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:
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
- American has made a lot more coach inventory available for redemption on a married segment basis. That’s helpful for customers looking to fly the airline in coach, and terrible for anyone looking to try to change their award itineraries.
- They’ve also started to allow 18 hour connections on domestic awards so you’ll see saver award space more often — just watch out that your first flight might be at 6 a.m. and your connecting flight might be at 8 p.m.
- And they’ve introduced non-changeable discounted awards with better than saver availability
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.