American Released Data to the SEC That Shows How Award Travelers are Doing

It’s been tough to be an American AAdvantage member over the last several years if you actually want to use your miles to fly American. I contend the best use of AAdvantage miles is premium cabin award travel on partners like Japan Airlines, Cathay Pacific, Qatar and Etihad – but that’s not how most members use their miles.

Since US Airways management took over in the final days of 2013, far fewer passengers have been traveling on American using their miles. Immediately the number of passengers traveling with miles on American flights dropped like a rock.  That’s largely the result of a lack of saver award inventory. Two years ago they pledged to do better.

Here’s what the numbers looked like before and after the December 2013 merger:

2019 8%
2018 7.6%
2017 6.1%
2016 6.3%
2015 6.5%
2014 5.5%
2013 8.2%
2012 8.6%
2011 8.6%
2010 8.8%

Each year American discloses this number in its annual SEC 10-K filing. In 2017 6.1% of revenue passenger miles were flown by award passengers, and in 2018 that increased to 7.6% according to American’s 2018 10-K. Now, a year later, their 2019 10-K shows 8% of seats filled with AAdvantage redemptions.

That’s closer to where competitors are, and an uptick from the seats flown by award passengers since US Airways management took over the airline and instituted their revenue management philosophy (of almost no saver awards),

During 2019, our members redeemed approximately 14 million awards, including travel redemptions for flights and upgrades on American and other air carriers, as well as redemption of car and hotel awards, club memberships and merchandise. Approximately 8% of our 2019 total revenue passenger miles flown were from award travel.

The airline has taken several steps to

The percentage of passenger miles flown on award tickets is not the same thing as saver award availability. Passengers spending points at any of American’s 6 award levels count as do their web-only awards. However most passengers are looking for saver awards, and will travel when non-crazy prices are offered. So clearly American has moved the needle even if this hasn’t helped anyone looking to travel in international premium cabins.

So how does 8% compare?

  • Southwest Airlines is at 14.1% and Rapid Rewards members redeemed ~ 10.7 million flight awards (the number would be higher including non-flight redemptions)
  • Delta is at 8.9% and SkyMiles members made 20 million award redemptions.
  • United has not yet released their 2019 10-K filing. In 2018 5.6 million flight awards were used, representing 7.5% of revenue passenger miles. It will be interesting to see the effect of the airline going revenue-based during 2019 on the 2020 stats that’ll be reported in early 2021.

While American is making progress making awards available at modest average value, the move towards revenue-based redemption has meant more redemptions but fewer delivering outsized value (as though international business class saver awards weren’t already tough to get).

There are a few other significant items to note in American’s 10-K disclosures about the AAdvantage program,

  • They acknowledge “significant and increasing competition from the loyalty programs offered by other travel companies, as well as from similar loyalty benefits offered by banks .. These competitive factors affect our ability to attract and retain customers, increase usage of our loyalty program and maximize the revenue generated by our loyalty program.” (Emphasis mine.)
  • They “have recently instituted, and intend to institute in the future, changes to our business model designed to increase revenues and offset costs” and this includes the AAdvantage loyalty program however they are nearly out of ideas,

    We may introduce additional initiatives in the future; however, as time goes on, we expect that it will be more difficult to identify and implement additional initiatives.

  • Total program liability is $8.6 billion.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I’m wondering whether these numbers have improved because long-time elites are emptying their accounts while they move their spend elsewhere. I definitely fall into that category and I’m sure I’m not the only one.

  2. Once they are done auditing all the mailer code churners I expect award space to have better availability.

  3. @LAXJeff I was thinking about this. Maybe after the audit, those percentages might drop even more. The number of accounts being shut down and drained could affect even those coach awards.

  4. I just can’t understand why you would believe ANYTHING this company has to say. Do you honestly think AA consistently files truthful disclosures to the government, or anyone else? You really have to be a gullible sap to “take AA’s word for it” that they are flying more passengers on awards. It also does not indicate what kind of awards. Any search on aa.com will reveal the tru the state of affairs. This company literally hates its customers. When you post things like this, please know they are laughing at you–and at all of us. #NOMOREAA

  5. Since when did it become a priority for airlines to give away seats at the lowest possible award level. It is supply and demand people. If the airline can price it higher in miles it reduces their overall financial liability and if they can sell it the seat generates revenue. I’m lifetime Platinum with still over a million miles. If I want to go somewhere and saver isn’t available I either use points for the “everyday” award, buy the ticket (if award value is too low) or change my trip (somewhere else or a different time). No big deal.

    I’be been traveling 35 years and lifetime on AA&DL plus lifetime Bonvoy Titanium (and have status on 5-6 other programs). I NEVER feel I’m “owed” something and you shouldn’t either. Get over it people!!!

  6. @AC Thanks for the subtle brag disguised as a worthless statement on AA pretending to care about their liability for their miles.

  7. I wonder if people are redeeming at saaver levels or higher and how much is coach and how much is premium cabins. Just knowing the percentage of total revenue passenger miles flown were from award travel doesn’t tell you what many of us really care about.

  8. Using married-segment logic for award availability still feels punitive and crappy to me. Either you are willing to sacrifice a revenue seat on a flight or you aren’t.

  9. I’ve been flying SEA-EZE a couple of times a year in the spring and fall on either AA or UA for the last 15 years. I have flexibility on dates and start looking as soon as the schedules are loaded. Saver Award availability has gotten a little harder to find each year and award prices increased every few years but I’ve always been able to find the one business class seat I need (although it’s been years since I got F on a UA domestic connection).

    In the last few months of 2019, business Saver availability on both airlines completely fell off a cliff. I was unable to find a seat for next fall unless I wanted to pay for a non-Saver award. What was 60K on UA and 57.5K on AA is now 240K on United and 150K on AA. That’s a 1-2 cent valuation so I might as well get a cash-back card and pay cash (but the reality is that cash will be for a deeply discounted coach ticket)

    The golden age of premium awards feels over.

  10. AA biz class flight round trip to CDG from the US costs $2200. Miles cost 205k + $900 in taxes. (That’s roughly $3000).

    You pay more having miles than you do in cash with AA. If you make the mistake of buying those 200k AA miles, that jumps to about $5000 because you can only buy them at 0.5cpp.

  11. @Dennis Palmieri. As a long time financial analyst, I would like to comment that actually lying on an SEC report, can get management into big trouble. In fact, the Sarbanes-Oxley Act of 2002 requires that both the CEO and the CFO certify that the information in the 10Q and 10k are correct. There are law firms that specialize in suing companies for inaccuracies in financial reports on behalf of shareholders. Of course, these law firms get rich, the shareholders get a 20 cent post card checks. I have received several such checks, but am afraid to deposit them because if they are not real, it would cost me $20 to $30 in bad deposit fees.

    On the other hand, putting out misleading positive statistics, well, I believe most companies do that every day, including Sunday.

    Annual audited financial statements themselves are fairly accurate because they have to be reviewed and signed off on by an auditor. However, certain disclosures are hidden in footnotes in accordance with General Accepted Accounting Principles. It is sort of a cat and mouse game between the company and the financial analyst to find them.

  12. A disclosure of 8%, rather than 8.0% implies that the actual percentage may fall between 7.51% and 8.49%. Given prior year’s figure at 7.6%, it is likely towards the lower end of the above range.

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