How to Fix American Airlines and the AAdvantage Program

For several years American Airlines offered a clear value proposition. It made sense to fly American and earn status in the AAdvantage program because they were more rewarding than Delta or United.

I’ve written for many years that benefits which are significantly more rewarding than average won’t last, and it’s no surprise that American has cut back on its generosity.

Delta earns a revenue premium not because of its SkyMiles program, but in spite of it. Their recent IT meltdown notwithstanding, they offer a better on-time reliable product. American isn’t Delta. You don’t choose American in spite of AAdvantage, the underlying airline isn’t nearly as good.

With the airline operation lagging, cuts to the AAdvantage program, and strong indications of more cuts to come, I’ve been flying American less.

I requalified as a 100,000 mile Executive Platinum flyer in June, but have taken only 2 American Airlines flights since then. Just like at Delta the message from American has clearly been that customers should buy exaclty the flight product they want, so I do that — from whatever airline offers it with the best schedule and price. I’ve flown more United segments since June than American segments, it looks like I’ll earn United status also this year. (And I’ve also flown Southwest and Virgin America.)

I would never have even considered buying tickets from an airline other than American in the past if American offered service to where I was going. When I needed to go somewhere, I would go to the American Airlines website and buy flights. I’d spend more to fly American and I’d take a connection instead of a non-stop. It seems they no longer want me to do that.

Here are 7 things that American could do to get back to great:

  1. Don’t take away elite benefits on the basic economy fares that are coming. I am not my fare. I am either a valuable customer (and remember, I’m not just flying next year I have minimum spend requirements too) or I am not. And if I am that needs to be true every time I step into the airport and onto an American Airlines plane.

  2. Stop making it harder and less convenient to fly. Rescind the ‘no checked bags on separate tickets’ rule, or at least allow an exception for top tier elites.

    The rule allows American to fully capture checked bag fees, despite DOT rules requiring no more than one fee per checkin. But American’s 100,000 mile flyers don’t pay checked bag fees anyway, so why make life harder? Cut out the D0 nonsense that causes agents to board early, not to process upgrades properly, and start updating flight delays before boarding time.

    As it is, I have to leave the club early in case the aircraft starts boarding before published boarding time so I can get overhead bin space. But since American doesn’t update departure delays until the last minute generally I get to the gate to find no aircraft there. I stand around and waste time. The goal should be to help customers fly efficiently rather than creating ways to waste my time.

  3. Offer a consistent product. There shouldn’t be share buybacks until the airline actually invests in its fleet. Legacy US Airways aircraft should all have power ports and Main Cabin Extra additional legroom seating. Don’t reduce first class seating to do the retrofit. Don’t make me try to go out of my way to avoid Legacy US Airways planes, let me be a customer of the entire airline.

    Legacy American Airlines Airbus A319

  4. Stop slow-walking updates to Admirals Clubs. We need more seating in overcrowded clubs and better workspaces, Delta and now even United are ahead here.

    American Airlines Admirals Club Buenos Aires

  5. American went from first to worst in lifetime status, so reverse that. American devalued lifetime Platinum status (2 million miler) by reducing bonus miles given to Platinums from 100% to 60% and by introducing a level between Platinum and Executive Platinum.

    American has the least competitive million miler benefits of the big US airlines. Delta lets you earn lifetime 75,000 mile Platinum status and gives substantive gifts at million mile thresholds. United doesn’t just let you earn lifetime 1K status, they even offer lifetime Global Services, and they extend spouse benefits to lifetime elites.

    First American should rename ‘Platinum Pro’ because the name is stupid (even Platinum 75K would have been fine) and then make 3 million milers Platinum 75K for life and 4 million milers lifetime Executive Platinum and introduce a spouse benefit like United’s.

  6. Actually offer saver awards on American flights. American’s award availability has gone from best domestically to worst, and internationally from middle of the pack to worst. AAdvantage has become worse than SkyPesos for own-flight redemption. We’ve just had a really big devaluation higher prices should come with better award availability.

  7. Cut out making changes without notice. The multiple tiers of awards on premium cross country flights represents a fundamental departure from the way extra miles AAnytime awards supposedly work. American didn’t announce the change in advance and they haven’t even explained what’s changed. New higher levels on South Pacific AAnytime awards are being introduced with next to no notice (I wouldn’t have known about them coming this month if I hadn’t specifically asked). And the change to checked bag policy was made without notice, again I wouldn’t have known if I hadn’t seen it on American’s Agency Reference site.

I want to point out things that aren’t on my list.

  • I don’t say anything about reduced redeemable mileage earning for flights as a result of awarding miles based on the cost of a ticket. Fewer miles from flying? That’s fine if they can at least fix availability.

  • Fewer systemwide upgrades for top elites? Again, fine if they can make inventory available to use the ones customers get.

    American Airlines Boeing 777-200 New Business Class (Zodiac Seat)

  • Minimum spend for elite status (“Elite qualifying dollars”)? Let them decide what constitutes a loyal flyer they want to reward but then actually reward those flyers don’t introduce fares that won’t offer benefits.

The clear message out of American and AAdvantage has been — like at Delta and United before — that the airline is focused on the bulk of customers who fly the airline at most once a year, and get treatment equivalent to exactly what they they pay for in hopes they’ll pay more — and that loyalty matters a lot less than before.

If American wants to earn a revenue premium they need to treat their high frequency customers well. There’s been a shift at the top with American’s President going to United and with a new Senior Vice President of Marketing and Loyalty who was impressive when he led the AAdvantage program a decade ago. There’s an opportunity to really focus on Making American Great Again.

What do you think?

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, 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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  1. #2 is the biggest issue and is only made more annoying by how little it seems to accomplish for the airline, but will never change for two reasons:

    – Regulatory capture and the focus on “on time %.” Airlines love this stat (and therefore will continue to make sure it is the one emphasized by the DOT and media) since it is the easiest to juke (e.g. with D0). Customers should be much more concerned with things like mean delay (inclusive of on time flights) and standard deviation or variance around the mean. The fact one flight is on time 70% of the time and another only 30% tells me nothing useful if the 30% flight is typically delayed by only 5 min and the former by 2 hrs when it is delayed. I need to know how likely I am to face delays of multiple hours when deciding which airline to fly (why even the mean is not enough; we need a measure of dispersion as well).

    – The systematic exporting of hidden costs to consumers. Airline route networks are increasingly over-optimized (this is called efficiency) and concentrated (the same) making them fragile to disruption. Why? This cuts $ costs to airlines (particularly on an adjusted pro forma basis) and replaces it with the hidden or at least obscured cost of inconvenience to consumers. This means not just delays but worse mega delays are more common (could an IT glitch take an entire airline out of the sky for half a day 10 years ago?), load factors are maxed out so the ability to accommodate rebookings is reduced (again customers don’t see this until it’s too late), etc. Airlines aren’t incentivized to fix this because these costs are easy to hide in favor of reducing the much more visible cash cost of a ticket.

  2. Seems that there are too many miles/points chasing too few (saver) award flights and upgrades. Perhaps roll back the card bonuses and let things stabilize. Points/miles are fast becoming useless.

    They need to buy new aircraft, refit the older ones and improve the lounges. The lounges are particularly bad – there was a time when they were exclusive, now they’re more like a bus terminal.

    I’m considering United for next year.

  3. I think a lot of what you’re writing about is “inside baseball.” Getting people to their destination on-time and with their bags whenever you can is pretty much what 98% of customers are going to care about. “Nobody” can understand the current, foolishly complex frequent flyer programs, but making a reasonable number of award seats available is certainly something any loyalty program should provide. If AA has an important weakness now, that’s probably it, but I wonder how many of their customers even notice this.

  4. I might represent a weird segment of flyers, but I’ve been Gold on AA for what will soon be 3 years in a row, flying roughly once every month or two out of DCA. I also hold the executive card for Admiral’s club access and potential EQMs.

    As a club member, the boarding time thing really bugs me, and I’m guessing many members feel similarly. Traveling is enjoyable for me when I have a smooth experience from curb to my seat on the plane. This means mobile boarding pass, priority check in if I need to check a bag, TSA Pre, 20 minutes in the lounge for a snack and a drink, and the ability to trust that the time on boarding pass is actually when boarding will begin, so that I know exactly when to leave for my gate and still board with the priority group.

    The problem is, as an economy flyer, all of those things are actually what keeps me pretty tied to AA even as a Gold. I have the credit card for lounge access, I get a free checked bag and priority lanes, and get to board early with a decent change at MCE and the rare upgrade.

    I’m flying UA tomorrow (AA was twice as expensive and had a connection) and I’m already not looking forward to it. It will be fine once I’m on the plane, but I have to check bags, am traveling with an infant, won’t have lounge access, won’t board early, etc. It’s not going to be fun.

    But, at the end of the day, for that much of a price difference for pleasure travel, I guess it is what it is.

  5. Great post Gary, could not agree more. American has been extraordinarily agressive in pushing miles: for straight sale, for Electricity signups , wine, paying to transfer etc, Hardly a day goes by when I don’t get a “special” offer. By playing Barclays off against Citi, they just cut the most lucrative Airline card deal ever. A few years ago, Citi bought $1B worth of AAdvantage miles. And that does not even cover all of the partners miles that everyone in the industry shares. There are billions of miles sloshing around. But the day of reconing is coming. Even customers and partners who are essentially asleep at the switch are going to come to realize that it makes no sense to pay American 2-3 cents a mile when it is difficult for the average traveller to get even a full 1 cent/mile out of travel.

    I live in Dallas, so American is sometimes the only nonstop alternative. But I have flown Jet Blue and Southwest this year, and at this point American has to beat the price of those two to get my business, because American is an inferior experience and I have a gazillion Aadvantage miles from which I can’t extract fair value. For $95 a year on my Barclays Aviator, I get 10k miles and nearly the same level of benefits as the Platinum status that took 2.3milliion lifetime miles. I would be willing to bet 98% of cardholders can get more value from a card like Cap One with a 2% cash back and $59 a year annual fee than any Aadvantage card.

  6. Ok Gary come by 4333 and rad straight to the 7th floor and tell Doug & Robert! Better yet take over since clearly you know better.

    This screams over-enetitlement.

    “I am not may fare” if you purchase a striped down base fare you will get stripped down base fare attributes. You don’t go an autodealer and demand to drive an loaded $100k LS when you pay for a $35k base model IS now do you?

    Check bags through? People combine fares that aren’t intended to be used that way. They are separate coupons with separate fare rules. Most EPs rarely check luggage is this really a huge deal to you?

    Do you even have lifetime status? You haven’t been flying regularly since only a few years ago, long after the overly generous criteria was tweaked, before bankruptcy and before USAIR. Maya was still running AADV then…

    Seriously you want everything for nothing and chastise all efforts to reward people who spend more than you and are more valuable to the bottom line.

  7. And Gary your pic from the new EZE lounge which is about 2.5 years old. Brand new modern, spacious facility. Seriously you expect new facilities every two years? Since you are the savvy elite type why not go to LAN right across the hall if you are so displeased? You can’t make this stuff up.

  8. Is Josh G an American spokesbully? Because that’s about how United talked to me when I called to protest over them going revenue based.

    This is how the plutocratic pigs have destroyed upward mobility in this country and decimated the middle class. Forcing corporate policy that rewards only the wealthy, shoves the middle down to the bottom with the peasants they can lord over. I remember one of their owned GOP cronies telling us awhile back “You WILL like it!”

    No what we will do is cut you off and if you get much pushier, see you at the Revolution where the troops you’ll depend upon to defend you will be a multicultural army that doesn’t like fat white greedy porkers any more than those revolting.

    Your mint, Mr. Creosote.

  9. @Josh G – it seems like Josh G read a different post or is just engaged in an exercise of mood affiliation, because the responses don’t seem like they much of anything to do with the bulk of this post.

    The new EZE lounge opened in June 2014. The photo is of the new lounge. And yes, I have lifetime Platinum status.

    My post doesn’t complain about revenue-based accrual, or about the new higher award prices. It doesn’t complain about fewer systemwide upgrades. The biggest complaints are about operational changes that make it harder to fly American, that waste business travelers’ time. And yes I complain about devaluation of lifetime elite status, things that feel like reneging on promises and send a message the airline doesn’t care about customers who are loyal and buy their product even when their tickets are more expensive or their schedules less convenient.

    Airlines have through-checked bags for 80 years. I’m suggesting that it’s a bad idea to try to fence revenue with changes that make life harder on customers, e.g. the Australian who works out that they’re going to spend 2 weeks in the US on business and buys their tickets to the States but doesn’t know where they’re going to finish their trip so they buy their domestic flights later. Or customers who book an award ticket, could through-check if award space was actually available on American metal, but spend more money on American because of no award space… and are rewarded by not being able to through check because their award ticket is on an AA partner that’s outside of oneworld.

    If the airline feels that’s “over-entitled” then I’ve gotten the message that they don’t value loyalty and that’s their decision!

  10. Extra segments should earn extra RDM.

    It’s a nuisance to make a connection, which was partially offset by redeemable miles (and EQMs). As EP that was doubly. It was a very small gesture, without which it feels like a big chore.

  11. The itinerary are awful as well. Many of my searches to South America or Europe have 2 or more layovers in the middle of the night for almost 24 hours, with a transfer to alternate airports. Cumm’on American.

    I supposed a (almost) day layover in a city could be nice.

    And the fuel surcharges on British Airways are ridiculous. What’s the point of miles in this case.

  12. Surprised you didn’t mention the scandalously bad F&B service — especially in First and Business on long-haul international flights. Makes not only AA — but also the country of which it’s a flag carrier — look bad.

  13. The parallels i see here and when MileagePlus “devalued” are hilariously and shockingly similar.

    Admirals clubs are being updated, not sure where that came from. ORD has had a new AC near the eagle gates for awhile. LAX closed the AC for three days this past weekend for renovations (but left a corner open as a “flagship” lounge for top tier customers so they wouldn’t be left hanging)

    #7 is a interesting complaint, seeing how Delta doesn’t even have an award chart but nobody seems to care there.

    The reason million miler benefits have become “devalued” is because up until recently million miles were counted as all miles earned, not BIS miles. So you have three million milers out there who probably only have flown 500,000 miles. UA’s Mileage Plan only counts flights on UA metal towards million miler status, so getting lifetime global services is actually a lot harder, while AA still counts partner metal towards million miler status, so a potential million miler on AA could’ve flown only 100,000 miles.

    “consistent product” well A319s are getting retrofitted, and all the A321s are basically brand new it’s cost prohibitive and extremely expensive to throw out a relatively new cabin interior just to align seats. American went bankrupt remember, they can’t just start burning cash whenever they feel like it. United still doesn’t have a consistent product either, i don’t see you harping on them either. There is a difference between legacy UA/CO planes still.

    And operationally i don’t fault AA for the checked bags on separate PNR thing. If you want it through checked, book one ticket. Its operationally difficult to interline separate tickets…things invariably always gets lost and AA does not want to be on the hook for another carrier’s possible mistake. Southwest doesn’t interline to anybody and nobody seems to complain there.

  14. Great article that confirms my anecdotal observations. There are NO mile save award seats on American in business class from Boston to European destinations in August or September of 2017. If the Aadvantage program is no longer useful, there is no point in flying American from Boston. Most of the other airlines provide a superior product, often at a lower price. American has won the race to the bottom.

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