American Airlines Loyalty Points is the new program for how elite status is earned. You’ll be able to earn status with most of your activity in the program, not just flying. And they’ve actually created a fairly simple system, where almost everything counts and the “Loyalty Points” you earn over the course of 12 months determines your status.

• Gold: 30,000 miles earned
  
• Platinum: 75,000 miles earned
  
• Platinum Pro: 125,000 miles earned
  
• Executive Platinum: 200,000 miles earned

This system is going to mean more elites, and most members will be able to qualify for the same or higher status than they’ve had in the past, although there are exceptions.

I spoke with Heather Samp, the American AAdvantage program’s Managing Director of Member Engagement, about the program.

The New Status-Earning Year Runs March Through February

The new system will be based on points earned March through February. Status will be valid through March of the following year. So if you earn 200,000 points March 2022 through February 2023, you’ll be an Executive Platinum through March 31, 2024.

Heather Samp explained that the change is a “reflection of something we’ve noticed for years,” that members are “incentivized by status, but the end of the year is the holiday period, and the last thing we want them to have to remember is to requalify for status.” She then offered that credit card statements which include the holidays generally close in January. They want holiday co-brand spend to be included at the end of an earning year.

Two Months Of Extended Status And Double Dipping

All current status is being extended through March 31, 2022. Instead of seeing elites who didn’t requalify (easy as American made it) lose their status January 31, 2022 they’re giving two more months to qualify for status, and also using those two months as a head start on earning the next year’s status too.

• Members get an extra 2 months (January and February 2022) added onto the 12 months of 2021 to earn 2022 elite status on top of their 2021 activity. It’s effectively two more months of the 2021 elite program.

• And its an extra 2 months (January and February 2022) added onto the 12 months beginning March 2022 to earn 2023 elite status by acquiring Loyalty Points..

Choice Awards Available Starting At 125,000 Loyalty Points

“Loyalty Choice Rewards” are the new name for Elite Choice Rewards, a selection of benefits like miles and confirmed international upgrades, awarded at 75,000, 100,000 qualifying miles and beyond. Earning these will come at Platinum Pro and above for members who fly at least 30 segments on American Airlines and qualifying partner airlines (oneworld, JetBlue). AAdvantage awards for travel on American count towards this 30 segment requirement.

As long as a member has 30 flight segments they’ll earn a choice of benefits at,

• 125,000 points (Platinum Pro qualification)
  
• 200,000 points (Executive Platinum qualification)
  
• 350,000 points
  
• 550,000 points
  
• 750,000 points

Options include systemwide upgrades, bonus miles, Admirals Club day passes and more to be specified. They’ll presumably offer things like an Admirals Club membership and gifting status.

What Counts As A Loyalty Point Gets A Bit Complicated

A truly simple system would say that all miles count, but so far that’s not the case. They’re saying that flights on American, oneworld airlines and JetBlue count. They’re saying credit card spend counts, as well as miles earned through their online shopping portal, Rewards Network dining partnership, and SimplyMiles count. For now though nothing else counts though they expect the list to grow. Heather samp said they’re still talking to other partners.

Unsurprisingly credit card initial bonuses don’t count as Loyalty Points. In fact it’s only base miles earned through credit card spend – category bonuses don’t help either. You may earn 3 miles per dollar spent on American Airlines with a co-brand card, but only one of those miles will be a Loyalty Point.

And ancillary spending with American Airlines generally doesn’t count. So if you pay for a seat, buy up to Main Cabin Extra, or take them up on a post-purchase upgrade offer, that spending doesn’t earn Loyalty Points. That’s because they award miles for flights based on a ticket being issued, and American Airlines ancillaries don’t attach to ticket numbers.

Heather Samp pointed out that in some sense awarding points for these would be unfair to elites, who often get these items free and thus don’t have the opportunity to earn these Loyalty Points. But since flight bonuses count (6 extra points per dollar for Executive Platinums) qualifying under this program seems substantially skewed towards existing elites rather than away from them.

This new program no longer has a minimum earning guarantee towards status (so this is the end of the 500 minimum qualifying miles guarantee for shorter flights). However Basic Economy tickets will earn Loyalty Points. They only just eliminated Basic Economy earning towards elite status for 2021.

Specifically excluded from Loyalty Points are purchased, transferred and gifted points; credit card earning accelerators, multipliers, and acquisition bonuses as well as other promotional bonuses.

American Airlines Loyalty Points Will Determine Upgrade Priority

Currently American Airlines awards upgrades based on elite status and then rolling 12 month qualifying dollars. In other words, the more you spend the higher on the upgrade list you’ll be.

Since elite qualifying dollars are going away, upgrade priority is changing. Loyalty Points will be used as the upgrade tie-breaker instead of qualifying dollars.

The brilliance here is that every dollar of spend on their cards potentially improves a cardmember’s upgrade chances. Previously only Barclays cards earned qualifying dollars, and only at specific dollar thresholds ($25,000 for business, $50,000 for Aviator Silver). The amounts were out of reach for some, provided no reason to stretch beyond for others.

To determine your initial Loyalty Points in the program (for upgrade purposes only) they’ll take your rolling ‘EQD’ total as of February 28 times value times your elite status bonus.

Gold and Platinum members who earn 500-mile upgrades from their flying will have their clock reset March 31, 2022 instead of January 31, 2022. American hasn’t said whether earning 500 mile upgrades will change at all in this new system.

Miles Flown Still Matters

There’s one dimension in which miles flown will still matter for elite status: lifetime status. That’s still granted after 1 million miles (Gold) and 2 million miles (Platinum) with additional rewards for each incremental million miles.

American AAdvantage knows their lifetime status offering is uncompetitive (topping out as it does as Platinum status) and was looking at ways of fixing this prior to the pandemic. Hopefully that project still moves forward.

No Devaluation Coming

I’d heard about other changes that the program was working on and those had me nervous. After all the former head of the program said that award charts were on the way out. Apparently the other projects have been put on ice.

There’s no redemption changes being announced today. And Heather Samp says any other big changes won’t be “a 2022 thing.”

Some Elite Qualifying Scenarios

At an earn rate of 11 miles per dollar spent on flights, an Executive Platinum member would need just over $18,000 in flight spend to keep their status. That’s higher than today’s ‘normal year’ $15,000 spending requirement. And it’s about what United requires. But that’s without adding in a single mile from credit cards, online shopping portal, etc.

Take my 2019. I spent $40,000 on the premium Citi card and $50,000 on the Barclays Aviator Silver in order to earn 20,000 qualifying miles and $3000 qualifying dollars. That meant I needed to fly 80,000 miles and spend $12,000 to keep my Executive Platinum status. With that same $90,000 card spend (and no shopping portal or other relevant earn), I’d need to spend $10,000 to keep Executive Platinum with no mileage requirement.

Put another way I was earning 20% of my qualifying miles and 20% of my qualifying dollars from credit card spend. Going forward the same spend will earn 45% of the way to Executive Platinum.

On the other hand, though, someone starting with no status and earning Executive Platinum has a potentially long and expensive road. If they did it on flying alone it would take $27,012 worth of tickets.

• $6000 spend to earn Gold (at 5 miles per dollar to earn 30,000 points)
  
• $6429 more spend to earn Platinum (the next 45,000 points at 7 miles/dollar)
  
• $6250 more spend to earn Platinum Pro (the next 50,000 points at 9 miles/dollar)
  
• $8333 more spend to earn Executive Platinum (the next 75,000 points at 11 miles/dollar)

In this new program it’s easier to keep status from flying than it is to earn new status since a base member earns just 5 miles per dollar until they become a Gold, and elite flying bonuses grow with each higher tier. And the high cost of status using flying alone is also the point, since other forms of activity are frequently higher margin.

It is also worth noting that card and other partner activity goes relatively farther for lower-status elites because flights earn less for those elites.

Thing about Gold, the lowest level of status. $30,000 in credit card spend will earn Gold in this new system. It used to take $40,000 of spend to earn 10,000 qualifying miles (40% of the way to Gold, but without helping with qualifying dollars). For non-flyers low levels of status are easy(ish), and for big spenders high levels of status are easy. Bottom-line is that the program rewards a mix of spend and flying more than flying alone.

American Airlines Loyalty Points Are Fairly Revolutionary

A year ago I wrote that it’s time for airlines to award elite status based on non-flight activity. Today it’s possible to earn status on Air Canada and other airlines with nothing but non-flight activity. That’s usually limited to the lowest-tier of status. US Airways (whose management now runs American) experimented with this at the end of 2006. I was surprised it never caught on until now.

Frankly there’s just not been a lot of innovation in the U.S. airline loyalty space in several years, except for finding ways to require more of customers while giving them less. This is one of the more interesting things we’ve seen in awhile.

Seven years ago (and indeed even earlier) I wrote about why the highest ticket revenue passengers aren’t the best or most profitable customers. The salient points were that,

• Many corporate customers bought tickets because of a sales agreement, many business travelers bought tickets because an airline offered the only non-stop on the route, and rewarding those customers more for their flying spent money on them without incremental return to the business.

• On the other hand airlines don’t do a good job rewarding higher margin activities like co-brand credit card spend, buying seat upgrades, and engaging with other partners who buy miles at higher prices than the banks do.

The simplicity of “everything counts” is fantastic and recognizes the highly profitable role ancillary mileage sales play at the airline. Prior to the pandemic the profitability of the airline was almost entirely attributed to the AAdvantage program. Only everything doesn’t yet count, and I surmise they’re trying to extract additional revenue from partners to award Loyalty Points and not just miles for transactions – the question of exactly what counts is still up in the air beyond flying, credit cards, online shopping portal, SimplyMiles, and dining.

Making qualification run March through February, an transaction dates on partner activity (shipping dates rather than purchase dates on merchandise, statement close dates rather than spend dates for credit cards) is going to be confusing.

So it seems like there’s still some work to do on the program but this seems like a bold step, and that alone energizes me a bit about the program.

American Airlines Loyalty Points – Good Or Bad For Members?

There are going to be a lot of people earning status off of credit card spending alone (though without 30 flights they won’t earn choice benefits like systemwide upgrades). There’s a reason that back when American used to award lifetime elite status based on all miles earned in an account people were becoming 70 million milers… business credit cards, and big business expense reimbursements off of consumer cards.

Overall this is going to mean more elite members. Heather Samp explained that it’s not clear yet how 2019-style flying returns, and what routes or even travel days are elite heavy. The Monday-out, Thursday-back flying may not be the same. They think that elites will be more spread out across their system on this program, not all flying the 5 p.m. Thursday LaGuardia – Dallas Fort Worth flight. But she acknowledges that the elite “population may grow,” but thinks they’re well-positioned to handle that growth.

A lot of members are going to benefit from the new American Airlines Loyalty Points program for earning status. A few won’t like it. But if this is it, and we keep our award charts and most importantly partner award pricing, then it seems like a pretty good outcome. And they’ve broken out of he box of ‘doing what everyone else does’ and I have to like that.