What American’s 2016 Loyalty Program Changes Mean for Premium Travelers and How to Delay the Inflation a Year
When AA announced the changes, news outlets assailed them; however FCF thinks the new program offers more value than before for many premium travelers.
AA loyalty members who buy economy tickets and upgrade to Business using miles will now earn fewer miles. For them, earning free upgrades will take longer. But premium class ticket buyers will earn more miles faster, so even with the increases in award-mileage costs, these travelers are, at worst, treading water when it comes to maintaining elite status and earning miles. (See charts below for details.)
Loyalty-Free Agents
The increase in award-mileage cost should have little effect on these travelers, as they have the option to transfer miles to other oneworld mileage programs, such as Japan Airlines. For more, see our Nov.,, Sept., and Aug. reports that explain how to get Business Class to Europe for only 3,000 more miles than economy and save up to 70,000 miles in First Class. Those of you who earn lots of miles on an AA credit card should rethink that in favor of Multi-Currency Cards (MACs). For more on which card is right for you, see our March report.
- On March 22, AA changes mileage-redemption costs for its own and partner flights. Business and First Class rates on international flights increase 3% to 63%.
- Starting in the second half of 2016 (no date released yet) award miles are earned based on ticket price, not flight distance and class of service as it is now.
- On the upside, no minimum spending required to earn elite status, unlike Delta and United, at least for 2016.
- Starting Jan. 1, Executive Platinums earn four systemwide upgrades for 100,000 EQMs (down from eight), and two for every 50,000 EQMs earned above 100,000.
- Starting March 1, Gold and Platinum elites earn four 500-mile upgrades for every 12,500 EQMs earned; the price of 500-mile upgrades increases to $40.
- On the upside, no change to miles and co-pay required for upgrades. Other changes outlined here.
For those who do not earn enough miles through credit card spending, and are looking for First Class travel on American, British Airways, Cathay Pacific and Qantas— which will suffer sharp increases in the new program from 26% to 63%—should begin to look at Alaska Airline’s program, which has buy-miles sales every two or three months. The same goes for Business Class awards on American—which will also increase from 3% to 28%.
How to Work the New Program Changes
American’s current program pricing expires on March 21. I recommend booking mileage awards before then for routes you may fly over the next year, even if you don’t know your exact dates. Why? Per an American media source, “We have advised our agents that voluntary changes to date/time only will be permitted without forcing new higher/lower award levels… This means the origin and destination need to remain the same”.
In other words, you can lock in current rates now by booking a “placeholder” award, and have up to a year to change the dates, yet still get the old program rates. (Changing the routing is a different story as you have to pay the difference in price between the current and new mileage rate.) AA imposes no increase in miles on date changes on award tickets; it does, however, charge a change fee if the new outbound date is within 21 days of departure, of only $75.
Now / March 22 Comparisons With AA’s New Program
Sample scenario fares below are based on Dallas-London shoulder season—9,504 miles round-trip
No Elite Status
| Class of service | Ticket Cost | Now | March 22 | Difference in Miles Earned | Impact | ||
| Earnings Based on Miles Flown + Class Bonus | # of Purchased Tickets to Net Biz Class Award | Miles Based on Fare Paid | # of Purchased Tickets to Net Biz Class Award | ||||
| Economy | $1,476 (N) | 9,504 | 11 | 7,380 | 16 | -2,124 / 23% less | Upgrading an economy ticket using miles will now earn fewer miles. Earning free tickets or upgrades will take longer. |
| Business | $4,093 | 14,256 | 7 | 20,465 | 6 | +6,209 / 43% more | Premium class ticket buyers earn more miles faster (5 miles per dollar spent), so even with the awardcost increase the effect is often a wash or even better. |
| First | $4,944 | 24,720 | 5 | +10,464 / 73% more | |||
Gold Status
| Class of service | Ticket Cost | Now | March 22 | Difference in Miles Earned | Impact | ||
| Earnings Based on Miles Flown + Class Bonus | # of Purchased Tickets to Net Biz Class Award | Miles Based on Fare Paid | # of Purchased Tickets to Net Biz Class Award | ||||
| Economy | $1,476 (N) | 11,880 | 9 | 10,332 | 12 | -1,548 / 13% less | Upgrading an economy ticket using miles will now earn fewer miles. Earning free tickets or upgrades will take longer. |
| Business | $4,093 | 16,632 | 6 | 28,651 | 4 | +12,019 / 72% more | Premium class ticket buyers earn more miles faster (7 miles per dollar spent), minimizing impact of award-cost increase. Earning will be close to that of Platinum status, a big plus for Gold elites. |
| First | $4,944 | 34,608 | 4 | +17,976 / 108% more | |||
Platinum Status
| Class of service | Ticket Cost | Now | March 22 | Difference in Miles Earned | Impact | ||
| Earnings Based on Miles Flown + Class Bonus | # of Purchased Tickets to Net Biz Class Award | Miles Based on Fare Paid | # of Purchased Tickets to Net Biz Class Award | ||||
| Economy | $1,476 (N) | 19,008 | 6 | 11,808 | 10 | -7,200 / 38% less | Upgrading an economy ticket using miles will now earn fewer miles. Earning free tickets or upgrades will take longer. |
| Business | $4,093 | 23,760 | 5 | 32,744 | 4 | +8,984 / 3% more | Premium class ticket buyers earn more miles faster (8 miles per dollar spent), minimizing impact of award-cost increase. However, Platinum elites no longer earn as many base miles as Executive Platinum elites. |
| First | $4,944 | 39,552 | 3 | +15,792 / 67% more | |||
Executive Platinum Status
| Class of service | Ticket Cost | Now | March 22 | Difference in Miles Earned | Impact | ||
| Earnings Based on Miles Flown + Class Bonus | # of Purchased Tickets to Net Biz Class Award | Miles Based on Fare Paid | # of Purchased Tickets to Net Biz Class Award | ||||
| Economy | $1,476 (N) | 19,008 | 6 | 16,236 | 8 | -2,772 / 15% less | Fewer miles earned on upgrades to Business from economy, so earning free awards or upgrades will take longer. |
| Business | $4,093 | 23,760 | 5 | 45,023 | 3 | +21,263 / 90% more | Premium class ticket buyers earn more miles faster (11 miles per dollar spent), minimizing impact of award-cost increase. Exec Platinum members now earn the most miles. |
| First | $4,944 | 54,384 | 3 | 30,624 / 129% more | |||
Travelers who earn lots of miles via credit card spending
| Now | March 22 | New Thinking |
|---|---|---|
| One of the best award programs in terms of cost and far better than Delta and United, AA currently charges 125,000 miles for First Class to Europe, while United charges 160,000. | Major increase on international routes for own and partner awards, for First and Business Class. | For First Class travel, transfer miles to other oneworld mileage programs which offer better mileage rates than AA, such as Japan Airlines (from Starpoints) or Cathay Pacific (Amex points). For example, New York-London First Class through AAdvantage will cost you 170,000 miles, whereas with JAL it will be only 85,000. (Burn your AA credit card if you havent already.) |
Travelers who practice the Buy Miles to Fly In Style Strategy
| Now | March 22 | New Thinking |
|---|---|---|
| Same as above. | Same as above. | For First Class travel on American, British Airways, Cathay Pacific, and other AA partners, Alaska Airlines offers better values through its award chart and buy-miles opportunities combo. |