American Airlines just announced when their AAdvantage program and the US Airways Dividend Miles program will be combined into one, and what the program will look like.

I’m going to outline the program below, based on the announcement that American made and also based on clarifications that I got yesterday speaking with AAdvantage President Suzanne Rubin and members of her team.

We’re Keeping the American AAdvantage Program, Mostly As-Is

Throughout the past year the mantra at American, as they proceed with the US Airways merger, has been “integrate before we innovate.” The goal has to become one airline, not to make changes. So it shouldn’t come as too much of a surprise that they’ve basically announced that they are keeping the current American AAdvantage program, with a few minor tweaks.

And while there’s going to be more detail on all of this to share, I came away from talking with Suzanne with a clear understanding that the goal here is to set expectations of members about what they will experience going forward. They never make commitments not to change things in the future, but they do look like they’re carrying forward the AAdvantage program, as it currently exists, for the most part — rather than becoming revenue-based or upending the award chart. Which is great news for flyers.

Suzanne told me, “what we’re trying to do is help people understand what to expect as we bring the programs together.”

What’s more, as they focus on integrating the two airlines first rather than making changes to AAdvantage, she points out that they “won’t be done when the frequent flyer programs integrate, there is a lot of work with the reservation systems and single operating certificate to bring two carriers together,” so that’s the airline’s focus. It sounds like they’ve shared the new status quo with us, at least for now. Suzanne emphasized that they will continue “the balance and restraint we’ve shown”as they look at what changes other carriers make to their programs.

Timeframe: They will combine programs and accounts on a one-to-one basis during the second quarter of 2015. They haven’t set a target date, and there’s lots of IT work to do, but they sounded optimistic to me about hitting their deadlines on the early, rather than late, side of the calendar.

Elite Qualification

They’re going with the (3) AAdvantage elite tiers, rather than (4) tiers like with US Airways. They’re combining elite qualifying activity from member accounts during 2014, for 2015 status, and from the beginning of 2015 for members to get a head start on the new year.

The only tweak to the AAdvantage rules is that they’re going to require 120 segments for top tier elite status, the way that US Airways does today. This seems largely the result of the combined route network — US Airways has a ton of short-distance flights in the Northeast, which drives the existing Dividend Miles decision on segments.

• 2014 elite qualifying activity from both US Airways and American will get pooled to determine your elite status for the rest of 2015. That means if you had 90,000 qualifying miles with American, and 10,000 qualiying miles with US Airways, you’d become a top tier Executive Platinum. The $25,000 I put on my US Airways MasterCard turns out to be useful after all (at least if I hadn’t already pretty much requalified without it).
  
• 2015 elite qualifying activity to date from both US Airways and American will get pooled as well.
  
• The number of miles required for elite status remains the same. The elite tiers remain the same, too — a three tiered program, AAdvantage Gold, Platinum, and Executive Platinum. I turned out to be wrong, at least at this point, when I guessed at the beginning of the merger that they would have (4) elite tiers like US Airways, Delta, and United do.
  
• For those who qualify on segments, top tier will require 120 next year instead of 100. All other segment requirements stay the same. But you’d need to fly 120 segments in 2015 for 2016 status (or fly 100,000 miles or earn 100,000 ‘points’ which are miles adjusted by fare class).

This does take away some of the incentive to shoot for US Airways Platinum status this year, folks flying between 75,000 and 99,999 qualifying miles should be strongly advised to push for the 100,000 mile level in order to see a return on their flying above 50,000 miles.

Combining Your US Airways and American Mileage Accounts

You’ll be able to link your US Airways and American AAdvantage accounts in early 2015. This will help make sure that miles and qualifying activity gets merged correctly. Of course they’ll try to do it for you if you do not do it yourself.

You won’t be able to move miles back and forth between accounts prior to the programs being combined.

Upgrades

The airlines themselves will combine in late 2015, six months or more later than the frequent flyer programs combine.

So during much of the year all elites on both airlines will have American AAdvantage elite status. But the upgrade processes will work differently depending on which airline you’re flying.

• When the programs combine all elites will get unlimited complimentary upgrades when flying US Airways.
  
• When flying American, the existing system prevails with one tweak. Executive Platinums still get unlimited complimentary domestic upgrades. Golds and Platinums will upgrade using 500 mile stickers (as it is with American today). These upgrades are earned complimentary at a rate of 2000 miles of upgrades per 10,000 miles flown. Additional domestic upgrade certificates can be purchased.
  
• American will offer unlimited complimentary upgrades to all elites on flights of 500 miles or less.
  
• US Airways elites will receive a starting balance of 500-mile upgrades based on the elite qualifying flying they’ve done.
  
• Top tier elites from both airlines will get the American AAdvantage benefit of 8 sytemwide upgrades, international upgrades that can be confirmed at booking (subject to availability) or waitlisted on any paid fare.

Here’s the American version that will start when the programs integrate, and will be the new model entirely when the two airlines combine.

Because US Airways has so many short flights on regional jets, the bulk of which offer a first class cabin, Suzanne tells me that 34% of the flights on the combined route network are under 500 miles and offer a first class cabin. That’s much higher than I would have guessed, but given US Airways that makes sense to me. And it says that US Airways elites below the Chairmans level still keep their complimentary domestic upgrades on a third of flights.

In addition, while they haven’t firmed the formula yet for giving US Airways elites 500 mile e-upgrades in their accounts from day one, they are trying to make sure US Airways members start off well-positioned when the programs combine.

Towards that same end, US Airways Chairmans Preferred members will get their (2) confirmed international upgrade certificates with the 2015 program year. And then when the programs combine they’ll get their (8) American systemwide upgrades.

If the 2 US Airways upgrades haven’t been used, they’ll go away with the new program, which is more than fair considering they’ll get 8 new ones. But US Airways upgrades only need to be applied to a future US Airways reservation… any Chairmans member might as well apply them rather than use them, and will in effect get 10 confirmed upgrades for the year!

On net I think 500 mile upgrades rather than unlimited complimentary upgrades are good for flyers. They’ve compromised somewhat on this between the two systems, taking the current AAdvantage domestic upgrade process, with unlimited complimentary upgrades on short flights.

The AAdvantage upgrade system leads to a higher upgrade percentage for lower-tier elites who aren’t competing against every elite every time they request an upgrade. American does a better job satisfying upgrade requests than, say, United does.

I think US Airways Gold and Platinum elites come out a little ahead of American Platinums here, because they’ve been getting complimentary upgrades and will also effectively be earning upgrade stickers at the same time for future use. (American Platinums earn those stickers but have to use them if they want to be upgraded in the time leading up to the programs getting combined.) And US Airways Chairmans Prefered members can double dip in 2015 on their confirmed upgrade instruments.

Worth noting that US Airways and American codeshare flights with each other still will only be able to be upgraded at check-in, not in advance. It’s a systems limitation that will last until the airlines themselves are combined towards the end of the year.

Both international systemwide upgrades (that are given to top tier elites at both airlines, and to American’s million milers upon qualification) and mileage upgrades will work on either airline when the programs combine.

Million Miler Status

There are no changes to American’s million mile status program.

When the programs combine, million miler balances at US Airways and American will be combined. They will not be re-calculated, e.g. using American’s legacy more generous formula where they used to count miles from all sources towards status.

This is going to be a relief for American lifetime elites, that they keep their lifetime status and that American is sticking with 3 elite tiers. United lifetime mid-tier elites were livid when the airline went to four tiers… and their 50,000 mile status became ‘second from the bottom’. That’s not happening with this integration.

It’s also an improvement for US Airways elites who were previously not able to earn anything beyond lifetime Silver but can now earn lifetime Platinum (mid-tier).

What’s more, a US Airways member who freshly crosses a lifetime million mile threshold as part of combining miles, will be eligible to receive American’s gift of upgrades when that happens. (A lifetime silver porting over to lifetime Gold at American, but not crossing a new lifetime threshold, won’t get the upgrades gift that comes with crossing a threshold.)

Award redemption

There’s no changes to the award chart at this time. When the programs combine, we keep the American AAdvantage award chart and award rules. See The Ultimate Guide to Constructing Award Tickets Using American Miles.

With a single program, miles will be able to be used both for saver awards and the more expensive awards that give you any available seat regardless of airline (currently that can only be done with US Airways miles on US Airways, and American miles on American).

I think many members were afraid that integrating the program would be a time that we’d see big award chart changes. That’s not happening.

Increased Class of Service Mileage Bonus

They’re increasing the international business class mileage-earning bonus from 25% to 50% on January 1.

Changes to Same-day Confirmed: Good for Legacy American Top Tier, Mixed for US Airways Elites

Top tier AAdvantage members will get complimentary same-day confirmed flight changes starting January 1. Currently American’s Executive Platinums have to pay $75 for the privilege, like all other members. So this is an improvement.

The American policy for same-day confirmed changes has a longer time window than the US Airways policy, but is available only for domestic and is restricted inventory.

The US Airways policy waived the fee for all elites, was available for international, and in broader inventory. But it was highly time-restrictive. So US Airways elites below top tier lose the fee waiver, the better inventory, and the ability to use it internationally (in those rare cases that schedules allowed). But they get a longer time window.

Same-day standby will still be free for AAdvantage elites.

Keeping American AAdvantage Account Numbers

When the programs combine, American AAdvantage members keep their account numbers.

US Airways members who do not have AAdvantage accounts will be given an AAdvantage account.

There’s real potential for confusion here because American uses 7 alphanumeric characters for their accounts, and US Airways used 7 alphanumeric characters for theirs prior to their merger with America West. When US Airways and America West merged, legacy US Airways members kept their 7 character numbers and the system added zeroes in front of it.

Not much should come of it, and a reasonable approach given the potential overlap of numbers, but interesting to note.

Overall, a Huge Win

I fly American because I find their program to be the most valuable across the board. So it’s great news that the program isn’t really going to be changing, except at the margins (higher segment requirement for top tier status; unlimited complimentary upgrades for all elites on the shortest flights).

US Airways Dividend Miles members are getting moved over to the AAdvantage platform, one-to-one, and will get to benefit from the AAdvantage program which is overall a better program. Some US Airways elites won’t like losing unlimited complimentary domestic upgrades below top tier, but:

• There are more international upgrades
  
• US Airways elites get unlimited complimentary upgrades on the shortest flights
  
• US Airways elites get a make-good, starting off with a complimentary balance of 500 mile upgrades.

And they get the AAdvantage program, mostly unchanged. Contrary to my expectations, they aren’t using the combination of programs as an opportunity to bundle in devaluations. While United and Delta have made huge changes to their programs and to their award charts, the changes at American/US Airways are mostly limited to what we saw back in April.

When if the merger hadn’t happened, US Airways probably would have already gone with a revenue-based program and with significant award chart changes. So this seems like a win all-around.

As you think about how these changes will work, the basic idea is that current US Airways rules apply to US Airways flights until the two airlines combine later this year. They don’t want to make tech changes to US Airways for what amounts to just a few months’ use. So all elites get complimentary upgrades on US Airways until the reservation system cutover, using US Airways prioritization rules for upgrades. And American new rules go into effect with the merger of the programs during the second quarter when they combine the member databases.

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