the airline industry? The big three are in a furious competition to see who can scr(ahem) customers more. “Obviously we’re always in [the] process [of] looking at what’s right to advance the business.” In other words, raise prices and reduce program benefits. Thank you for that brief flash of candor Suzanne. We can’t wait for the next round in the race to the bottom sweepstakes.
As a J/F flyer and executive platinum member, I will stay away from AA, at least for the first half of 2016 because I will have crappy mileage earning while being charged through the roof for tickets after March 2016. Where’s the logic there???? If you charge more for awards? At least switch to revenue based earning at the same time. Otherwise AA will only lose premium flyers.
Well, this reminds me of the Big 3 Detroit Automaker. They charged more for inferior product and thought American’s will continue to be loyal to their business. People started buying foreign cars for their low cost (ULCC) and superior product (EU3 and Asia). This trend virtually killed the 3 Detroit automakers. And GM is no longer the largest automaker in the world. I see similarity with 3 US Airlines, they have excessive auxiliary fees, inferior product, inferior service compare to many foreign airlines and they take “loyalty” for granted. Well, I wonder how long it will be before people start to fly more ULCC and choose superior product EU3 and Asia since they loyalty is no longer rewarded. Only time will tell.
Ex Plat until 2017, $10K spent 2015, 120K flown on AA.
They need to hear loud and clear from the EP and CK member about how unhappy we are with these changes. It won’t undo this awful devaluation, but it might reduce or delay the next round of bad news coming out of AA. Please contact AA and let them know you are angry that they have copied DL and UA in crapping on their frequent flyers.
BARF! At least my lifetime platinum status gets me a nice seat and free checked bags. Cuz that’s all I’ll be getting when I fly AA from now on. I’ll be losing about 50% of the miles I earn, and awards that I save for like J to Europe are PRICEY. So…. new strategy:
1. Buy tickets based on price and best itinerary, screw loyalty to AA.
2. Use points earning cards like Chase to get freebies.
3. Buy discounted J tickets when European carriers have sales.
And when I do get on AA metal, I’ll still get that nice MCE seat as my reward. Again, BARF!
Thanks for posting the info. The sooner the better for myself so I can really start to make some decisions.
I generally book aspirational awards. So for me the new AA for redeeming for F awards will be about a 35% increase. US-Europe or US-Asia awards. So if I value the AA points currently at 1.6 cents, the new value for me will be about 1.2 cents.
Its good to keep things in perspective in my opinion. So yes, we can still get value out of frequent flyer programs like Delta, United and American. Its just that we can’t get much value now.
Really I am thinking at the about 1.2 cent value I am now seeing, for credit cards, the cash back cards may soon be the direction I would advise people.
Hi Gary. I’dl like to be able to redeem my Aa miles for QF premium seats. Which routes would you say have more availabilty…willing to position to Asia and other region with shorter haul to be able to try QF in F or J. Thanks!
@UA-NYC I challenged and they contend that the increased average revenue for AAdvantage members vs non-members accounts for the gap. I am simply reporting their argument here. But it is worth noting that they acknowledge fewer miles overall since it’s only neutral without the premium cabin bonuses of this past year.
Another dumb move by AA. What’s the point of being loyal to any one airline anymore? If you want better seats just pay the up charge and forget about flying so much. The airlines have become so greedy it’s ridiculous. They’re making record profits and they feel they have to continue to squeeze and squeeze. I’ll start flying better airlines like Virgin America. Who cares about AA anyway. They’re going after Spirit so the plane is going to be filled with rift raft. At some point the airlines are going to beg their good customers to come back.
Gary, one more thing. AA is talking about resetting the counter for 500mi upgrades… what about the accumulated 500mi upgrades from past year(s)? I have atleast 25 earned from when I was a PLT but never got upgraded.
@rick accumulated upgrades from past years are retained, at least AA has not made any indication otherwise
@gary
gary, what are your thoughts on LAN program and will they status match?
did they say when the flights becoem revenue based?
not sure if to ditch them as of january or accumulate as PLA until they go revenue based….
tks
As an EXP, do I still get the 100% bonus miles when flying AA and OW carriers before mileage accrual goes revenue based? What about when flying OW carriers after mileage accrual for AA flights goes revenue based?
i don’t trust a bit of whatever this lady (Suzanne Rubin) says. She has shows she can’t be trusted with the previous “overnight” (so that people can’t book tickets ahead of the deval) change of the AAdvantage program on stopover and explorer awards!
I think we all need to unite and then make the case to American that they are going from offering more systemwide upgrades than United to fewer. I personalty moved from United to American because of the extra upgrades and I will be moving back to United if American doesn’t at least match United with 6…
The other changes don’t make much of a difference to me….
I fail to see how AA is better than UA, which is universally regarded as having better saver award inventory over the past few years. UA also provides more RPUs/GPUs and does so at lower elite levels. And as you note the EQDs serve to weed out the low value elites on UA and DL, which benefits the remaining elites competing for upgrades and E+ seats.
I guess it’s hard to backtrack when you’ve spend the past 3 years extolling how wonderful AAdvantage was. But as predicted it was simply a temporary blip. I love being right.
@Boraso…Keep patting yourself on the back. Too bad you endured the last 3 years on UAdbaCO. If you aren’t hub captive to UAL you missed a good opportunity and contributed to the broader industry group think that flyers don’t vote with their wallet for better treatment and operations.
The new look of AA is disappointing but not unexpected. The economy is back and AA offered above market benefits for their most loyal flyers during some tough times. Those times seem to be in the rear view mirror so now the changes. I don’t like them but just like I did with UAL, I can vote with my feet and wallet. AS still offers me value and I can free agent other trips where I benefit. I will miss first class trips to Asia, Qantas first lounges and the Wing in HKG but nothing lasts forever.
Gary, I’ve been having a Kafka-esque experience getting miles credited with Delta that I think is an unexpected consequence of awarding miles based on money spent. I have flown on a number of flights with my infant daughter internationally, for which Delta charges 10% of the adult fare. She receives a ticket in her own name with a Delta ticket number.
Delta ticket plus fare paid should equal 5 miles per dollar spent, right? Not according to Delta agents. Though they can’t point to anything on the Delta website that says this, they keep saying that infant tickets aren’t eligible for mileage accrual. I get that she shouldn’t get any MQMs, but 5 miles per dollar is 5 miles per dollar whether the fare is $1 or $1,000. Further, on an upcoming flight the infant fare (10% of the adult fare) still came to $116, yet Delta says that still isn’t eligible for earning miles. The Skymiles terms and conditions state (in part):
“For Delta-marketed (flight numbers that include the “DL” airline code) or Delta-ticketed (featuring a ticket number beginning with “006”) flights, SkyMiles members will earn miles based on ticket price, at the rate of 5 miles per U.S. Dollar (USD) spent, including base fare and carrier-imposed surcharges, but excluding government-imposed taxes and fees.”
She’s got a ticket number beginning with 006 and paid a base fare. Further, the exclusions state:
“Mileage credit will not be given for the following: (…) Infants (under age two) traveling without paying an applicable fare. Mileage will be credited to the accounts of infants traveling on a ticket purchased at the applicable fare.”
She paid an applicable fare so the exclusion doesn’t apply.
While the mileage numbers aren’t huge, they’ll add up to a few thousand by the time she’s 2 and needs her own seat. I’ve submitted a complaint through delta.com and if that is not successful then I plan on submitting a complaint with the DOT. If frequent flier programs are now just refund programs then I want my refund.