On net I think the details of how American AAdvantage 2015 plans to combine with US Airways Dividend Miles in the second quarter of 2015 is the best possible outcome we could reasonably have expected.
I did expect that the combined program would have 4 elite tiers (as US Airways has today, and as both Delta and United have as well) and would move to a system of unlimited complimentary upgrades or all members (though I don’t think that system is better for lower tier elites, because it pushes down their success in actually getting upgrades — a system that has them ration when they request upgrades means they are more likely to get upgrades when they do request it).
As far as what could have happened — award chart increases, going revenue-based like United and Delta, imposing minimum revenue requirements for elite status — American didn’t pursue any of those.
Instead they basically kept (at least for now, and for the immediate term!) the American AAdvantage platform that is great for members, and they’re folding US Airways members into that.
Nonetheless, there’s no way to combine different programs in a way that would make everyone happy and better off. Take upgrades: if you like a system that requires using a limited number of earned upgrade instruments then you would be unhappy with unlimited complimentary upgrades (which increases competition for a given upgrade seat). American had the former system, US Airways the latter. So unless they doubled the size of their first class cabins (and gave every member a pony!) any integration becomes bound to disappoint some members.
So I thought I’d outline who gains and who loses given the specific way American will be combining its program with US Airways.
Here’s how legacy American AAdvantage members fare when the programs integrate early next year:
- American Executive Platinum: It’s status quo for them, but they gain a fee waiver on same-day confirmed flight changes.
- American Platinum: It’s status quo for them as well, gaining unlimited complimentary domestic upgrades on flights of 500 miles or less.
- American Gold: While they get unlimited complimentary upgrades on flights of 500 miles or less, they now have to compete with Platinum members every time for upgrades on those flights since neither tier has to use 500 mile upgrade certificates anymore on those flights.
- American Million Milers: Thrilled that the program stays with 3 tiers — a lifetime Platinum (AAdvantage 2 million miler) remains mid-tier, instead of become “second from the bottom” as happened at United.
- American General Members: Primarily concerned with value of redeemable miles, the merger puts off major further changes to the award chart. With the introduction of unlimited complimentary upgrades for elites on flights of 500 miles or less, there will be fewer of these flights with empty first class seats — and thus fewer opportunities for a general member to purchase an upgrade at check-in (“Load Factor-Based Upgrades”)..
Here’s how legacy US Airways Dividend Miles members fare when the programs integrate early next year:
- US Airways Chairmans Preferred:They keep complimentary unlimited upgrades, and get them now on American’s route network. Thrilled that they go from 2 to 8 confirmed international upgrade certificates per year, and in 2015 can even get their normal two plus 8 when the programs combine. These members lose free companion upgrades (those require 500 mile upgrade certificates at American, but top tier American members don’t earn those complimentary). Still, they can use their windfall of confirmed upgrades to help out their companions if they wish.
- US Airways Platinum members: They’ll be mid-tier in the new program, instead of “second from the top” and they lose unlimited complimentary upgrades on flights over 500 miles. They also lose free same-day confirmed changes. And Platinums who fly 85,000 miles will no longer get the ‘Special Dividend’ choice of upgrades on domestic award tickets. They gain a 100% mileage bonus on flights, up from 75% in the Dividend Miles program. These are the members who probably do the least well with the integration.
- US Airways Gold members: They’re now mid-tier and not just “second from the bottom.” They get a 100% mileage bonus on flights up from 50% in the Dividend Miles program. They lose free same-day confirmed changes and unlimited complimentary upgrades on flights over 500 miles, but will likely see their upgrade percentage rise when they do request them.
- US Airways Million Milers: it’s now possible to go beyond lifetime Silver. And crossing new million mile thresholds means more upgrades.
- US Airways General Members: the only focus here is on value of miles. These members lose the virtually non-existent award rules of Dividend Miles (since those were more or less up to the vagaries of agents) and lose award chart sweet spots like 120,000 miles in first class to Hong Kong — although first class much farther South in Asia is still just 135,000 miles. They trade flexible award routings for one-way awards and recognize that without the merger their award chart would probably have gotten much more expensive. American’s award redemption system also has lower fees…
Which category of member do you fall into, what benefit do you care about most, and how do you fare with the changes?