Late on Friday I wrote about leaked changes to the American Airlines upgrade program for 2025.
The day after the American Airlines earnings call, executives held a question and answer session for employees. One question came up about mileage upgrades and how elite members were getting passed over – because waitlisting for an upgrade takes away the option to pay a discounted cash upsell amount – and so non-status members buying cheap upsells are trumping elite customers.
The company’s Vice President of Revenue Engineering took that question, and shared more than he was supposed to because they’re planning an announcement for a couple of months from now. I now have the full detail of his answer.
Credit: American Airlines
The employee asked about the inability to confirm upgrades in advance of travel, and non-elite members jumping ahead of those trying to upgrade by taking cheap buy up offers.
Status members are not happy with the mileage upgrades right now. 99% of the time they have to wait list it first and see if they get it. They can be waitlisting these days 9, 7 months in advance no update until the day of.
When you go ahead and waitlist them that also doesn’t give them an upsell option…so all these people that are getting upsell upgrades online are in fact going ahead of our status members.
Credit: American Airlines
First, here’s how CEO Robert Isom framed the way they think about the usefulness of AAdvantage miles.
When we talk about loyalty overall, it takes many forms… it’s ultimately something we do to encourage loyalty to the company, and attraction to the company, and also it’s something quite frankly where we can sell miles to generate more demand for our product. It’s a form of distribution…
In the loyalty programs, in terms of tiering our best customers..these tiers are set up in an assessment of their value to the airline, profitability to the airline, and ultimately when we talk about amenities like boarding priority and upgrades or the ability to change itineraries or even as in the case of our ConciergeKey status customers where they have people that are tracking their travel it is all based on making sure that we provide them with a sense of value that they appreciate.
There’s always a balance between what we sell outright and what we reserve for our customers in terms of making amenities available for the purposes of status. That’s something that we always have to work through, and the kind of input that you bring up…those are the kinds of balances and tradeoffs that we need that input to make sure that we’re making the right decisions ultimately. Clearly we don’t want to alienate that customer. We want that customer returning.
The one thing I will say though, and this is based on real research from outside independent parties, when you generate loyalty at American Airlines I can guarantee you that the value of the miles that you earn, and the miles you can redeem, have the highest level of utility and value measured in a monetary sense of any airline that’s out there. I’m really proud of that.
Isom is saying that AAdvantage miles are worth more than most other currencies, so they aren’t feeling too much pressure, and they want the immediate revenue from upsells to the extent they avoid losing more revenue alienating customers.
Credit: American Airlines
According to their Vice President of Revenue Engineering, what they’re doing is letting members pay for an upsell using miles starting next year:
We are going to be be launching upgrade offers with miles Q1 of 2025. So, that will happen relatively soon. And another great use of your miles, so for those customers that have those miles nad want to use them, they’ll be able to do so. So, more utility better product.
And… oops… Isom notes that he wasn’t supposed to say that!
And you know that we’re announcing that to the world right now right? … For everyone that may be listening in we have some great news coming up… I wish we could have five minutes back.
Credit: American Airlines
Regarding the changes to upgrades using miles, an American Airlines spokesperson told me on Friday,
We’re always looking for ways to give customers more certainty with their upgrades, including the option for an instant upgrade using miles as a form of payment, which we intend to offer in early 2025.
I don’t personally expect that we’re going to like the value that this represents for the miles being charged – since it’ll likely trade off directly with revenue American might get upselling for cash. Miles might be worth around a penny apiece when spent this way, though it’s possible that (as with some of their other offers) the value a member receives for their miles could vary with that member’s AAdvantage status, either initially at rollout of this feature or in the future.
Seems to work similarly on DL. If you are wait listed with GU or RU, you don’t get upgrade offers for those legs.
Recently watched 20+ D1 Seats disappear in a couple days on a low volume route. Now more in D1 and PE than coach.
Never saw an $ upgrade on that one.
Another offer with Miles or Cash, miles were at 59,999 and Cash was $299. lower value than some flights.
View this through the lens of corporate travelers who have to fly southwest to ensure their bag goes over their head. After citicAArd holders were kicked out of group 2, it became impossible to buy 321 MCE and stow your bag over your head. Now, instead of flying on their own miles to guarantee F, the corporate traveler can “follow the rules” – their employer pays for the cattle fare, the employee pays for their torture tube survival.
So much of what you write is through the lens of the independent business person. This is a true benefit to hostAAges of fortress hubs who never see $49 buy-ups on 2000 mile flights.
Let’s hope they also make it work with tickets purchased through Concur where the agency owns the PNR even though the employee has to / gets to use their own card. I.E. after the PNR is ticketed and shows up in one’s AAdvAAntAAge AAcount, the miles upgrade is still on offer and works accordingly.
If this latter use case is part of the rollout it will divert a billion in personal spend to cAArds because flying up front is “survival class” for anyone conditioned to commercial air travel in the 20th century.
That said, Isom’s diatribe was the biggest bunch of corporate gobbledygook i’ve read in some time. I’m glad you have the “Isom seer stone” for the translation, because I certainly didn’t pick up what you said he said in his words.
None of the twisted speeches (@Hagbard is right to call it gobbledygook) are remotely assuring to me as a loyal Executive Platinum member. The rest of the benefits are okay but complementary upgrades are the absolute biggest reason to be loyal to a specific airline. What else is on offer?: AA has almost completely done away with first class partner awards to Asia for two people where you could get actual value from AAdvantage. Then they did the same for business class. They also did similar to flights to Europe on AA metal. Oh, and try to find space to use your Loyalty Points to Europe even 11 months out and you still come up empty.
In short, American has largely ripped the guts out of AAdvantage and they’re working tirelessly to make the program even worse for the people they claim to covet the most. I’ll wait to see about the specifics on the new program enhancement but if I can get largely the same benefits from holding a certain credit card then earning elite status with AA just makes the juice not worth the squeeze.
elite status with value: complimentary CK
elite status with no value: everything else
if you don’t live at a fortress hub and have to connect, loyalty is dead
if you live at a fortress hub buy the cheapest F
note to Tim: F on the A221 sucks worse than any AAirbus F
A221 F feels cramped in comparison; i tried it 3 times and it’s not worth the $100 savings
I feel like this is going to backfire again. Waitlisted to upgrade with Miles on an International flight for 15k miles, or buy it now for 69000 miles or 100 dollars! That’s what I expect to see. Since usually I can’t expense these upgrades I’m fine with giving up 15k miles for a lie flat seat when I have to work all week, no way I’m spending the amount of miles I could use to fly round-trip domestic on this type of upgrade though. Too bad some non elite will scoop the seat for 100 dollars since they are splurging on a vacation and us business travelers will continue to be alienated from Business class.
“Oops, I did it again.” Famous lyrics by Britney Spears and the Vice President of Revenue Engineering at American Airlines.
I’m close to EXP again this year. It would be the 11th straight year and living at a fortress hub. But for fear of missing out on complimentary upgrades, I either purchase F or purchase an upgrade. So what is EXP actually getting me? Some SWUs that I can’t use?
I’ve cut down international travel, so it’s not like I’m getting OneWorld First lounges.
Having OneWorld Sapphire on BA was useful, especially when the capital one lounge always had a waitlist.
The miles only upgrades will be a terrible use of miles. Sure someone that flys 5-6 times a year might use 30K miles to upgrade LGA to DFW. I don’t think it will be a game changer but will have some impact.
I usually buy cash upgrades. You have to monitor the price because initially they are outrageous. $1.1K for one way PHX/MIA no thank you. But within a few weeks of flight typically going (at least for me) around $200-$250 on that same route. While love free upgrades and will still at times play the upgrade lottery I don’t expect AA to give away first class for free to EXPs.
If I read it correctly, according to industry statistics cited by another blog, up to 90 percent of domestic first class seats are being filled by initial cash sales, booked first class awards, and discounted upgrade sales. This leaves very little inventory for tier status based upgrades. In the big scheme of things, I don’t see value in tier status. Just buy the premium cabin and be done with it..
The SOTA employee meeting, where the pre-announcement of the Q1, 2025 program for mileage upgrade overshadowed the other question from the same employee. The other question was about the recently implemented call center application, that effected over a thousand employees, and the challenges that came with the new platform. What was interesting to me was the management style Robert exhibited. He called out the leadership and asked why the question was being asked at this level before it was addressed. As an observer, I am not sure if this was a case of asking his team to take ownership or if it was a case of the ’emperor having no clothes on’.
I’m glad to hear the CEO views the dollar value per mile of an AAdvantage mile for flight redemption being materially higher than competitors is something important.
Now for these studies to make premium cabin redemption value front and center.
I value AAs premium cabin redemption options as the most important part of the program. They’r epretty good at domestic first class cross country trips being in the 20-30k range. Intl premium cabin they clearly have work to do on making those more available in the 57.5k-80k range.
Cash grabs by airline companies
I’ve learned that I love having lifetime status on a few airlines and make no effort to get a higher tier level @ any of them anymore.
The past was golden and the future grim as airlines have lumped everyone into one non elite sucker class with some rare exceptions
I chuckle at the gate as I watch the swarming wait list for upgrades for higher tier members
Who pay a fortune and then get near nothing in return as they file into the back of the cattle car defeated the vast majority
They are getting the shaft from AA and others.
Its all about the elite status illusion and little reward while making miles for redemption considerably more worthless.What a poorly ill conceived business model
Agree w Christian here. 8 yr EXP running and on track this year. This year has by far the fewest comp upgrades I’ve experienced. I’ll be interested to see the mileage upgrade option, as I’ve used it several times on DL last couple yrs as well. The Delta cash/mileage upgrade options are clear, and frequently compelling on shorter routes. Hence, I carry very few award miles there, as opposed to the 800k + on AA.
Amy indication that they’ll keep the existing mileage upgrade policy intact as well? So that this new pay with miles is an option, or you could go the traditional mileage upgrade route.
I find mileage upgrades often clear on the transcons I take as a Plat Pro, as it puts me at the top of the Plat Pro pack.
Well they confirmed what I expected. I’m no longer chasing EXP – stopping at PlatPro each year now – get my OW benefits and will be more diverse in flying other OW carriers or non-OW when I can get biz class on long hauls at more decent prices. This lets me focus my PlatPro flying in Biz on AA (either paid discounted Biz or buy ups). Won’t focus on flying AA in Y/PY when other carriers are way better in PY (or their discounted Biz). Won’t even bother to do the traditional upgrade path with AA. They will lose revenue from me flying less but guess it doesn’t matter to their new way of doing things.
If anything UA gets me back for more flying (I’m 2MM Platinum) – use them as a backup but will use them and * partners more if I don’t need to make 200K Loyalty points and then 250K for the more SWU’s
There’s no reason to be loyal to any one U.S. airline these days, particularly if you/re paying to sit in the pointy end. AA “elite” status has become an empty vessel, at least domestically. I mostly stick to DL for paid domestic F and my experiences have consistently been night and day over AA, especially in the AA A321 markets. Anyone who claims the two carriers are the same in F is either lying or not paying attention. Isom is correct about one thing though: AA miles are more valuable than Skypesos and other ff currencies. It’s still not enough to make me care much.
Still value to be had; I am plat for life, bought two basic economy fares from Austin to los Angeles for $270 each, selected exit rows round trip, always overhead bag space in group 3 and was upgraded on return and not in row 1…all for $570…for 2…
Isom has to be the worst executive in the industry. He doesn’t answer questions. He doesn’t listen to feedback. Everything he does is to destroy the company that he inherited, but to be fair Doug Parker started the problems. How Board of Directors stand by and let this clown destroy capital is beyond me. Look at the stock price if you have your answer
Basically just copying DL which offers upgrades for miles at time of purchase and then every time I check my itinerary. Often times the value is better than 1cpm v. cash price.
Personally I am fine with this option as I am happy to spend worthless skypesos on upgrades.
Oh and it is not 30k for a 3hr flight but more like 11k for a 4-hour flight.
In the immortal words of Carole King, “It’s Too Late, Baby…it’s just too late.”
I’ve endured too many years of AA’s incredible stinginess, and the now-useless “Systemwide Upgrades.” And the wording by AA executives in this article was just indecipherable, Orwellian drivel. I have no idea what they meant, except that I felt “dirty” and “used” as a customer when I read this.
Have taken my business elsewhere, and now feel like being a “free agent” is more valuable than being abused as an AA loyalty member.
The paid upgrade offers I get are ridiculous. I got offered $64 upgrade on CLT-JFK. No thanks. A little over an hour flight. Snack basket and a drink. I got the free upgrade 24 hours out.
As PP I’m happy to choose my MCE seat and take my chances on upgrades. I never get upgraded on the JFK-LAX or JFK-SFO flights. Usually just buy the class I want for those trips.
AA EXP and this year all I see is relatively cheap first class upgrade options. Is everyone seeing that amount or is it just people with EXP or PP status? Sometimes they’re tempting like.. 90 bucks for first but then I say to myself I get upgraded about 75% of the time, route depending, so I pass.
Congratulations, the comments from leadership provided perhaps valuable information but failed entirely to address the question. Nothing shared addresses the conflict brought forward by the employee. Politicians do this more directly, but the compassion for the issue lacks any resolve. Why not allow the EXP that is waitlisted to at least purchase the discounted upgrade to the general public at say 50%. Waitlist or pay half?
The option to use miles and a paid upgrade is still limited on certain flights. Booked multi city European ticket right after rates were posted. Purchased premium economy was only able to upgrade one way with payment and miles. Return flight smaller business class on waitlist for upgrade using miles and payment. Don’t hold out much hope because it’s for my son who only has gold status – bottom of the upgrade order. My experience is on long haul for myself only purchase business would not take a chance on upgrade even with systemwide segments. They will wait until last minute to try and sell that seat.
Have a trip from DFW-SIN coming up in Feb work trip and I can book PE. Was thinking of sticking to AA for the long leg since I have 4x SWUs from making 2MM lifetime plat which means connecting in NRT/HND/BNE to flights with no PE options. Since SWU redemption seems to be bottom of the barrel, thinking hard of going on someone like Singapore Air through LAX/SFO or other (non JAL)
Wow, talk about a big middle finger to AA EXPs (including me) and their so-called loyalty program. They should call them disillusionary points instead of loyalty points. I cannot find a single SWU spot available for US to Europe travel in 2025 so this announcement sure seems to be at least part of it. Having picked multiple SWUs as an “award” that cannot be used more than pisses me off. I was looking to fly my spouse and I to EDI at a cost of around $1600 and would have used the SWU to get to business class. Now I’m going to give the middle finger back and start booking award travel and dump my hundreds of thousands of points before they completely devalue the entire program. That EDI ticket is a whopping 64K mile award ticket round trip for both of us and while its not lie down I do at least get to pick some sweet MCE seats and not have to pay for anything other than taxes. So much for their revenue swap unless they are going to send me a sweet paid upgrade offer lol.
As far as complimentary upgrades, AA’s domestic first class product is an abosolute joke anyway. I can count on one hand how many pre-flight drinks I’ve seen offered not to mention the ridiculous “snack basket”. Every now again I get a great flight attendant that does a great job but most of the time not so much. As long as I can continue to book my tickets far enough in advance and use EXP to pick some MCE seats I’m good. I would only pay for an upgrade if I was in the back of the bus in a middle seat and did not have much of a chance to move seats before departure.
I’ve been EXP for 21 consecutive years and it’s really sad to see the AAdvantage program in its current presentation. Last year was the first year in 21 years that I had SWU go unused, not for lack of trying – so pathetic. This year will be the same, I will leave 3-5 SWUs on the table, I’m waitlisted on two flights GRU-JFK. In years past, you could simply call EXP and they would extend the date for SWUs. No longer, don’t even bother trying. All of the above official changes have been the silent policy for some time. I’ve been seeing paid upgrades for both domestic and international flights for more than a year, and I have long suspected that SWU’s were deprioritized/devalued. On the few occasions over the prior year that a SWU was confirmed there was a huge difference in the way FA’s treat me versus compared with the experience I had for paid Business/First seat. I always have gripes on a flight I used a SWU on with the FA service being terribly lacking. Make no mistake, FA can see whether the seat is revenue or upgrade, and leadership is hammering across the board to move away from SWU – it’s all about revenue, loyalty is meaningless. But, every dog has its day, as someone who has seen several up and down cycles in the airline industry. This will go full circle and soon management will be pulling out the red carpet again to loyalty customers. And when that happens, I for one will not forget how poorly I’m being treated as a multimillion miler with Platinum lifetime status at AA.