American Airlines Chief Commercial Officer Vasu Raja was the last guest of the season for the American Airlines internal podcast for employees. At the end of his interview, asked what’s coming in 2024, he noted that he was being interviewed solo and “there’s nobody here to tell me what I can’t say, so I’ll reveal a bit more.”
The AAdvantage frequent flyer program reports up to Raja, and he goes on to outline several changes that are coming that haven’t been announced yet by the airline. The American Airlines new program year doesn’t start until March 1, so he likely got a bit ahead of his communications team.
In 2024 we actually get to really go and frankly have fun for our customers, make really cool products for them and it looks like this…
Making AAdvantage the most valuable and attractive rewards program period. We’re going to make it easy for customers to earn, where you earn more if you shop on the app or you come through the website. You earn more if are on the credit card than if you’re not.
We’re going to make redemption cheaper and higher volume.. than ever before, not just on us but on our partners.
And we’re gong to make status as we call it ‘unique and unmatched’ where by having status you actually get stuff. And finally what we’re really excited for is to continue to go and expand on the value we create through our credit cards for our customers, because through those things customers who value travel but may not be traveling as much as they did before the pandemic can continue to earn rewards, can continue to experience the best of American and its partners, so there’ll be a lot more of that.
Raja doesn’t get into the specifics of these changes, but it appears as though there are (4) broad changes that we can expect.
- Variable mileage earn. It sounds as though mileage-earning from flights will vary based on point of sale (“earn more if you shop on the app or you come through the website”) as well as based on whether or not you hold a co-brand credit card (“you earn more if are on the credit card than if you’re not”) apart from status quo where the credit card you use influences rewards earned from that card.
- Changes to rewards from status. Over the last couple of years, many rewards have been decoupled from status levels. Instead they’re rewarded at various thresholds between status levels. Confirmed upgrades don’t come once you earn Platinum Pro status anymore, you can choose them at 175,000 Loyalty points. They don’t come at 200,000 point Executive Platinum status anymore, you can choose them at 250,000 Loyalty points.
American has been encouraging members to go beyond status for more rewards, but also providing rewards between status levels, starting off with modest benefits after just 15,000 points.
It’s not clear how this will change from 2024, but Raja suggests they are “going to…” update status “where by having status you actually get stuff.”
- Redemption price changes for partner awards. American eliminated their ‘saver’ and ‘anytime’ award charts this year for flights on their own aircraft. Basically that means all of their awards for travel solely on American are now dynamically prices, what used to be called web specials. They did publish an award chart showing ‘starting at’ pricing but actual prices don’t seem to be reflected by that chart at all.
At the time they did not make any changes to how partner awards (and awards that include both American Airlines and partner airlines) work at all. That requires changes to contracts with their airline partners. Maybe there’s been progress making those changes? Because Raja says “We’re going to make redemption cheaper and higher volume.. than ever before, not just on us but on our partners.” This sounds like he’s saying partner redemption will follow the model they’ve laid out for American Airlines award travel pricing?
- Changes to credit card value proposition. We got changes to the premium Citibank credit card that comes with American Airlines Admirals Club membership this past summer, with a higher annual fee and new costs for additional cardmembers as well as new benefits. The changes aren’t worth the higher cost, but the card was already such high value for American Airlines regulars that I still view it as worthwhile even after the changes. (I’ve kept mine.)
American Airlines DCA Admirals Club, E ConcourseWhat we haven’t seen is changes to other American Airlines cards, from the mass consumer cards promoted on board (Barclays) and through other channels (Citi) to the small business card (which is now tied into their new small business program).
Raja seems to suggest we’ll see this: “we’re really excited for is to continue to go and expand on the value we create through our credit cards for our customers…there’ll be a lot more of that.”
It wouldn’t surprise me at all to see American use AAdvantage to nudge customers more to book direct. When airlines first launched their websites they had online booking bonuses. Some had bonuses for app booking when those were new. But American has been trying to get customers away from using travel agents, and not just by reducing or eliminating commissions. So reducing mileage-earn for tickets not booked direct could be coming, along with higher earn for customers with their credit card (United and Delta do essentially the same thing on the flip side, offering lower redemption pricing on their own flights to credit card customers).
However the piece here that I do not want to see is changes to partner award travel. That’s what currently drives the most value in the AAdvantage program. They haven’t raised partner award prices since fall 2016. And they were still competitive even back then, while others have devalued.
Being able to book Qatar Airways QSuites for 75,000 miles to Africa via Doha is amazing value, that surely cannot last? And I felt like my recent flight in Etihad’s First Class Apartment from Abu Dhabi to London Heathrow for just 62,500 AAdvantage miles complete with first class lounge access on the ground and onboard shower in the air was incredible value.
Etihad First Apartment
Etihad First Apartment
Although hopefully the still-really good Alaska Airlines partner chart which has real sweet spots serves as a constraint on new higher AAdvantage partner redemption pricing, especially since Alaska status will become viable for American Airlines customers eliminating the minimum number of flights you need to travel on Alaska going forward to keep it, and since Alaska elites are effectively treated the same as American elites when flying American and vice versa.
I’ve reached out to American Airlines to clarify Raja’s remarks.
They’re really doing everything they can to drive away business from managed travel/travel agents, aren’t they?
If the hinted at changes are accurate, at least in part, it doesn’t sound that bad. Variable mileage earn is something from which I would benefit. The rewards from status certainly kept me on the hamster wheel until the 250k LP point – hopefully that is not increased to a 300k point. Better rewards at lower points could be nice if implemented. IMO partner awards are still the most compelling reason to credit flying to AA and earn AA miles. Having exceeded the 250 LP reward, I am crediting my next two flights (pre Feb 29) to BAEC to earn some tier points and Avios for the 2024 year. But as long as AA doesn’t massively devalue partner awards and said awards are still available (which is harder that it used to be, but they still can be found).
Forgot the last clause of the last sentence…
“But as long as AA doesn’t massively devalue partner awards and said awards are still available (which is harder that it used to be, but they still can be found)” then I’ll gladly stick with AAdvantage as my primary choice. My location makes that a fairly easy choice, but I am crediting some earning to BAEC and I’ve been using AsiaMiles (with transfers from Amex) for intra-Asia awards and a planned CX award in F from HKG to JFK.
@DWT – it certainly appears that way. Whether a lack of vision or just mismanagement AA does not seem interested in pursuing large (even small) corporate accounts, and if accurate, the variable mileage earn could be an effort to push fliers away from OTAs.
And still no mention of improving AA’s woefully uncompetitive Million Miler program.
I hope they realize how important the current partner *premium cabin* pricing is to high value members, esp vs what UA and DL charge. If that consistent value gets optimized away to reduce the 3-6 cent per mile redemptions, the reasons to stick with the AA ecosystem decline. And AA is probably more reliant on that delicate balance than DL or UA.
And Texas Capital Bank needs to be really sensitive to partner award premium cabin pricing for Bask Bank account holders. Big depositors use the miles for partner premium cabin.
Gary – really shouldn’t be claiming here the partner values are unsustainable. They represent an appropriate price for sticking with the rest of the AA ecosystem and its lack of own-metal long haul international routes.
Gary – never mind I see you stated “However the piece here that I do not want to see is changes to partner award travel. ” – just disagree it’s a given that the pricing is inherently unsustainable given the state of AA.
First/business class awards even for domestic flights are just outrageously expensive – often times 100,000 miles one-way, with the exception of undesirable overnight flights from the west coast.
Bottom line?
American is putting lipstick on a Pig. They will continue to find ways to screw their customers.
Why people chase points on any airline mystifies me. The constant devaluations, the impossibility of finding redemptions that are reasonably priced and not circuitous along with the meager points awarded drove me away attempting to accumulate points. I no longer play the loyalty games and go with the best fare for my particular circumstances.
I tend to agree w/ Ken that the perception of getting anything in return for your loyalty to a company is becoming worth less and less.
AA does seem w/ these moves to admit that they can’t chase premium revenue and are trying to spend more to buy loyalty including from customers that use their website – which is not a bad strategy to pursue.
If AA’s financials don’t turn around in the first half of 2024, they should be doing some serious soul searching regarding their sales strategies – unless they can get a whole lot of costs out. All of the big 3 are built to get premium revenue; AA simply has to get that premium revenue or dramatically cut costs.
AAs moves make sense in the view that they don’t want to provide a desirable product for high mileage travelers. Their end goal is to be Spirit without the low prices and cheerful service, and profit off the inability of most people to accrue real value from their loyalty points. That may very work for them as a company
But as one of the decreasing number of folks who earn status based on butt in seat miles they are on my no fly list, and their dropping corp accounts makes it easier to justify not flying them in our corp travel system.
This is in contrast to DL and UA, and why DL faced backlash from their best customers over their attempt to make SkyMiles into non-AAdvantage.
They will continue to kill their golden goose if they continue to race Delta and United to the bottom.
@Gary —> You wrote above “4. We got changes to the premium Citibank credit card that comes with American Airlines Admirals Club membership this past summer, with a higher annual fee and new costs for additional cardmembers as well as new benefits. The changes aren’t worth the higher cost…”
A new Admirals Club membership now costs $850/year for people without status, and $800 to renew, dropping to $750/$700 for ExecPlat. (An Alaska Lounge+ membership is going up to $750/year for those without status; $650/year for elites.) Ignoring any other benefits to the Citi AAdvantage Executive card, the AF is $595, a savings of anywhere from $55 to $255 per year. I think the higher fee for the Citi card is still worth it for the Admirals Club membership alone.
In re: variable mileage earn from using a co-branded credit card, the same Executive card earns 4x miles on AA tickets. It would be nice if they upped that to 5x — what the AMEX Plat and Citi Prestige cards give you, but this being American, I’m not going to hold my breath…
I don’t travel internationally these days, so I can’t speak to the value proposition of AAdvantage currently in terms of partner awards. I do book a lot of domestic tickets, however, and almost exclusively with points. I’ve found that in the past 2 years the landscape for domestic economy tickets has changed dramatically. United used to be appealing. If I had a United credit card I could frequently find discounted award tickets with a reasonable value per point compared to cash fares. Over the past year, every time I’ve tried to book domestic with United (typically coast to coast) I’ve found mileage prices to be so high compared to all other competitors that I canceled my United card. Perhaps on short trips they are more competitive but I’ve consistently found them much more expensive than others. AA, on the other hand, frequently has award tickets for so cheap that I can’t justify booking with other airlines. I’ve booked routes and dates that are typically very expensive and found one way tickets for under 10K when everyone else was over 20K and United was 32.5K.
If AA is talking about making partner awards look more like awards on their own metal, I’m intrigued, given how they’ve been so lucrative for me domestically. That being said, while they’ve had great prices on domestic economy, their first class pricing has not been as appealing and the few times I’ve looked at booking internationally I haven’t found many compelling options. I’d say that I’m curious about this news and not cynical, but I don’t want to assume that the changes will be decidedly good for consumers, because devaluations are the trend in the industry, especially for more aspirational awards.
I have booked my own travel for nearly 20 years for work or pleasure. TA’s are like a landline or fax machine. Really no longer of any use.
It’s near criminal to call this a loyalty program.
I’m done. Lifetime Status member. I fly. I fly a lot. My butt is on an airplane in a seat. AAdvantage screwed us when IAG changed their program on 18 October but treated their Avios customers with a degree of respect while AAdvantage didn’t follow suit and took us to the cleaners. Will now buy the right ticket on the right carrier in the right class of service while buying the seat I want using a credit card that provides benefits and club access. Flyers are getting the shaft.
Loyalty Points: where you can earn more buying toilet paper to wipe your butt than you do placing said butt in an actual seat on American.
@sunviking82 – The average TA, yes. But some people still aren’t comfortable booking their own travel, so there’s a market. There are people who value their time, have the money, and just hire others to plot it all out. And although I haven’t used one for years, I could see using one for some exotic travel where I was getting out of my comfort zone. But for your average trip to Orlando, no, not necessary.
How about unblocking access to Google Pay to Executive World Elite cardmembers who pay $600 for their card to be increasingly less useful.
Background: American Airlines forbids their Advantage cards to be added to Google Mobile Wallets. It was funny when mobile usage was new in 2015, but it’s a serious unadvertised omission today without any explanation from AA.
Try find an award flight to/from Europe that is not 24+ hours in duration. Very limited connections through LHR often requiring an overnight in London.
I can’t get much worse than worthless for award travel.
“Their end goal is to be Spirit without the low prices and cheerful service”
Hilarious and well said.
On a serious note while I realize AA is effectively a credit card company that flies planes, they aren’t literally. So when is Citibank going to force American to deliver some value? That’s the only note of optimism I can strike.
About the only thing that would move the needle from me from a partner perspective is if they force Qantas to step up and release more premium space. Unlike Gary, I have about as much desire to go to, or transit through Abu Dhabi as I do having a colonoscopy without anesthesia.
@ paul —> “Try find an award flight to/from Europe that is not 24+ hours in duration.”
I agree with you. It’s not easy to do; however in October of last year…
Departure:
AS332 SFO (8:40am PST) — ORD (3:05pm CST) Flight time: 4:25.
>>> There was an AA flight, but it departed at 5:40 am and that is just way too early! <<<
Layover @ ORD 4:44
IB6274 ORD (4:35pm CST) — MAD (7:50 am CET) Flight time: 8:10
Total time: 17 hours, 19 min.
Return:
BA2791 OPO (6:40am GMT) — LHR (9:15am GMT) Flight time: 2:35
Layover @ LHR 4:50
BA213 LHR (2:05pm GMT) — SFO (5:10pm PST) Flight time: 11:05
Total time: 18:30
We weren't crazy about the 6:40 departure from Oporto, but that's the only one I could book on points, and make the BA flight out of Heathrow..
I have always found it much easier to get a nonstop on points back from Europe (LHR-SFO) than it is getting a nonstop to Europe on points (SFO-___). We have done it from SFO with AF (CDG) and VS (LHR) but not with AA, BA, IB, or any other oneworld carrier. That said, we will often choose to spend the night in Chicago or New York (trying to avoid DFW and MIA), to a) break up an otherwise long flight — my wife doesn't love flying. We can dine at one of our favorite restaurants with friends, and break up an otherwise very long flight. It's also much easier to find award flights out lf JFK and ORD than SFO.
BTW, the flight TO Europe was booked with Alaska points, but the flight back was with miles from American. (Two different reservations.) As I said above, the AA flight from SFO-ORD just left too damned early in the morning.
“AAdvantage screwed us when IAG changed their program on 18 October but treated their Avios customers with a degree of respect while AAdvantage didn’t follow suit and took us to the cleaners.”
@AGE – what changes has AA made since October 18? How did AAdvantage screw us when IAG changed their program?
All changes American Airlines is for the negative. Not a single positive change lately.
Would love to see them add some value back to Exec Plat by making awards bookable 365 days out.
One of the main values was the ability to cancel awards for no fee. Now that that’s available for everyone, I’m really not sure what value Exec Plat status brings.
@OCTinPHL
what changes has AA made since October 18? How did AAdvantage screw us when IAG changed their program?
On 18 October, IAG announced that they are changing the Avios program from mileage based to fare based – just like AAdvantage is now. While Avios members who purchased tickets prior to 18 October would receive Miles and Points for all trips via the mileage method no matter when the actual flights occurred, those receiving AAdvantage Loyalty Points would only receive LPs based on the fare of flights flown on and after 18 October.
This means if you purchased a ticket at any time on IAG (British Airways or Iberia), as a OneWorld member earning AAdvantage LPs, the ticket fare and carrier fees determined your Loyalty Points earnings. I lost between 47-61% value of LPs for three trips from/to LAX-LHR and LHR-Intra-Europe due to this change by American when my tickets were purchased last spring and early summer. I should have earned approximately 12,004 LPs for each LAX-LHR leg and in one case, the fare basis was calculated at $1 plus some carrier fees delivering a paltry 2,882 LPs for a 5,456 mile flight in a Premium Cabin. Others were similarly horrible. And fare basis details are not transparent. For this entire round-trip I earned 7,018 LPs when it should have been around 26,080. And I had three full trips that landed like this.
Bottom line – even though IAG made the change to the program, they attempted to treat their Executive Club members somewhat fairly. Yeah, some got screwed in the middle of their earnings year. AAdvantage made the choice to not follow IAGs lead and treatment of their Loyalty customers.
@AGE – but AA did not do anything. AA was already basing LPs on revenue. The credit they were giving for BA/IB tickets based on a mileage was a sweet spot. But AA didn’t take that away. BA did. Your complaint is with BA. You want AA to change its program mid-year because BA did? Again, you are saying you lost value for trips purchased last spring / summer but it was BA that changed its earning for *its* program. AA did not make any changes. I am having trouble following why you think AA is to blame. You also chose to credit to AA – when BA made the change, you could have credited to BAEC instead – and received credit based on mileage. Credit to BAEC instead and you would have received credit based on mileage.
I’m not defending AA here – AAdvantage has made horrible devaluations, raised qualifying for elites, etc. But blaming AA for BA’s change is ridiculous. Don’t like it, credit to BAEC instead.
I was ExPlat for nearly 20 years. Last year AA announced that I would need more LPs to get the benefits that used to arrive when reaching ExPlat. Thankfully they announced early enough I could move all my flights over to counting for Alaska where I already had some status, and move to Alaska 100%. Obviously flying AA when necessary. Alaska has a whole different feel, and I miss AA not at all. Sad to leave, but every year declining value for more and more spend, the ironic move to Loyalty Points that don’t involve flying AA. Changes that started with the merger with (takeover by) US Airways kept coming, all a decline in the benefits of flying loyalty. I gave up. Wanted to stay, forced to leave. But glad I left. Let me know if the needle starts to move back the other way.
@AGE – FWIW, I am crediting my next two PHL-LHR r/ts to BAEC even as BAEC has gone revenue based. Better than crediting to AAdvantage.
If you only earned ~7k LPs for LAX-LHR roundtrip in a premium cabin, the fare must have been fairly low. No wonder IAG wanted to eliminate the sweet spot. If you bought a ticket from IAG, it is IAG that is deciding how many LPs to “pay” AA. Sure AA had a chart for earning, but when IAG went revenue based, it is IAG that wants to pay the lower rate, not AA. AA couldn’t care because IAG needs to “purchase” those LPs from AA.
Unless AA truly intends to abandon the corporate business traveler, decreasing mileage earning for corporate managed travel bookers makes no sense.
@OCTinPHL
“FWIW, I am crediting my next two PHL-LHR r/ts to BAEC even as BAEC has gone revenue based. Better than crediting to AAdvantage.
If you only earned ~7k LPs for LAX-LHR roundtrip in a premium cabin, the fare must have been fairly low. No wonder IAG wanted to eliminate the sweet spot. If you bought a ticket from IAG, it is IAG that is deciding how many LPs to “pay” AA. Sure AA had a chart for earning, but when IAG went revenue based, it is IAG that wants to pay the lower rate, not AA. AA couldn’t care because IAG needs to “purchase” those LPs from AA.”
In my reply, I did state that one leg was a $1 Fare Basis and some small amount Carrier Fees. This information is 0% transparent on any ticket purchase these days. AA won’t even tell you their fare basis while BA does break down some of the fare information on their receipt.
The salient points are — tickets were purchased prior to this change. BA points the finger at AA and AA points the finger back to BA. I have climbed the Executive Club and AAdvantage (I am a member of both) ladders as far as I can go and they blame each other. No one will show me the Inter-Carrier Agreement. OneWorld should be one world. Never make large changes in the middle of the earnings period without providing some satisfactory process (Executive Club giving those who planned the miles as they planned them). American is not buying LPs and miles from British Airways. They told me it actually does not work that way. BA delivers the miles and revenue details according to their Inter-Carrier agreement and AA processes that information according to their program rules. This is an American Airlines decision.
As others have written here, like them, I am no longer going to chase Status. In March, I am heading back to northern Europe on American, British, and Turkish. Two one-ways — the right cabin on the right carrier at the right time for the right price in order to receive the right benefits. And by doing this, I am saving over $4000 per ticket while flying in F and J. It takes work and effort but it’s well worth the hourly rate of savings.
While there is a lot of bashing of AA (and some of it deserved), I do think that overall they have the best service (at least for this EP member).
Lately I have been trying other airlines, mostly because I’m on multi-city trips and AA doesn’t fly direct between segment 2 and 3.
Both UA and Delta First class was horrible, and I had my guitar with me and was told in no uncertain terms on UA that I shouldn’t have brought it on board (even though the gate agent said it was ok). They relented, as there were only 8 seats in first so plenty of overhead for everyone.
The service was horrible too, with FA’s constantly on their phones playing Candy Crush.
At least with AA you get a superior experience and status actually matters… Wait time is never more than a minute or two… Plus they help me with all my family (and even friends!) Issues even when I’m not flying. That’s a huge benefit when my 88 year old parents are traveling and they need help- I make the call and it’s taken care of in minutes.
As for the milage awards, I agree they have been watered down, especially the “system wide upgrades”, which are a pain in the ass to use, IF you can even use them… Several times I have seen them not available and there was only one first class seat booked.
(But I also have used them to upgrade fellow colleagues… I don’t know if any other program that allows you to do that for free)
So AA is the devil that I know, and know how to get around their road blocks, lol.
Talk about poor journalism. Anyone who actually reads this article can tell that all of the comments are from an author “guessing” at what Raja meant with no concrete proof to back up his cynical claims. I get it, click bait is valuable and you can sell a few more display ads by lengthening an article.
@Steve:
I don’t know how much sway AA has with partner airlines in adding meaningful premium inventory, as much as they would like to do so to increase the attractiveness of AAdvantage.
With Qantas, (the Queen of Mean) the likelihood is remote, since they don’t even offer their own members, except their ‘elites’ (those who hand over bucketloads of money to them) any worthwhile longhaul premium flights.
Even then, the taxes and charges are so astronomical BA would blush!
So glad I am no longer a road warrior. Exec Platinum for 10+ yrs and thought the program back then was fair. I have been an inactive flyer since 2009 and enjoying it tremendously. No more tight security (that’s required), no irate passengers, no…..
For all those people saying AA is making it harder to earn status – probably. However, elite status means something with American. If you hold Executive Platinum status you’ve got it all. Access to the Admirals and Flagship lounges on all AA and OneWorld flights, upgrades to first class, free Main Cabin Extra, etc. Contrast that with my lowly Qantas Platinum status. Sure I have lounge access on OneWorld flights, but aside from that I’m not getting free upgrades to business flying Qantas, nor am I getting priority seat selection. Sure I did have to spend considerably less to secure Qantas Platinum status than the equivalent American Executive Platinum, but the benefits aren’t as good.
@KangarooFlyer88
No. You over-simplified what EP status delivers. We don’t get “AC and Flagship Lounge access” other than for key International routes or Flagship service (which you pay dearly for) and you may get “upgrades to business” on US Domestic flights and a few other North American destinations. And now we contend with commuting pilots. Not dead-heads. Commuters. Slowly but surely we’ll be just like Qantas eventually. Right now, an existing EP must spend as little as around $16,000 USD or more to maintain their status and it scales roughly by 20% more for each tier under EP and the one below it in order to reach EP. And Lifetime Status members always start from zero rather than their earned lifetime status in order to requalify. And now actually flying means very little.
They need to ditch Barclay’s. They are terrible. 1980s processes and no way amenable to frequent travelers.
Just do yourself a real favor and do not except seat assignments in row 10 on the Air bus A 321 it is a cave no window on either side of the A.C.. I booked a trip with 5 in total 8 months in advance 2 8 year old chrildren I requsted a window. My grandkids have never flown before. Point blank they lied about a window. 4 legs total. In the row 10 caves..wiith 2 children was a nightmare Don’t trust anything.they say. I felt a failure do to there deceit.
How to make the program better? Simply rollback all the changes since the merger with U.S. Airways. And bring back the award chart. Done.