American’s new revenue-based miles earning started today.
- This applies to flights only. It doesn’t change the way you earn miles from anything other than flying.
- You will still earn miles on partner-coded flights based on distance and fare class, and some of those flights will earn fewer miles than before too.
- Overall American will award fewer miles going forward than they have over the past 18 months.
- These changes apply to travel starting today regardless of when you purchased your tickets.
Changes Still to Come
It’s important to note that other changes, like minimum revenue requirements for elite status, do not go into effect yet. You’ll have to spend a minimum amount on tickets in 2017 for 2018 elite status. And a trailing 12 month average of qualifying dollars will start to affect upgrade priority at some point in 2017 – but not yet.
Of course American isn’t done making changes: we can expect new fares that exclude elite benefits like upgrades and remaining upgrades to be for one cabin, i.e. coach to premium economy potentially both domestically and internationally.
American Airlines Boeing 787-8
AAdvantage Changes are a Devaluation — for Everyone
While revenue-based earning may negatively affect you, the total miles earned from flying won’t change that much. American claims the reduction is back to the level they were awarding 18 months ago, before the introduction of premium fare bonuses which were intended as an interim measure to compete against the revenue-based offerings of Delta and United.
Make no mistake, this is a devaluation and not merely a redistribution of benefits to the airline’s ‘most valuable customers’. Airlines have couched negative changes as meant to benefit higher fare customers at the expense of low fare travelers since the mid- to late- 1980s. But it’s never really try, always coupling redistribution of benefits with less generosity overall — even for those same high fare passengers.
At the same time American is awarding fewer miles, they’ve bundled changes to their award chart making those miles worth less.
And award redemption isn’t just the award chart price, of course, it’s also a function of availability and routing rules. American’s award availability has gotten much worse over the past 3 years. And they have the most draconian routing rules of any US airline.
American Airlines Airbus A319 Economy Cabin
No Clear Reason to Jump Ship to Delta or United
American Airlines for the most part though is just following changes already made by Delta and United — and copying them nearly exactly. So this doesn’t in itself make the program worse than its major competitors. It just means that the program no longer serves as a differentiator or reason to choose American over its competitors.
With load factors averaging over 80%, airlines don’t have to spend as much marketing to fill incremental seats and so they’re spending less to fill those seats. From a consumer perspective, just another reason to support allowing foreign ownership of US airlines to introduce new competition into the industry.
Revenue-Based and Elite Devaluations Don’t Change the Fundamentals of the Game
These changes are hardly reason for frequent flyers to despair. 6 in 10 AAdvantage miles are earned from things other than flying. And the total number of miles being awarded through the revenue-based changes merely turn back the clock on mileage accumulation a year and a half.
Frequent flyer programs are counter-cyclical. In rough times airlines award more miles to fill incremental seats, and with empty seats awards are easier to get. In more profitable times for airlines they award fewer miles, and there aren’t so many ‘leftover’ seats being offered as awards. If you’re comparing the state of miles and points to 2008 – 2012 or 2000-2004, things seem bleak. It all depends on your reference point.
It’s easy to earn non-flight miles than ever before. I had never seen a 20,000 mile credit card signup bonus before 2003, and only one credit card — Delta’s American Express — offered spending category bonuses.
There were no alliance awards allowing mixing of partners 15 years ago, and before 2008 US airlines didn’t allow one-way awards. (Delta only introduced half price one-way awards 19 months ago.)
American Airlines Airbus A321T at New York JFK
We’ve Called ‘The End Times’ Incorrectly Before
The end seemed near 11 years ago when United started offering confirmed international upgrades to top tier elites only on nearly full fare tickets and considered awarding those upgrades based on ticket spend instead of miles flown. At the same time Delta had been awarding status miles only on full fare tickets.
2003 and 2004 seemed like the end of the game. So did 2008 when US Airways eliminated elite bonuses for flying, only to revert when none of the other airlines followed.
They backed off of those changes because the economy didn’t support it at the time, but current revenue-based strategies have been a long time in coming. Some argue that they date in the US to the original America West FlightFund program. The big international shift may have been more than a decade ago with Air New Zealand Airports, spending Airpoints ‘dollars’ on tickets.
Earning miles via AAA travelers checks came to an end. US savings bonds. US mint. There are plenty of techniques left for earning miles, and indeed far more than there were when I got started — and there’s far more information sharing as well which better arms consuemrs against the programs which are themselves getting smarter.
As soon as the economy turns south and airlines need to fill seats, there will be bonuses. As soon as there are fewer people flying and fewer elite members we’ll see double elite qualifying dollar promotions.
The programs won’t be as naïve as they once were. Although complicated programs provide opportunities for gaming and generating outsized value.
Still Plenty of Ways to Win
The programs are like the casino house — they set the rules, so over time and across the majority of their customers they’re the ones who should win. The game though is still fun to play, and a small percentage of players can still win. That small percentage, of course, is us.
And in the coming days I’ll be laying out some of the benefits, hidden tricks, and drawbacks of foreign airline frequent flyer programs you should know about, whose points are easy for US customers to accumulate and which provide superior value. Just yesterday, for instance, I put a Singapore Airlines KrisFlyer one-way Suites Class award with stopover on a three day hold…