I’ve been loving American Airlines as a customer since doing their Executive Platinum challenge as part of the oneworld MegaDO. American’s 100,000 mile flyers are truly top tier, in contrast to at United where it’s just mid-tier and the real top elite level is Global Services. American’s top elites clear their upgrades, their international confirmed upgrade instruments are valid from any fare, and the lounges are nicer (albeit with less free food). And onboard wireless internet has changed my life.

American miles are also currently my favorite mileage currency, since my own goal is international first class awards — Star Alliance first class awards have gotten really tough, especially for a North American-based flyer who doesn’t want to fly United‘s first class. While first class awards with American miles are quite doable — Etihad (and I’m excited they’ll be adding Washington DC service next year), Cathay Pacific, British Airways (albeit with fuel surcharges), and even the occasional Qantas A380 seat. And of course American’s award availability to South America in first class is excellent, even if the first class product itself is dated.

American may be improving its product and making real investments geared towards the premium traveler. But there’s one area where it seems to me that they’re really kicking their customers in the shins.

Award Wallet. And of course other services that help you track your miles and points, as well.

American sent legal nastygrams to the online services that help their members track their miles and points, saying that those services were not permitted to access their site on behalf of others and could not store member passwords.

American claims that security was a major issue, they weren’t ok with a third party site storing member passwords and having access to those passwords to access member accounts. Of course, they continued to let Points.com do exactly that. American said they were confident in Points.com’s security, but of course Award Wallet is also a Points.com partner, and that partnership didn’t raise security flags for American… The story didn’t hold together for me.

Award Wallet developed a browser plug-in so that their website and servers would never have to contact American’s. Members entered their own passwords into their browser, and their own browser accessed American’s website to check member account information. The information was all stored on the member’s computer, and not passed through to Award Wallet’s servers. That seemed like it would be the end of the objection — no more sharing passwords with a third party, no more third party access of American’s website, their stated concerns would appear to have been met.

Unless the stated concerns weren’t the real concerns, I’ve imagined it was more about control over the product and customer experience than about security. If American’s members don’t go to American’s website, then American’s members can’t be sold ancillary products and services and can’t otherwise be marketed to through that channel. And American likely believes Award Wallet means fewer eyeballs for them.

Award Wallet now reports that due to American’s objections, they’re having to withdraw the browser plugin. Here’s the Award Wallet announcement:

We regret to inform you that we will be discontinuing support for the AwardWallet browser extension on February 25, 2012. This means that you will no longer be able to track your American Airlines related information (balance, status, etc.) on AwardWallet.com.

 We have been forced to take this action by American Airlines’ stance toward AwardWallet. We created the browser extension in order to address American Airlines’ concern that AwardWallet was collecting customers’ mileage data. We believe the extension addressed this concern because it simply collected your mileage data and stored it locally on your computer. American Airlines, however, objects to the extension. It’s position appears to be that AwardWallet is prohibited from providing any software tool that facilitates the ability to track the customer’s American Airlines’ mileage information. We think this is unfortunate.

I reached out to American, and their spokesperson got back to me within the hour. I wanted to know from their perspective why they were doing this, and if they thought there was a benefit to their customers. They described their position as upholding American’s

…long-held stance on how third-party websites access proprietary AAdvantage member details… Because travelers’ AAdvantage account numbers and passwords can be used to claim AAdvantage mileage awards out of their accounts and access personal details, American will always protect this information.

We simply cannot permit websites that have not satisfied our security requirements the access needed to track AAdvantage balances or any other function that is otherwise secured behind AA.com login credentials.

I did seek more information on exactly why Award Wallet’s browser plug-in wasn’t acceptable, but didn’t get very far with that line of questioning.

Nevertheless, American did say that they’re “in the process of qualifying a number of other mileage tracker websites.”

Now, if true it could well prove that they really do have security concerns. And that my sense that their stance is anti-customer is wrong.

Time will tell, because they wouldn’t say which websites or offer any sort of timeline for members to be able to use third party sites other than Points.com (which I do not find to in any way be a reasonable substitute for Award Wallet).

By shutting down website access to AAdvantage accounts that their members want to use pits the airline at war not with Award Wallet but with their own customers. Award Wallet actually helps to engage customers and reinforce the value of AAdvantage miles.

Members use Award Wallet and track their miles obsessively, they watch their balances grow and identify small changes in their account balances which allows them to follow up on missing points. I know that Award Wallet draws me to the AAdvantage website fare more often than I would otherwise go — every time there’s a change in my balance I log in to see the details. Each and every transaction is more valuable with AAdvantage when it’s easily tracked.

And AwardWallet keeps members engaged, MommyPoints observes that this is especially tough for families but AwardWallet lets you track multiple accounts on a single page and since its premium membership (a whopping $5 every 6 months) also displays expiration dates right next to account balances it helps prevent customers from falling away from the program.

Ultimately any product or service that makes it easier for customers to be customers is a good thing for both sides. Making your customers’ lives more difficult, making it harder for them to engage with you, raising the transaction costs of being an engaged member cannot be a long-term profit-maximizing strategy.

In fact, mileage programs that you can conveniently track in one place, whose expiration dates are easy to see there, and where balance changes are seen on a simple basis become that much more valuable. The easier a program is to engage with, in the way that you want to engage with them, the more valuable their currency and better the relationship you have with them. Award Wallet is a relationship tool that enhances the loyalty between program and member.

If indeed they’re “in the process of qualifying a number of other mileage tracker websites” then they’d better hurry up. And I’d hope that they would be open to ‘qualifying’ the ones that consumers actually find most useful.