I noted this morning that American has raised its first checked bag fee to $40, a large U.S. airline record, with a $5 discount for prepayment. The airline is also making several other changes.
As I’ve been telling you to expect, American Airlines is changing how miles are awarded based on how you buy your ticket.
Beginning May 1, 2024, you will only earn miles and loyalty points for American Airlines flights if you:
- book directly with American and eligible partner airlines
- or book non-basic economy fares through preferred travel agencies, a list of which will be shared in late April
AAdvantage Business members and corporate contract travelers will be exempt from this policy.
Since we don’t know which travel agency bookings will no longer earn miles, we cannot yet assess the scope or impact of this change. For instance, if Expedia Group bookings no longer earn miles that’s huge and would be simultaneously doing two contradictory things.
- American has been driving to reduce its sales costs, pushing people to book direct and especially online. They believe they can earn as much or more revenue at lower cost, filling planes for instance without selling tickets at a corporate discount in most cases. This leverages the AAdvantage program to encourage people to book direct.
- However American has increasingly positioned the AAdvantage program to be appealing to occasional travelers, converting those passengers into regular and loyal customers who then take the credit card. It’s the already-loyal who book direct, while the occasional and new traveler discovers American Airlines through online travel agencies and can be converted – if they’re able to earn miles.
Chief Commercial Officer Vasu Raja has said that they see basic economy fares as a way to introduce customers to the airline and convert or graduate them to higher fare repeat customers. That’s why they do not punish basic economy customers the way that United does by banning them from bringing carry on bags on board and from using online or mobile check-in if not checking bags.
However if basic economy fares only earn miles if booked direct, they may undermine their ability to leverage the AAdvantage program to graduate these customers.
Meanwhile, American has raised the pet-in-cabin fee from $125 to $150, further encouraging passengers to jump through the paperwork hoops to say that their pet is a support animal eligible to travel for free outside of a kennel.
Wow, another customer-unfriendly move by the inept management at AA. What could possibly go wrong?
This is a smart move. Stop paying commissions for something you can have guest do on your own tech makes sense. It’s why travel agents are almost existint. I haven’t used a thrid party site or TA in over 20 years. Call me an early adoptor or control freak, love to book and manage it myself. Princess, RCCL and Celebrity cruise sites; Bonvoy and Hitlon sites and AA site (even TWA, NWA and DL before that) give me best rates and guareenteed I will have a spot!
Given the “preferred” Amex fares, I would expect them to be one of the exceptions. That said, there needs to be a significant delta to ever consider booking through Amex as dealing with any changes is a nightmare.
This is an interesting development. Not so much regarding AA but whether it starts to grow around the world with other carriers. The only place I use Expedia or others for a booking is when buying J on one of the ME 3 carriers. They tend to come out $400 or more cheaper on a one way booking in comparison to buying direct. I ONLY do this when I am a day or two out and am absolutely certain I won’t have a change needed. In those cases I have save a bundle over the past years.
Large corporations use travel agencies, like American Express travel. This is unlikely to change as outsourcing the travel function is decades old.
Corporate cards for travel (AmEx) have already reduced the potential loyalty points that a corporate traveler can earn.
Now this.
Could this mean that business travelers will no longer earn ANY loyalty points for traveling on AA?
They must use corporate travel agency, they can’t charge it on a loyalty point earning card, and as a result of this policy change, butt-in-seat may earn nothing for them.
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I feel a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced.
Further validation to the free agent strategy. Forget the miles. Buy F when you need to get somewhere. Be done with it. It’s not like on AA outside of being CK or knowing an AC agent you can get any sort of good irrops service anyway.
Your “loyalty” is only worth “loyalty points” if you give us your custom through certain channels we prefer. Otherwise, we don’t consider you loyal. OK, cool. Have a good one.
If the major corporate travel agencies like CWT or American Express are excluded from the list, this will be a giant middle finger to most corporate business travelers. I would hope that they aren’t that dumb.
One other thing…
AA’s credit card partners are Barclay and Citi.
Not AmEx.
So to think that they may keep AmEx as a credit earning travel agency may very much upset current Loyaly point earning credit card partners.
1) I would imagine bookings through most corporate portals would still earn points (preferred travel agent, corporate contracts, etc)
2) It’s been interesting to me to see Amex Travel, Chase, Capital One all saying they want to earn more of their customer’s bookings. Airlines can’t like that – so I am guessing these portals are unlikely to be “preferred travel partners”?
This is clearly the biggest news of the day. Delta/United may copy if it works. American Airlines sent me an e-mail about it, so it is clearly something they view as big news and that needs to be explained to the customer.
I have to book my travel form work through Concur. If I stop receiving loyalty points I’m don’t with AA. It’s bad enough that I get docked for not being able to use my own credit card, now this?
Fascinating — and I think very smart — development on AA’s part. It’s very much like the hotel loyalty model: you only get your benefits by booking direct.
Meanwhile, the bag fee looks high (and it is), but I’d note that the ULCCs are now charging sky-high bag fees. $50 is not unusual. I just priced a 1000 mile Spirit flight and the oneway bag fee was $61. Nobody is going to be checking bags anymore (unless they fly Southwest or have some exemption).
I would assume that government booked flights (through DTS or other government travel software) will still earn. At least I hope; that’s about half my travel!
Not awarding miles/status to those who do not pay for their own tickets (ie. non-preferred corporate agencies) would be very welcomed, and hopefully copied by every airline!
Interesting that they offer miles for hotels/car rentals/cruises/etc. booked through “AA channels” (often managed by a 3rd party), but unwilling to do it for their own flights.
Will be interesting to see how it works. Definitely a gamble. I’m sure they have data on the percentage of people who engage with AAdvantage who primarily book through OTAs (both repeaters and those who book occasionally).
I’ve always wondered when Airlines would push back on the OTAs given that Hotels have been treating OTA guests as second class for years.
@Zebraitis While the (very) large corporation I work for issues company cards for travel and other expenses which don’t earn rewards, it allows employees to keep miles/points earned through work-related travel through using their own loyalty accounts. Anecdotally, most of our competitors do the same. I suspect many or even most situations where employees can’t earn, or earn fewer, rewards are actually the minority. The complainers get heard and the happy ones don’t feel a need to speak up.
@ TheJetsFan — I believe that AMEX discontinued discounts for AA flights effective Jan 1, 2023.
@ Gary — As an American Business member, do you have to indicate that the purpose of your travel is business or just be a member for the exception to apply? I’ve been wondering why they have added the silly “Personal or Business” question to the booking process at AA.com. In this case, it seems fairly obvious that the two things must not be related…
Been cruising more and flying less in the past few years. The cruises lines could use the business while the airlines need to be given the business.
I’m curious what percentage of Expedia/Orbitz bookings actually have the customer enter a frequent flyer number.
And AA will also handle any problems if you book on them, a smart move. I stopped using Priceline years ago when I booked a car on them, got to my destination and found out that particular car rental site had closed months before. Agency said I booked through Priceline and I had to pay current cost of rental at another location. Lucky for me I was able to go without a car and use UBER. The new cost was over $1000 more than what I booked originally.
This is not an exaggeration when I say I have never purposely book a flight with AA but everytime I have to deal with this unprofessional company, I get either stranded somewhere or I am exstorted for more money, treated like dirt, and forced on later flights. Anyone buying from this company is masochistic and is blinded by the mistreatment that has become commonplace on airplane companies in the US.
I always book airfare direct with the airline.
1) Makes changing the ticket and getting refunds easier.
2) In my experience, third party sites are not any cheaper than the airline’s website.
How does being an AAdvantage Business member exempt you from these rules when you can only input your Business # when booking direct anyway? Has something recently changed?
I spend 200,000 annually in corporate travel via Egencia on AA. My team spends upwards of 1.5 million annually. If that portal isn’t included AA loses my business
My company requires us to book through CWT. If I can’t earn miles on flights booked via CWT then I will need to find another loyalty program. Lifetime Platinum and long time EXP member that actually likes the new AAdvantage program, so not a hater here. Have gone all-in with Citi Exec card and have earned 325k Loyalty Points YTD between flying and CC spend. However, as I have no choice but to book work flights through CWT, not earning miles/points on those flights is a non-starter for me.
Do you (or Jon in NYC) think AA tickets purchased, e.g., using Chase Ultimate Rewards will continue to earn AA miles and LPs? Is there any indication of what will happen to the earning of AA miles and LPs earned on partner airlines if those tickets are purchased through the Ultimate Rewards portal?
Egencia, Concur and AMEX should earn nothing. Lets hope other airlines follow.
The free ride for people who dont pay for their own tickets hopefully ends.
The real danger to customers is if Expedia et al decide to retaliate by no longer handling AA bookings (assuming Expedia is not one of the preferred agents.) I’ve always thought that at some point the ability to comparison shop on Expedia for free followed by a direct booking with the airline was a freebee that would end at some point.
Relax everyone. This isn’t really about punishing third parties evenly – it’s about NDC adoption. Mileage earning only being removed from agencies that refused to convert or are unwilling to convert to NDC. Expedia has been on NDC for a while and I would expect no change for them.
I prefer credit card points to frequent flier miles so I do book simple domestic itineraries through bank travel websites. While earning airline FF miles on top of the 5x points I get from the bank is a nice to have, it doesn’t move the needle for me.
This is doubly true for hotels whose programs I find to be essentially worthless. I’d rather get 10x points from my credit card than any hotel currency.
“enjoy the value and magic of travel…”
Looks like we now know who left the bag of coke at the White House.
It seems big, but if you have any booking experience, you already know to book airline tickets directly through the airline rather than through an OTA. Even though this is often a pain and with new airlines you have to type in a ton of information. The airlines refuse to support customers who booked via OTAs, and send them to the OTA to get support, and they can’t do as much to help you as the airline can for those who booked directly.
I think I’ve booked an air ticket via an OTA once in 50 flights, because it had a fantastic price, but in the end it was a pain. So they really stopped this long ago, all of them, not just AA.
Of course Jim F’s question applies to other brands with their own Travel Portals, like Capital One and Citi, although they might make an exception for the latter. And not just buying with the brand’s points, but also buying with cash through a portal for the higher brand points earned?
To Richard’s point: Exactly! Although how odd would it be to allow booking through Citi’s travel portal (powered by Booking.com) when it’s no longer possible to transfer Citi TY points to AA?
Gary
Any estimate of how much AA hopes to move to AA.com and the hoped for cost savings?
I suspect a large proportion of people who are top tier barely spend any of their own cash to get there (all corporate payed travel). If major corporate travel portals were excluded expect to see a rapid thinning of the top tier elites in future. Of the flip side unless/until other airlines follows suit everyone will book away from AA (if they are able) and they’ll lose a ton of business. It’ll be interesting to see what transpires!
My company uses CWT exclusivly. Will I still earn AAdvantage miles? If not I will have no choice but to choose another Airline & Loyalty Program. Please advise who I should look into.
My company uses CWT. I just called and the rep knew nothing. They seem to have been caught a bit flat-footed with this one. Hopefully more comes out in the next few weeks. I need to book some travel and want to try to figure it out before I do.
This is really bad news. I don’t book on third party sites, but do book corporate travel. I’m already seeing AA fares much higher on it versus aa.com (and of course they are much higher than the lowest fare).
Interesting article posted on FT about AMEX GBT. Sounds like they have work to do before they will display NDC fares.
https://www.amexglobalbusinesstravel.com/the-atlas/how-were-striving-to-make-new-distribution-capability-work-for-business-travel/
If you make me President of Loyalty at AA, I will bring the biggest ax ever: No more loyalty points whatsoever, UNLESS you use an American Airlines branded credit card AND buy your ticket directly on aa . com !
I buy tickets through by redeeming Chase Ultimate Rewards. Suppose that CUR is not an approved agency. American states that LP’s will not be awarded for “AA flights.” Two questions:
1. Will LP’s be earned for partner airline flights booked through CUR which I have elected to credit to AA rather than the loyalty program of the airline I actually flew on?
2. What if these flights on partner airlines were booked as AA codeshares?
A real non–issue for me. I use Expedia to find the best fare/routing combination and then book directly with the airline. AA is never the winner, anyway. They are an annoyance, as I have 350,000 miles that will expire if I’m inactive too long. But, they never have rewards in the class I want when I want.