Yesterday American Airlines announced a huge number of changes to their AAdvantage loyalty program, including much higher award prices for their most valuable redemptions in business and first class. The other changes affect how you’ll earn the miles to book those awards, as well as how some frequent flyers may find it easier to earn elite status.
More Elite Qualification Miles, Same Elite Requirements
The most positive news (for some) is that American will not be introducing a revenue component to elite status. You’ll continue to earn elite qualifying miles (EQM) without worrying about elite qualifying dollars (EQD) spent to purchase those tickets. This is different from the EQD requirements of United Airlines and Delta Air Lines.
Instead, American will begin adjusting the number of EQM you earn based on fare class: expensive fares will earn more EQM and cheaper fares will earn fewer EQM. Part of this change is the elimination of a separate accounting method known as elite qualifying points (EQP) that used to track fare class. EQM is now all that matters.
These changes actually make it easier to earn status. Because American is keeping the elite qualification requirements the same, and because you can still earn a minimum of 1 EQM per mile flown on all its flights, you will earn at least the same number of EQM as under the old model. If you also buy business or first class fares, you will earn more EQM than before.
The consequence is that more people will have status, jockeying for upgrades, preferential treatment, and shorter lines. I already have to wait 30 minutes in some cases to get a call back from the American Airlines Executive Platinum call center. Imagine how much worse that could get if some people are earning EXP by flying just 33,333 miles a year.
Finally, the membership year is also changing. Instead of running through February, your status will expire on January 31 of the following year.
Award Miles Will Be Based on Revenue
The most negative news (for some) will be that American plans to begin issuing award miles in proportion to the cost of your ticket and elite status. No longer will you earn 1 award mile per mile flown. Because each elite tier has a different fare multiplier, this replaces the bonus award miles that you used to earn.
An exact date for these changes was not provided. American is saying the middle of 2016. Until then, the current system of earning miles based on the distance traveled will continue.
I’ve outlined the new earning regime, as well as an example of how this will work on a sample round-trip fare from San Francisco to JFK, which is a total of 5,158 miles flown.
Award miles will be calculated using the base fare and carrier-imposed fees (such as a fuel surcharge) but excluding any government taxes or government-imposed fees. Looking two weeks out, I found a nonstop mid-week itinerary that costs $395.20 and calculated the base fare at just $341.40.
|Elite Tier||Miles per Dollar||New Total||Previous Total|
Important: These new rules replace the current elite bonuses. Gold members used to get 25% more award miles and Platinum and Executive Platinum members used to get 100% more award miles. The changes mean a higher bonus for everyone Gold and Executive Platinum members. Still, it’s fewer miles overall for most people.
|Elite Tier||Old Bonus||New Bonus|
So you can see that anyone who books cheap tickets, even those with elite status, will earn many fewer award miles under the new program. The only people who come out ahead are those who buy last-minute fares or fares that are normally expensive relative to the distance traveled. In addition, with fewer miles in circulation they may have a better chance at using those miles for an award.
United and Delta already implemented the same changes, so you might say American is playing copycat. However, because American is making it easier to earn elite status, it’s still possible you could earn more award miles with American than by defecting. I think this is a meaningful distinction.
Elite Benefits Will Also Change
There won’t be drastic changes to the benefits of status, but upgrades will become harder to get. In general, more elite members will mean more competition for the same number of seats. However, American will award fewer upgrade instruments that allow you to request a confirmed upgrade or add yourself higher in the queue.
If you earn status this year, in 2015, you’ll still get the same benefits you were promised for the 2016 program year. These changes affect what you’ll earn beginning January 1, 2016.
Executive Platinum members will now receive only 4 confirmed systemwide upgrades instead of 8 when they reach 100,000 EQM. You can earn an additional 2 upgrades for every additional 50,000 EQM. Remember that EQM are now easier to earn, so this may not be a bad thing for some customers. Of course, you would only earn EQM more quickly if you’re buying premium fares. 😉
Additional changes will go into effect on March 1, 2016, for 500-mile upgrades earned by those without Executive Platinum status.
Gold and Platinum members will continue to earn 500-mile upgrade credits that need to be redeemed to put themselves on the list. Previously they earned four of these for every 10,000 EQM. Now they’ll have to fly 12,500 EQM.
If you didn’t have any 500-mile upgrades, or if you need them for a companion, you could previously buy them for $30 each. Now the cost will go up to $40. You’ll also be able to buy 8 x 500-mile upgrades at once by redeeming 40,000 miles.
My Feelings Toward the Announcement
Are these changes bad? Yes, if you preferred the old order. Others who found it difficult to earn status might like the new changes. Even if you were happy as a clam, you might find this solution better than some alternatives. Delta and United chose to link status to your credit card receipt. American will still let you earn Executive Platinum just by flying long distances, regardless of the fare. Knowing that American would make some changes after completing its merger, I consider these changes to status among the best of possible outcomes.
As for earning and redeeming miles, that’s now on par with the competition — meaning American is no longer competitive in this space. I’m not happy about it, but I also don’t believe we can undo these changes. I’ll be thinking carefully about where I credit my American Airlines flights in the future, and whether I stash them with a partner like Alaska Airlines or just switch entirely to flying another carrier.