At the J.P. Morgan Industrials Conference on Tuesday, American Airlines CEO Robert Isom committed to maintain the value of an AAdvantage mile. This isn’t just corporate pablum. He was explicit that the an AAdvantage mile is more valuable for travel redemptions than competitors (“There’s no doubt about it that the value of a mile on American gets you farther than anyone else”) and something they “intend to keep an advantage on.”
Now if you have a customer experience and a network and a product offering that customers want, you have a chance to build loyalty. And from that perspective, American has always been the leader with our AAdvantage program, and we intend to capitalize on that and make it even better.
So I’ll start with this. There’s no doubt about it that the value of a mile on American gets you farther than anyone else. And that’s something that we intend to keep an advantage on. We’re also looking for ways to really expand redemption and making it literally countless ways that you can use an AAdvantage Mile. So whether it’s redeemed miles for gift cards, experiences such as our relationship as the FIFA World Cup U.S. North American sponsor. Those are opportunities where we can continue to expand.
And we expect — and what we’ve seen so far is that our loyalty enrollments have increased to record levels. They’ve expanded even greater than where we were in ’25, which were record levels as well.
And to just further note, this new Citi relationship, our single co-branded credit card program, that launched January 1, and we love what we’re seeing. We’ve had the highest level ever of co-brand acquisitions for the first 2 months of the year. We’re on track to meet the goals that we had set for ourselves. And ultimately, that’s to increase pretax income by $1.5 billion as we reach, and that’s over 2024 as we reach the end of the decade. So highest loyalty enrollments, highest co-brand acquisitions that we’ve ever seen. And all that is putting us in a great spot.
This isn’t a legally binding promise, of course, but it’s explicitly something Isom is highlighting to investors as a reason what customers will choose American Airlines given a better customer experience. If American can be as pleasant to fly as Delta, why wouldn’t you choose American when AAdvantage is so much better than SkyMiles?
And it’s customer preference for AAdvantage that drives cobrand card acquisitions – which are how the airline makes and will grow high margin revenue. American previously reported a 53% margin for AAdvantage and now they’re explicit that they expect their Citi AAdvantage deal “to increase pretax income by $1.5 billion” over 2024 levels by the end of the decade. This happens by growing cobrand revenue, not by cutting redemption expense.
When asked about what moats American has as a business, Isom concludes “at the end of the day, we have this loyalty program. Customers want to fly American. They want to use our loyalty, they want to use our loyalty currency.”
Low bar.
A ’78 Ford Pinto is more valuable than SkyMiles.
And yes, I understand the difference between the value of points to customers and the value of points to a corporation’s bottom line. I’m just making a dig at Delta after seeing a nearly half-million point quote for one-way trans-Atlantic business class.
I mean, let’s see how this post ages one year from now. But AAdvantage is actually an advantage compared to DL and UA right now. AA and Citi are singing from the same hymnal which is more than UA can say about Chase. If AA could get its act together it might be a worthy competitor to DL one day.
By the way, sitting at the Chase lounge in LGA right now and there are some cool old school Chase advertisements on the wall. The one next to me from the 1940s keeps referring to Chase as “the Chase” as in “you’ll find the Chase prepared to help” and “At home, the Chase has…”. Found that fascinating!
@Peter — I set my timer. *holding breath*
I generally have never had an issue using miles but at same time I don’t expect AA to make business classes seats available to Hawaii over the holidays. Plan ahead and be flexible. It’s not that hard.
I agree with Peter – they are earning my business because of AAdvantage redemption pricing vs United and Delta – not perfect, but reasonable domestic first class award prices and (not as good in the last year) – international as well. Too bad they don’t have more widebodies to have more international upgrade opportunities – would be nice if they had a way for SWUs to work on BA economy fares to Club.
AA points are VERY valuable to me. And this after I was THE Delta points for almost a decade. I no longer work to collect a single SkyPenny and only focus on other points.
Well he might not be the CEO much longer so…
That’s odd considering not all seats earn points any longer. Value is relative!
They get the lion’s share of my CC spend (DoubleCash in conjunction with a Strata for 2x AA miles/$) solely because AA’s Main domestic short-notice award prices generally require SIGNIFICANTLY less miles than DL/UA/WN. I almost always get a value of at least 3 cents/mile for my AA award redemptions, sometimes much more.
Probably less discussed but besides inflation driving devaluation Delta
is the single program of greed that damaged all loyalty programs over the last few decades or longer.They emboldened other programs including hotel programs to continue the path of torching value to aspirational awards.I have boycotted Delta for some 26 years now and will continue until I’m below ground.They also are extremely overrated and still flying around antique planes.While I have my issues with American they are minuscule compared to Delta and it sly Pesos program.
He’s right. I pivoted to AA after redeeming a June trip from West Coast to Europe for 30k on 3 weeks’ notice. UA was 80k. AA also wins across the Pacific.
Why do people still collect skypesos ? Its a serious question.
Seems like business model on AA miles has changed recently. I live in Chicago where we have the luxury of using either United or AA miles. Using AA miles was generally more favorable vs. United, but two months ago United now much more competitive than AA to most destinations.
AA is undoubtedly going to keep redemptions better compared to DL and UA – but those richer redepemptions come at a cost.
And the highest value passengers are focused first on schedules. If AA is not competitive in major markets like NYC, CHI or LAX, some high value passengers will put up w/ a worse schedules but not many.
and then you have to consider the quality of AA’s operation compared to DL and UA. No amount of miles matter if your flight is much more likely to be delayed or they route you through miserable hubs.
Great news, if Isom proves true to his word. The AAdvantage program is the reason I fly AA far more than its domestic competitors, including revenue flights in F. The only exceptions are occasional short hops.
@ Rene — American is a crappy airline, and sure their miles are worth marginally more than SkyMiles.However, SkyMiles are worth more than you make them out to be. Show us on the doll where Delta hurt you.
Prior to recently I would say I’ve been getting almost $0.01/mile with SkyMiles (and that’s WITH the 15% discount). Granted, there’s outliers where DL will charge 3-4x the cash price vs. AA/UA in which case you can get like $0.04/mile but nobody would pay $5,000 for a ticket on DL when you can get similar on UA/DL for $1200-$1500
UA would be my next “least” good at about $0.01-$0.014/mile.
AA typically the “best”. I’ve been able to get $0.014 – $0.024/mile.
I only fly First so perhaps that’s why my redemption values are lower.
However, this year it’s terrible, IMO.
Delta wants $1500 (cash) or 190,000 Skypesos (that’s after the 15% discount)
UA wants $3,882 or 160,000 miles (2 weeks ago it was $1,442 and 150k miles)
AA wants $962 or 150,000 miles
AA will “improve” by doubling the cost of redemptions. They will be. “more exclusive! “
Isom should just say that American will never charge 250,000 miles for a one way T/A coach award on a tired, 36 year old 767 like Delta the one delivered in 1990 (N171DN)…
As the economy continues to sour, value will once again be front and center to fliers. This whole “DL and UA will rule the world” narrative is nonsense. Value + global reach = AA. No other airline in the country has that combination to offer.
So where are these spectacular superior Delta Mob scene Hubs? lol
Atlanta DTW Minneapolis? Hard pass
If I have one true appreciation for Delta like Spirit & Frontier they help to keep folks off the more popular flights and programs that don’t know any better
For that I will be forever grateful
If American can just work on getting planes in the air on time I would be happy.
In the past, I directed the majority of my spending toward my Citi AAdvantage credit card. However, over the past few months, I have observed a notable shift in value. For the route I travel most frequently, United is currently offering significantly more favorable redemption rates.
This change aligns with my expectation that American Airlines award pricing would become less competitive following the introduction of Citi ThankYou points as a permanent 1:1 transfer partner to AAdvantage.
Additionally, I have found that United’s First Class fares are often more competitively priced than those offered by American Airlines on comparable routes. Given these factors, it appears to be an appropriate time to consider transitioning to a United co-branded credit card to better align with current travel value opportunities.
Isom should start by reducing International Business Class Awards which in most markets are 450,000 point redemptions. Completely ridiculous.
Whatever else you say about AA, this is spot on. AA miles are by far the best mileage currency in the world, with AS being a close second. DL was trash and UA has joined them in the dungheap.
A great mileage currency is nothing unless it offers more and better product for the punters.
Fortunately, AAdvantage excels in this department and it is pleasing to hear Isom saying it will continue. Kudos!
Regretably, AS Atmos had truly lost its way so early in its reincarnation. There should be heads on the chopping block there if they plan on being a serious player.
Worse company in America. Literally cancelled my flight twice during my vacation leaving me and my family sleeping in the streets at the last minute. They should be ashamed of themselves even coming out in public with this nonsense. They will cancel and leave you stranded without even accommodating you.
What else do people expect him to say? Highlight that it now costs 400-800,000 miles to fly roundtrip to Europe in business class?
Lying is cheap, when “value” is meaningless.
Ha! I smell total bs sure the value will stay the same AA will just keep raising up the number of miles to go anywhere. Was not to long ago (about 5y) you could fly to Asia in business for 250k RT. Now it’s triple, plus a $600 fuel fee.
That’s not value.
@Tim
AA has given me the chance to fly QR and EY biz and first class for 70-115K miles, for redemptions of 6 cents per mile.
We’ll have to wait and see what happens in the ME going forward, but I would still continue to fly them (Indeed, nearly did so a week ago) most of the time.
Delta still has its 500k Redemptions via Saudi Arabia. And charging 4 times as much as VA for the exact same seat on VA. Honestly, your crush on delta seems like a lighter version of Stockholm Syndrome.
Soooo in other words, we should expect AA miles to deval.
American airlines screwed me out of 52,474 air miles for seat upgrades after my flight got canceled because the crew ran out of crew duty after the plane pushed back from the gate. Next flight with no seat upgrades. I was contacted by AA that my request for air miles reimbursement was denied. You can’t talk to anyone about this. Me and my wife had to get off three different aircraft on our trip to Quito Ecuador. American airlines is a joke!
American has gone a long way. It still sucks here and there, but way less than before. Skypesos should be called Skybolivares, UA is not THAT bad, but huge devaluation in the last 5 years.
Mile per mile value, no one beats Alaska. But American at least is not far off. And when flying from MIA, American is very convenient and I had fewer headaches over the last 5 years than with Delta.
@Gene – OK. Just few to New Zealand AA for 99k biz. Delta was 400K+. Just flew Qantas on ATMOS from Sydney biz for 85k and again Delta was 400k+. SkyPennies are like real pennies now – no reason to produce!