Last night I posted about rumored changes coming to the AAdvantage program in 2016. While the changes haven’t been officially announced, this morning I shared the details of what the supposed new AAdvantage program will look like for 2016 and beyond. This is all based on information shared by the always knowledgable JonNYC.
I shared the program details earlier, and have been taking some time to digest the changes. View from the Wing just posted about these changes, and came to the following conclusion:
Ultimately these changes are probably as good as it was going to get – both in terms of notice (we do get a year warning they’re going to revenue-based earn) and changes (they really aren’t changing the elite program much). At least until any next shoe drops either in terms of award chart changes or restricted program benefits or mileage-earning on ‘basic economy’-type fares.
I’ve gotta be honest… I’d be hard pressed to disagree more. Here’s why:
American is going from first to worst with confirmed upgrades
My single favorite benefit of being an Executive Platinum member is that you earn eight systemwide upgrades for every year you qualify. There are no fare restrictions on these, so they’re hugely valuable.
Next year American will be cutting systemwide upgrades for Executive Platinum members in half, from eight to four. In my opinion this makes American less lucrative when it comes to confirmed upgrades than Delta or United:
Delta Diamond Medallion members receive:
- Four systemwide upgrades PLUS four regional upgrades
- OR 12 regional upgrades
United Mileage Plus Premier 1K members receive:
- Six systemwide upgrades (with fare restrictions)
- Four regional upgrades
- An additional two regional upgrades for every 25,000 EQMs, and an additional two systemwide upgrades for every 50,000 EQMs
One could certainly make the argument that American’s systemwide upgrade program is still as good/better than Delta or United. Personally I don’t buy into it, and I don’t think anyone could say “with these changes, American has the best international upgrade program for top tier elites without a doubt.” Which I think almost anyone would have admitted prior to this.
Get ready to see less business class on American!
Qualifying for status is getting easier… and that’s not good
Under the new program it’s actually getting significantly easier to qualify for status. Previously American had both elite qualifying miles and elite qualifying points. You needed to earn 100,000 of one or the other to achieve top tier status. That meant you had to fly either 100,000 butt in seat miles or 67,000+ miles in paid premium cabins. But you couldn’t mix-and-match the two.
Now that American is eliminating EQPs as a method of qualifying for status, it’ll be significantly easier to qualify, as you earn EQMs at the following (increased) rates:
- Full fare first & business class: 3 EQMs per flown mile
- Discounted first & business class: 2 EQMs per flown mile
- Full fare economy class: 1.5 EQMs per flown mile
- Discounted economy class: 1 EQM per flown mile
That’s good news if you wouldn’t otherwise qualify for status, but barring that it’s bad news, in my opinion.
This will likely increase the number of elite members, which makes domestic upgrades more difficult. That’s not a good thing, because upgrades actually clear on American, for the most part.
Could domestic upgrades become more difficult?
Two months notice isn’t sufficient
Two months really isn’t enough notice for these changes. View from the Wing seems to acknowledge that in his post, but also suggests that two months is apparently “as good as it was going to get.” 90% of people book travel within 90 days of departure, so at a bare minimum they should give that much notice of major changes, in my opinion.
With many people having already booked 2016 travel, I certainly don’t feel good about the fact that they’re making significant changes to the benefits for status next year, as well as the way miles are earned (towards the end of the year).
Delta gave nearly a year notice of similar changes, and that year also coincided with the program year. Announcing in February that a program will change for the following year is fine, in my opinion. But suggesting it could start mid-program year is disappointing.
Yes, American has been in the process of integrating so this hasn’t been a priority, but if that’s the case they should just wait another year. It’s not like they’re bleeding money, or anything…
Copying the competition isn’t “innovation”
During a recent earnings call, American President Scott Kirby said he was looking for “more innovation within the frequent flyer program.” Now I realize that’s just a marketing buzzword, but it’s still sort of disappointing what that seems to amount to.
American will be following Delta and United late next year in awarding miles based on revenue as opposed to flown miles, as follows:
- Non-elite: 5 redeemable miles per dollar spent
- Gold: 7 redeemable miles per dollar spent
- Platinum: 8 redeemable miles per dollar spent
- Executive Platinum: 11 redeemable miles per dollar spent
I’m not sure I understand how mindlessly following the competition counts as “innovation.” For years United has been using the “Delta see, Delta do” philosophy, and now American is getting on that bandwagon as well. Oh well.
What about an award chart devaluation?
An award chart devaluation is inevitable. So far we’ve learned about the changes being made to the AAdvantage program in terms of status and mileage earning.
I don’t think the fact that we know the above information means that there won’t be an award chart devaluation. I just think they’re not going to announce it all at once.
So yeah, if the award chart stayed the same for several more years, I probably wouldn’t be too disappointed by all these changes. But we have no reason to believe that’s the case.
These changes are expected… but let’s call them what they are
I’m not surprised by these changes. I sort of expected them, but I’m certainly disappointed by them as well. And I’m a bit surprised View from the Wing thinks these are “probably as good as it was going to get.” To quote Gary, I’d call that the soft bigotry of low expectations. 😉
Let’s be clear about what’s happening here:
- American is halving the number of systemwide upgrades that Executive Platinum members get, which is arguably the single most valuable top tier elite perk
- American is following Delta and United almost exactly in terms of awarding miles based on revenue as opposed to miles flown as of late next year; copying them exactly… zero innovation
- Elite qualification will get easier, which personally I don’t view as a good thing, since it will mean more competition for domestic upgrades
- Gold and Platinum members will continue to earn 500 mile upgrades, so won’t receive unlimited complimentary upgrades
- American doesn’t offer complimentary companion elite upgrades for top tier elites, unlike United (where the system actually works) and Delta (where it’s not very useful, since it’s just day of and at the gate)
Again, all of this doesn’t surprise me, but I strongly disagree that this is “as good as it was going to get.” They could have kept eight systemwide upgrades as an Executive Platinum benefits. Or they could have come up with some other innovative system for awarding miles. Or heck, they could have kept mileage earning as it is, because they system isn’t broken, and as they say, “if it ain’t broke, don’t fix it.”
Bottom line
These changes suck, and frankly, are disappointing. There’s very little actual innovation here, and top tier status with American has just gone from the most valuable of any of the “big three” US carriers, to arguably being average at best.
Again, none of which is to say that this is surprising. But secretly I was telling myself “well, maybe American will be different than the competition.” They’re not.
How do you feel about these changes? Am I off base?
I've been hitting Twitter as frequently as I can with how bad this is. The new program kicked in this month, and I've taken 3 trips from Dallas (2 to LA and 1 to NY). Last month I would have earned 15,436 miles. This month, I only earned 6,000 miles. They have shorted me 9,436 miles. Let's light up twitter using @AmericanAir to post your complaints.
Well, you certainly have hit on a sort spot. I do not agree that it will actually be easier (unless you're flying on company paid J or F class) to make EXP. I am a self-funded small business owner. I expect it will cost me twice as much in revenue to maintain EXP status, and that would have been one thing if the 8 SWU's had remained in place. This could well be my last...
Well, you certainly have hit on a sort spot. I do not agree that it will actually be easier (unless you're flying on company paid J or F class) to make EXP. I am a self-funded small business owner. I expect it will cost me twice as much in revenue to maintain EXP status, and that would have been one thing if the 8 SWU's had remained in place. This could well be my last year as EXP. With 8 SWU's I was able to figure out how to get EXP while doing double continent itineraries starting off in S. America and ending in Europe or Asia going through USA, spending very little time turning right upon boarding the plane (i.e. coach.) This will mean that, as one post put it, along with up to a 66% decrease in the number of miles (given his SFO-JFK ticket price example) alone with what I was actually looking for, a new award chart when I came upon this post it actually opened up recent wounds that had not healed. 6 SWU would be a reasonable number. Their million-mile program is behind even deltas, where you get 75K level for life at 4 MM miles. Until gives Global services for life a 4MM miles (1 notch above 1K) as well as a companion 1K for your spouse, complimentary and irrelevant to any miles flown. Thus, one could conceivably go with a family of 4 in coach and have the good possibility of upgrading two companions (for free, not with paid, soon to be increased in price 500 mile electronic stickers) as well as husband and spouse/significant other. For someone who does not mind searching for mistaken fares in I or A class (discounted business or first) which usually only last a few hours, I see that as they only way to maintain the type of flying that I was enjoying the past several years. Since I am platinum for life as well as Admiral’s Club for life, a deal that no airline would even match (I am not a billionaire who they give Concierge Key to without flying any miles), I am basically screwed, from what I can see. I will seriously think of United for my traveling needs when I move to Los Angeles from Miami, but that is a couple years off, and I will never make it to 3, what les say 4 MM miles. I wish I had given my allegiance to another airline (United) many years ago when I was flying 100,000 miles every year and would have had a chance to make it to 3MM miles and 1K for life. The math works out that I would have to live (with 217,000 lifetime BIS miles and 55 years old now) I would not achieve that until 82 years old (27 more years). I feel really sad that I gave so much loyalty to this airline (American) and now so many benefits are being taken away. It really makes me think that Parker has done the old "bait and switch" on his 30-year loyalty members. I really feel taken for a fool.
Seems to me it's getting harder to use the system-wides as well. Used to be able to book well in advance on some routes, now it's more a buy and hope for an upgrade ... Been executive platinum for a number of years but these changes have really made me question placing my loyalty with AA again this year. I too have had numerous complaints and no one seems to answer or care. Even the app has gone down hill.. Sad really.
So what effect does their changing the calendar mean? If I am qualified now for elite status (which expires March 1 2017), will they cut me off early (January 31) or will they let it run through the end of their new calendar? Seems like the latter is the only fair thing to do.
@ Jerry -- Status earned this year is still valid through February 2017.
This is terrible. For someone who is an elite traveller, EP. There is no value or good customer service to the most loyal customers. Where can we write to complain-- been very disappointed with AA lately. customer service reps are not knowledgable anymore and doesn't matter if you're EP or not, everyone boards at the same time! They call all of first class and every group together. What's the point in being loyal then to...
This is terrible. For someone who is an elite traveller, EP. There is no value or good customer service to the most loyal customers. Where can we write to complain-- been very disappointed with AA lately. customer service reps are not knowledgable anymore and doesn't matter if you're EP or not, everyone boards at the same time! They call all of first class and every group together. What's the point in being loyal then to an airline without the perks!!? Recently I have had numerous incidents where don't log in notes properly or Don't refer to notes from previous calls on issues to solve a problem. Anyone know how we can write to the CEO? Address?
I agree with Lucky. It will be way too easy to earn elite status. 2 EQMs for discount business class is just nuts.
Given EQMs will be falling like manna from the sky, so will SWUs. I'm not worried about having enough SWUs.
I am worried about three times as many Exec Plats competing with me for clearing SWU and domestic complimentary upgrades.
Actually AA doesn't need to change the award chart at all, they only need to play with the RDM formula (as mentioned in earlier posts) to reduce their financial exposure. And let's face it, this isn't about matching any other airline's devaluation per se, this is purely an operational fix to an accounting problem.
I can almost guarantee with certainty that those of us (you know who you are) who've booked and flown partner...
Actually AA doesn't need to change the award chart at all, they only need to play with the RDM formula (as mentioned in earlier posts) to reduce their financial exposure. And let's face it, this isn't about matching any other airline's devaluation per se, this is purely an operational fix to an accounting problem.
I can almost guarantee with certainty that those of us (you know who you are) who've booked and flown partner awards in international first and/or business are mostly responsible for this getting attention. You know as well as I do that when 'Bob' or 'Jane' in accounting saw the airline was paying partner airlines enormous sums of money for award seats, it was the beginning of the end. e.g. I priced out an award trip we took earlier this year, and for two business class tickets the retail cost exceeded $20k per person. I'm not sure what the formula for payment is, but even if AA only pays the operating carrier 25% they're still out a good amount of cash. Add people who rarely if ever fly on the airline, but who manipulate cc signups to procure gift cards using airline affinity cards, etc - well that's a compelling reason for them to start trimming/cleaning up the program overall.
Everyone just needs to switch to AS. They are not going to go revenue based. Their profits, and shareholders couldn't be happier. If it ain't broke why fix it?
@FlyerFun - I'm not trashed by UA's new program, I'm earning more miles than ever! So I'm not too worried about the effect of AA's program changes. But those flying exclusively on low-fare tix and gaming the system should be very, very afraid!
@Boraxo. You have no clue you are about to been be trashed by the new program along with everyone else. Amazing.
By the way, do you want to buy the Brooklyn Bridge. I can sell it to you cheap!
Noticed that American is sending out targeted offers of 60,000 mile bonuses after a $3,000 spend on the Citi Platinum Select. Thoughts on this?
Impressed by your frank assessment of the changes as I was expecting a rosy picture given your AA loyalty. A selfish part of me is glad AA is now basically at the level of Delta and United since I'm stuck with UA. I still think the Systemwide upgrades AA gives are superior to United because on personal travel I almost never spend enough to have a qualifying fare class for a Systemwide upgrade on UA...
Impressed by your frank assessment of the changes as I was expecting a rosy picture given your AA loyalty. A selfish part of me is glad AA is now basically at the level of Delta and United since I'm stuck with UA. I still think the Systemwide upgrades AA gives are superior to United because on personal travel I almost never spend enough to have a qualifying fare class for a Systemwide upgrade on UA to be usable.
Totally agree that the cut from 8 to 4 systemwide upgrades is terrible though and I think you'll come to see that the easier status qualifications will actually be one of the worst parts of the whole system for flyers like you at least. Whenever I fly UA for personal travel I see the issues with elite bloat but it really occurs across many facets of the program - fewer complimentary upgrades, worse service as phone and gate agents see elites as a dime a dozen, etc. United appears to be working on customer service in my personal experience at least as I've had a number of positive interactions recently but for the past two years I noticed a big downgrade.
Here's to hoping it doesn't become an arms race to the bottom as airlines see how much they can cut from programs without losing customers...
I am BA Sapphire with tons of Avios and just recently qualified for AA Platinum. Based on the west coast 90% of my travel is intercontinental and I have booked already enough flights to achieve (again) either BA Emerald or AA EXP by early summer. These upcoming changes made me rethink which program to pursue. At the moment the only advantage I see is to enjoy? the AA EXP benefits for around 7 months longer...
I am BA Sapphire with tons of Avios and just recently qualified for AA Platinum. Based on the west coast 90% of my travel is intercontinental and I have booked already enough flights to achieve (again) either BA Emerald or AA EXP by early summer. These upcoming changes made me rethink which program to pursue. At the moment the only advantage I see is to enjoy? the AA EXP benefits for around 7 months longer then BA Emerald. Any thoughts for a different strategy? Just wait until 2016 and then jump ship?
It is funny that Lucky put up the United advertisement on how many miles you earn. As a former loyal Continental/United customer 1K, for me the amount earned under the new chart is $0.
Flight side. Right now I look for reasons to fly because I need status on AA. I fly out of NY. My friend is feeling sad in SF, on the plane over the weekend to cheer him up. Visit my...
It is funny that Lucky put up the United advertisement on how many miles you earn. As a former loyal Continental/United customer 1K, for me the amount earned under the new chart is $0.
Flight side. Right now I look for reasons to fly because I need status on AA. I fly out of NY. My friend is feeling sad in SF, on the plane over the weekend to cheer him up. Visit my mother, Take AA at all costs, even if it is more expensive and doubles my flight time. Fly to Asia, AA is a great way to go. And of course, I always have my pocket calculator out to see what the net cost of each ticket, although often I do not fly the cheapest flight. If the AA executives in their infinite wisdom devalue to program enough, what do I do. (1) I reduce my flying by about 50%. (2) On cross country flights, Jet Blue and Virgin American are way nicer, I think I fly them. (3) On international flights, I fly the international carriers. If I want more legroom on long haul flights (over 7 hours), I pay up for Premium Economy with all my savings. (4) My spending on American will be minimal, unless they discounted that long haul business class to close to international Premium Economy prices.
Credit Cards. Right now almost all of my spend is on miles generating activities. You give me a 5% miles bonus such as the Freedom card, and I make a bunch of irrational decisions to make that bonus. Ditto with some of the other cards I have Amex Platinum, Amex SPG, Amex Everyday Spend, Citibank AA, Citibank Hilton, Barclay's AA, Chase Marriott, Chase Sapphire, and Chase United. [BTW, I spent the bonuses years ago. So it is pure spend.] Cash back card with no fees makes way more sense if point redemptions become revenue based. That simple strategy will save me lots of time, I will spend less, and probably net back more money.
Loyalty. If I change the above, even if the airlines go back to the old system, it would take me over 5+ years to reconsider. Also, once I no longer have status, I am not sure I am willing to start over again to gain status. Real people cannot turn these things on and off with a flick of the switch. In my opinion, gutting a program is more or less irreversible. Like United, even if they put everything back to the way it was and both Delta and American gutted their program, I am unlikely to go back to flying them in the next 5+ year time horizon. I would be committed to maximizing my new strategy.
Simulations. All the above is pretty much common sense. Instead of looking at revenue numbers as static with margins, they should hire some good simulation experts and run loyalty simulations. That is create a customer, give him attributes, and then see how he reacts to changes. I think they would be surprised what they would find. Unless they rigged the simulation, I think they would find the the old programs were good business and profit maximizing in the long term.
That is my two cents.
For those who are defending the gutting of the legacy FF programs as being done based on some sound business or economic plan, you are wrong. The airlines have no clue one way or the other whether the changes that they are making will ultimately prove profitable. They are making the changes simply because they can. It is a direct consequence of the oligopoly has resulted from a series of mega-mergers that has put better...
For those who are defending the gutting of the legacy FF programs as being done based on some sound business or economic plan, you are wrong. The airlines have no clue one way or the other whether the changes that they are making will ultimately prove profitable. They are making the changes simply because they can. It is a direct consequence of the oligopoly has resulted from a series of mega-mergers that has put better than 80% of domestic US commercial aviation under the control of just 3.5 airlines. Before the mega-mergers, when there was tougher competition for the same pool of flyers, the airlines had to try harder to earn customer loyalty, which they did by offering more and sweeter benefits. Now that they have achieved total dominance and have the flyers by the balls thanks to the mega-mergers, they are squeezing (ouch!) and working very hard to roll back most of those benefits...
Bottom line: Whenever for-profit companies stop trying to attract and retain customers, it means that the playing field has tilted dangerously in their favor... Time for the DOJ to intervene and try to undo some of the damage that they caused by approving the mega-mergers!
Maybe I am missing something here, but would someone please list all of the global international carriers that offer systemwide upgrades, and that are as generous as AA?.
The fact is, AA has upped their game with the hard products (which at HQ they acknowledge as the most important thing their pax look for in premium cabins) No one expects SQ or CX service, and do not look for it on ANY American carrier anytime...
Maybe I am missing something here, but would someone please list all of the global international carriers that offer systemwide upgrades, and that are as generous as AA?.
The fact is, AA has upped their game with the hard products (which at HQ they acknowledge as the most important thing their pax look for in premium cabins) No one expects SQ or CX service, and do not look for it on ANY American carrier anytime soon, if ever ;-).
With that said, AA feels they offer the best premium cabins (once completely refurbished) and so why continue to give away the store. They are now filling their premium cabins on core routes.
Americans and others nationalities have a choice. Fly AA or go over to UA or DL (if you can - they snicker) Fly foreign carriers and see how far you will get with your upgrade expectations.
THIS is what you get with mergers. LESS choice, less say....and well like it or lump it the future is here.
You want J or F, pay for it! This is the tone coming out of the airline HQ's as they consolidate their power against the public.
One day AA, DL and UA will merge and the end game will be nothing for free. Maybe its 50 years away if we make it to that point, but FFP's will be gone if the public continues to allow these mergers and for corporations to fuck us all!
@DavidB - Everyone has different circumstances so they will evaluate these changes differently. I am the opposite of the majority you describe. My J/F flights are mostly paid by me and my economy flights are mostly reimbursed by clients. The reason I would leave AA is that if they are going to cut SWU's and cut RDM's, and add those "enhancements" to their already high fuel surcharges and extremely poor award availability - why should...
@DavidB - Everyone has different circumstances so they will evaluate these changes differently. I am the opposite of the majority you describe. My J/F flights are mostly paid by me and my economy flights are mostly reimbursed by clients. The reason I would leave AA is that if they are going to cut SWU's and cut RDM's, and add those "enhancements" to their already high fuel surcharges and extremely poor award availability - why should I care about miles anymore? Why wouldn't I just pay for F/J and pick the airline that has the bet ticket price, the most convenient schedule and the best operation? Right now, because of AAdvantage, when I buy tickets they are always on AA/OneWorld - but if miles are going to be hard to earn, hard to use and come with $1,000 in "fuel surcharges", I can't see why I would care about loyalty unless they have some new benefits they are planning to reveal, particularly since I am often paying for F/J already.
For the "it's a business' folks above, anytime there are changes like this, the comment thread has a few overly condescending comments from people who feel like they need to enlighten everyone by explaining that "it's a business", apparently they think they are the only ones that realize that. We all know that, but thanks for being the 1,000,000th person to point it out. I run a business too, and when I decide whether I want to spend $1,000 - $4,500 for a plane ticket, I evaluate several factors. Historically, the loyalty program has been an important factor, but it has become less and less important for the past several years due to cuts in benefits and increasingly difficult to find awards. ALL of the AAdvantage changes that we currently know of diminish the value of the loyalty program, which means to remain loyal I need to see something else that enhances the value of consistently choosing AA over DL, UA, BA, LH, JetBlue et al. - because I run a business just like AA does. And running my BUSINESS requires that I pick the provider with the best value proposition.
It's been said already but it looks like it's not registered. Look at the maths and compare how many miles you earned this year to how how many you will get as Base plus bonus under the new chart!
As a Plat I checked some of the routes I fly and I stand to lose at least 50%!!! That's before the devalue the redemption chart.
Its been marginal for some time. It does look...
It's been said already but it looks like it's not registered. Look at the maths and compare how many miles you earned this year to how how many you will get as Base plus bonus under the new chart!
As a Plat I checked some of the routes I fly and I stand to lose at least 50%!!! That's before the devalue the redemption chart.
Its been marginal for some time. It does look like the three major only want to compete on price and personally that's what I'll do. It's them who stand to lose out once we ignore ff programs and buy whatever is cheaper and more convenient.
@DavidB
AA was in Chapter 11 Bankruptcy proceedings when it merged with US Air. Previous shareholders had already been wiped out prior to the company's filing for Chapter 11 protection.
The current shareholders are most likely not the ones who have hung in there. Shares of major airlines have never made money over the long term for shareholders. At best, they are trading vehicles if you are fortunate enough to be on the right side...
@DavidB
AA was in Chapter 11 Bankruptcy proceedings when it merged with US Air. Previous shareholders had already been wiped out prior to the company's filing for Chapter 11 protection.
The current shareholders are most likely not the ones who have hung in there. Shares of major airlines have never made money over the long term for shareholders. At best, they are trading vehicles if you are fortunate enough to be on the right side of the trade.
The reason why the 3 major US carriers are doing what they are doing is that they are now an oligopoly and the consumer is left with limited if any switching choices.
Since the majority of complaints are coming from those elites buying low fare economy tickets (those that buy full fare and premium are actually just fortunate to be working for employers who pay the bill), and these same people are expecting to find a better OW program...think again, AA will still be far ahead of any alternatives since these airlines have already cut back on RDMs (and EQMs) for discounted economy fares. Not to mention...
Since the majority of complaints are coming from those elites buying low fare economy tickets (those that buy full fare and premium are actually just fortunate to be working for employers who pay the bill), and these same people are expecting to find a better OW program...think again, AA will still be far ahead of any alternatives since these airlines have already cut back on RDMs (and EQMs) for discounted economy fares. Not to mention moving to LAN or Cathay or BA will lose those benefits elites enjoy on their domestic flights, like under 500 mile upgrades (space available of course, but this is the same with UA or DL) or 500 "sticker"/comp on longer flights. Moving to STAR isn't as great as it looks, given UA beat AA to the reduced RDMs based on spend, plus the elite spend requirements. not much to gain here. And most STAR programs have similarly restricted earning any miles on many discount fares (how many UA elites have fallen prey to the infamous K-fare which is ubiquitous on STAR codeshares but earns no miles when flown on any carrier other than UA...and even codeshares with UA flight numbers on other STAR carriers earn no miles on this fare unlike AA's policy).
As for reducing the number of eVIPs, let's wait until we know the full details. Yes, there will be fewer F and J seats as the aircraft refurbs go through, but they'll be well worth upgrading to. And why not ration a better product -- as well as create incentives to actually sell that product before giving it away?
As for the comment about shareholders, if it weren't for them hanging in through the difficult years where airlines seldom made money let alone paid dividends or increased the value of their shares, they're the ones who've given you the generous benefits in the past and now they're expecting a bit of give-back.
Thanks Ben for the depressing news.
What I am most upset about is the lack of advance notice. Today is November 7 and yet, there are still no updates. If this new earning period will begin on January 1, 2016, we will not even get two months notice. Also AA has mislead us from all their PRs using terms like innovations and other bull crap. In the end, they are almost copying the earning...
Thanks Ben for the depressing news.
What I am most upset about is the lack of advance notice. Today is November 7 and yet, there are still no updates. If this new earning period will begin on January 1, 2016, we will not even get two months notice. Also AA has mislead us from all their PRs using terms like innovations and other bull crap. In the end, they are almost copying the earning chart from Delta Sky Pesos. With no advanced notice and these misleading PR statements, I am mad as hell. Plus I have actually bought a Finnair YYZ-HEL-BKK-HEL-JFK RT in January, so I might have chosen Star Alliance if I know this is upcoming.
To me, American Airlines has really gone downhill since Doug Parker has taken over. Yes the new J seats are nice, but in general, service has gone downhill and catering really suffers greatly even with some of the items bringing back. International premium catering is just horrible and the difference between F and J is minimal. Many F enhancements like amuse bouche and more interesting glassware were eliminated within a year after its implementation. Second meal no longer has real linen to line the tray and table. Most pre-arrival meals look like an enhanced coach meals.
I am a 4MM EXP, so will get lifetime Platinum, but being an Emerald really gives me access to first class lounges and check-in, which I like. I am one of those few people, who rely on the point system to get me to EXP, but this new revenue miles system may benefit me, as a first and business class flyer. However, I am disappointed that discounted business class (A/P) will earn only 2 miles per $. Sure it is somewhat discounted, but discounted first class still means $4000 and above RT ticket.
My ultimate worry now is the partner airline earning chart. I earn half of my points on flying its Oneworld partners. In some ways, I like AA because I earn full miles when I fly AY/BA/IB/CX/JL/QF/MH/UL... plus elite bonus, unlike Delta (which does not even respect its partner KE) and United. If that is being taken away, I will give up on AA immediately.
Ben... I wonder if you can do a post on recommending other Oneworld partners' mileage program, in terms of attaining status and redeeming awards - BA Avios/CX Marco Polo Club/JL...
Thanks for the posts!
Adrian
Hi Ben. Thanks for the advance notice. Do you think there's any point for EXP members to protest the 50% reduction in SWUs with Aadvantage customer service? If so, would you do so now or after the changes are announced?
There's a difference between "mindlessly copying" the others and making a business decision that they'd be better off if they had a similar program...
As you've provided precisely zero evidence that this change won't benefit AA, I hardly see how you can be so judgemental... Call them out for not being innovative yes, complain it disadvantages you yes, but you have no idea how this is going to affect their business (which is all they care about) - they do.
*ninth
Clearly elites are not that important to the airlines despite the self importance professed by the elites. In the hindsight they just seem to be bunch of drama queens.
The good thing is more people would be open to overseas carriers flying fifth freedom. Write to your congressmen and tell them, we want more competition in the air.
@lucky, you're spot on. This is a disaster (for me). I am currently AA Platinum. I fly 60k miles on just a few international longhaul flights. The AAdvantage program was ideal for me because it gave me lounge access and a lot of redeemable miles. I spent extra money and took inconvenient routings to fly with AA. Guess those days are over! UA sounds more and more attractive, especially with Star Alliance Gold.
Sorry but only a selfish arrogant prick can say that making it easier to qualify for status is a bad change!
@Lance Vi,
Totally agree. That pretty much sums it up. How about some cheese with that whine, folks?
@Return I always love reading these guys who are condescending and patronizing in their replies. As to a business, the only reason Airlines are still here is because fuel has dropped 50-60% and they've figured out how to charge for air. So save me the sanctimonious comments about shareholders, that's idiotic. However ,it will get worse before it gets any better and the only event that may impact carriers is another 2008/09 event.I don't have...
@Return I always love reading these guys who are condescending and patronizing in their replies. As to a business, the only reason Airlines are still here is because fuel has dropped 50-60% and they've figured out how to charge for air. So save me the sanctimonious comments about shareholders, that's idiotic. However ,it will get worse before it gets any better and the only event that may impact carriers is another 2008/09 event.I don't have to fly like most of you thank god. It just isn't any fun anymore for a number of reasons and finally if you want to make money in the market I can think of 30-50 stock groups where you are far better off than airlines
Does this also change the Million Miler program or does that qualification remain butts-in-seats miles flown?
@keith - It's definitely not true that the rest of the world "already is revenue-based." Star Alliance is made up to 27 members, practically everyone of which, save for UA, still awards redeemable miles based on distance traveled. Discounted tickets earning less than 100% RDM and premium tickets earning more than 100% RDM was a feature of many distance-based legacy FF programs for years, as a way of rewarding folks who paid more for their...
@keith - It's definitely not true that the rest of the world "already is revenue-based." Star Alliance is made up to 27 members, practically everyone of which, save for UA, still awards redeemable miles based on distance traveled. Discounted tickets earning less than 100% RDM and premium tickets earning more than 100% RDM was a feature of many distance-based legacy FF programs for years, as a way of rewarding folks who paid more for their tickets [which is why DL's and UA's claim that the revenue system is designed to reward "high-value customers" is simply a fig leaf to justify disenfranchising most flyers who cannot afford premium tickets].
The FF system used by the rest of the airlines -- at least those who are *A members -- is not by any means revenue-based as recently implemented by DL and then UA, where the ticket cost and not distance traveled (or a proportion of it depending on fare class) and elite status are the sole determinants of the number of redeemable miles earned.
@DCS: It already is revenue-based for the rest of the world. There's a reason why people were flocking to US FFP's even if people lived abroad or flew other carriers. 25% for discount economy is standard in most international FFPs. BA, CX also have revenue-based elite-status. In this regard, even UA/AA/DL giving 100% tier miles per mile flown is generous in comparison.
If the dAArk side does gut their FF program as rumored, AAdvantage would indeed become as bad as or even worse than DL's notoriously unrewarding FF program -- and that's before we even know whether or not the AA award chart would also be gutted. The result would be that United MileagePlus would likely become the better FF program, by default.
As a UA 1K who passionately hated UA's adoption of the revenue-based system (r-b.s.)...
If the dAArk side does gut their FF program as rumored, AAdvantage would indeed become as bad as or even worse than DL's notoriously unrewarding FF program -- and that's before we even know whether or not the AA award chart would also be gutted. The result would be that United MileagePlus would likely become the better FF program, by default.
As a UA 1K who passionately hated UA's adoption of the revenue-based system (r-b.s.) and had even created an AAdvantage account ready to jump ship to AA if they did stick with the legacy mileage-based FF system, I will stay put if the rumored changes should come to pass. As @Lucky just argued convincingly, the rumored changes do truly suck, so that sticking with UA would make sense as MileagePlus would then seem to me to be like the least "evil" program, in addition to being the devil that I already know. Even after UA "gutted" their partner award charts, the redemption of UA miles for *A award travel have remained among the top in the business because the large number of partners offers near limitless options. That alone would be another incentive to stick with UA...
OMAAT is right and VFTW, the "Thought Leader in Travel", is totally wrong in claiming that the rumored changes are "probably as good as it was going to get." It could definitely have been a lot better in many different ways, including not changing anything at all!
The remaining question -- probably largely rhetorical -- is how long it will be before the entire world converts to the revenue-based FF system if or when it does become the FF system for the US Big Three....
For me it comes down to my domestic upgrade % and upgrade priority based on time of ticketing. If either changes then that would be bad for me - and I likely would just fall back to UA with Lifetime 1K. But keep the upgrade % and priority for EXP based on ticket purchase time - then I am OK with new program.
The change to revenue based FF is inevitable. Flying from DFW to TPE would net ~16,000miles round trip. So one would only need to take 5 of those trips in Econ to earn enough miles for a free trip on Econ. That's a 20% discount
Thank you. This is a great honest piece.
Lets face it this is a huge blow to the value of the advantage program. And as you say, this is just the beginning, as I am sure we will soon see a similarly large devaluation in the value of the points next.
I agree! Why would you make it easier to achieve EXP level status? Indeed, upgrades will be more challenging to get, especially when AA will have less premium seats than Delta and United. AA is reconfiguring all its A319s with 8 First Class seats, compared to 12 on Delta, and AA's A321s only have 16 First Class seats, compared to 20 on Delta's equivalent aircraft (737-900ER) and down from 22/24 on the 757s. Very disappointing...
I agree! Why would you make it easier to achieve EXP level status? Indeed, upgrades will be more challenging to get, especially when AA will have less premium seats than Delta and United. AA is reconfiguring all its A319s with 8 First Class seats, compared to 12 on Delta, and AA's A321s only have 16 First Class seats, compared to 20 on Delta's equivalent aircraft (737-900ER) and down from 22/24 on the 757s. Very disappointing development, not to mention the reduction in the number of systemwide upgrades.
The reduction in redeemable miles earned is a major blow. It puts aspirational redemptions out of reach for many, or at least far fewer award trips for your loyalty. I think it will be an even uglier picture when they update the award chart.
What this draws into sharp relief is that credit card loyalty (or gaming, actually) is far more rewarding than Airline loyalty. You could spend 100,000 butt-in-seat miles flying in their...
The reduction in redeemable miles earned is a major blow. It puts aspirational redemptions out of reach for many, or at least far fewer award trips for your loyalty. I think it will be an even uglier picture when they update the award chart.
What this draws into sharp relief is that credit card loyalty (or gaming, actually) is far more rewarding than Airline loyalty. You could spend 100,000 butt-in-seat miles flying in their crappy coach seats and instead of being rewarded with a business class award to Japan and back in JAL (what you can redeem for now), you would only have enough redeemable miles for a saver award in AA economy between Chicago and Dallas (ignoring for the moment that AA doesn't seem to release saver econ award with direct routings, so you would probably have to connect in Charlotte and it would take you 9 hours).
I think that the writing has been on the wall since the DOJ allowed the merger with USAirways. There is no need to compete when you can collude. All other things being equal, Delta actually flies their planes on time and doesn't cancel their flights the night before departure just because there aren't enough seats purchased (I'm looking at you American Eagle), so for many people who need reliable transportation, that seems a more natural choice. When none of the FF programs are as rewarding as spending on their co-branded credit cards, I'm not sure why us non-road warriors would bother with allegiance to one program over another.
Etihad is great if you can find availability in F. So far no luck for me. I have found space on Emirates though. Would like to try Etihad at least one way.
Rob
Yes, the changes suck for the miles/status-gaming community, of which I am a part. But makes sense from the perspective of AA since they want to reward their most profitable customers, not people booking $300 8-segment flights for 10000 EQM and 20000 redeemable miles.
This post shows an entitled perspective, as if we have a right to miles/status optimization and loopholes. I like the game as much as anyone else and have taken luxurious...
Yes, the changes suck for the miles/status-gaming community, of which I am a part. But makes sense from the perspective of AA since they want to reward their most profitable customers, not people booking $300 8-segment flights for 10000 EQM and 20000 redeemable miles.
This post shows an entitled perspective, as if we have a right to miles/status optimization and loopholes. I like the game as much as anyone else and have taken luxurious trips I would never pay for out of pocket, but to rail on the airline for making decisions to maximize profits instead of leaving the gameable status quo is silly.
Do you work at American? How do you know all of these changes to be fact?
Come on stop whining..... Look at the brighter side: They still have Etihad and Qatar as redemption partners :)
Dang Lucky! I was gonna switch to A next year with my promotional plt status... Maybe I shouldn't?
@Another Steve What makes you think if you take some FF out of first that they will be able to sell those seats. Your assumption is that the upgraded seats could sell for cash? I doubt service will improve based on this also. Those bean counters from US airways will go back to soy nuts to save a buck
I did not understand the statement about plat unlimited upgrades? As a lifetime plat I never got a dingle upgrade to first unless using stickers. I am glad you are fiery about the changes. Even if the award chart doesnt change, AA has been raising point rates on redemption for a while now. Low level just doesnt exist on many routes no matter how far out you look. All the noise directed at Delta but American will follow a similar path.
I'm with Horace: Boo hoo for you.
First off, I'd rather have the four systemwides rather than play United's upgrade lottery on the higher fare differentials.
At the end of the day, this probably takes some of the fun out of mileage running for status, but it is a very good structure for the AA's more profitable customers and high-yield flyers, which is what they should be rewarding for long-term health as a company.
@horace, @stephen, @michael
+1
You could say these changes will recalibrate things a bit and "frequent" flyers and "elite" flyers may become closer to being synonymous. Hard luck for boardingarea elites may well mean advances for folks humping it on the grueling biz travel treadmill
How does this affect AS elite members if at all?
@Ken, you said November 6, 2015 at 5:16 pm
"Miles earned for JFK-SFO (round trip) under the current system:
General Member 5,172
Gold 6,465
Platinum 10,344
Executive Platinum 10,344
Miles earned under NEW 2016 system:
Cost of my ticket last week: $323.72 + $52.48 taxes/fees = $376.20
General Member (5 x $323.72) 1,619 miles
Gold (7 x $323.72) = 2,266 miles
Platinum (8 x $323.72) =...
@Ken, you said November 6, 2015 at 5:16 pm
"Miles earned for JFK-SFO (round trip) under the current system:
General Member 5,172
Gold 6,465
Platinum 10,344
Executive Platinum 10,344
Miles earned under NEW 2016 system:
Cost of my ticket last week: $323.72 + $52.48 taxes/fees = $376.20
General Member (5 x $323.72) 1,619 miles
Gold (7 x $323.72) = 2,266 miles
Platinum (8 x $323.72) = 2,590 miles
Executive Platinum (11 x $323.72) = 3,561 miles
As an Exec Plat the difference is 10,344 miles currently vs. 3,561 miles earned next year."
You are referring to redeemable miles here, right? The elite program is based on butt-in-seat miles, which for this trip, would still be 5,172 miles roundtrip. So one would need 100,000 / 5,172 = 20 roundtrips and one would be EXP. The redeemable miles would be 3,561 * 20 trips (at this fare you listed) = 71,220. So I would expect to see 100,000 butt-in-seat miles plus 71,220 = 171,220 redeemable miles in my account. Correct? Thoughts anyone?
The supposed AA program changes conform pretty much to the programs already in place with DL and UA in the oligopoly that the US airline industry has become. Why would anyone have expected AA to differ dramatically from the other two?
As a 2 million miler on AA (and therefore Platinum for the of the program) , I am not surprised at all at the changes.
This is why oligopolies are dysfunctional and...
The supposed AA program changes conform pretty much to the programs already in place with DL and UA in the oligopoly that the US airline industry has become. Why would anyone have expected AA to differ dramatically from the other two?
As a 2 million miler on AA (and therefore Platinum for the of the program) , I am not surprised at all at the changes.
This is why oligopolies are dysfunctional and why lack of meaningful competition hurts the consumer and not the provider.
As someone who travels a lot for business, I think the changes are positive.
If you are more profitable to an airline, then I do think you should be rewarded accordingly. That is how every other loyalty program works.
I don't understand why distance should matter for RDM, if what the airline really cares about is the dollar amount brought in.
There is an upside to moving to a business model where most of the F and J seats are paid...more competition and higher quality of service. At least part of the reason US domestic F sucks as bad as it does is that for the past 20 years very few of the passengers in that cabin have been paying a premium for it.
If y'all think Alaska is going to escape this, go look at what base RDM/EQM AS awards on a DL E fare.
25%.
Goes up to 50% or 75% on most of the reasonable fare classes, but it's still a hit. I don't see how AA is going to be willing to pay 100% AS mileage on cheap fares once they go to RDM based on revenue.
Nowhere to run to, baby, nowhere to hide....
If y'all think Alaska is going to escape this, go look at what base RDM/EQM AS awards on a DL E fare.
25%.
Goes up to 50% or 75% on most of the reasonable fare classes, but it's still a hit. I don't see how AA is going to be willing to pay 100% AS mileage on cheap fares once they go to RDM based on revenue.
Nowhere to run to, baby, nowhere to hide. With the POSSIBLE exception of AS metal crediting to AS (and that is a thin reed to lean upon), by 2017 every major airline in the US will be crediting RDM based on fare, not miles flown (AA/DL/UA), or doing some other version of rebate (WN, VX, B6).
Mileage running was fun while it lasted.
Redemption rates are not affected... yet. It'll happen, they are way too out of sync with Delta, UA and even Aeroplan.
I predict Alaska will change AA earn rates as soon as AA does. They were the first to fall in lockstep with Delta and BA's changes. I'd expect similar earn rates to existing Delta rates (with the side benefit of putting preference on AS metal)
If you come at it from the pov that the ideal AA customer is a business traveler who buys J class to travel overseas and then uses an evip to upgrade to F, there is logic in shrinking the number of evips in half since the number of available international F seats will shrink dramatically next year as the 777-200s are reconfigured.
Once I hit LTPLAT a few's years ago. I've been flying price every since. Just flew EK F BKK DXB LAX then bought an A fare to Dallas on AA. I do not play the upgrade game and have not for sometime. Delta has been very smart about this. 75% of the time Delta F has been the same price as AA Y into and out of DFW (in markets I fly) AA is just...
Once I hit LTPLAT a few's years ago. I've been flying price every since. Just flew EK F BKK DXB LAX then bought an A fare to Dallas on AA. I do not play the upgrade game and have not for sometime. Delta has been very smart about this. 75% of the time Delta F has been the same price as AA Y into and out of DFW (in markets I fly) AA is just now catching on that people will buy A fares and cheap I fares international. Stop pricing DFW HKG at 8-9K RT price it 4-5K and I will buy business all day long.
3 years ago I spent almost $50K on AA and did not make EXP. Yes it does happen. I applaud AA. Sorry Ben you want F pay for it.
Why are you fighting for those upgrades? :) I am from Europe and probably have differnet standards...i flew aa business, both domestic and international (the new 777). It's appalling. Anything that is given for free is. Nobody gives you free upgrades in Europe.
I wouldn't waste a single dollar or mile to fly aa business. I'd consider qualifying for exec plat, if their premium classes were worth it.
I'll probably get flamed for this, but I think AA should have made it harder to get EXP. There's so many of them now. I think EXP is the new Platinum while Platinum is the new GOLD. AA is giving us the meat now. The vegetables come next: partner and redemptions. If I had to guess, this is this where the real hit comes.
----------------------------
Andrew says:
November 6, 2015 at 4:59 pm
3) Personally, I think upgrades as EXP will become harder but not for the reason you seem to suggest. I’ve noticed recently that AA has been pricing its premium cabin at lower prices than it used to. If this recent trend continues, it may not be so much the increased number of elites but fewer upgrades available that make upgrading more difficult.
...
----------------------------
Andrew says:
November 6, 2015 at 4:59 pm
3) Personally, I think upgrades as EXP will become harder but not for the reason you seem to suggest. I’ve noticed recently that AA has been pricing its premium cabin at lower prices than it used to. If this recent trend continues, it may not be so much the increased number of elites but fewer upgrades available that make upgrading more difficult.
-----------------------------
This is spot on, I don't think that it's going to be the added EXP's that keep people from getting upgrades...it's the added revenue passengers in F/J. Nearly every time I've flown in F/J this year it has been on a paid fare, and when I look at the seat maps 2 weeks out and see 50%-75% of the F cabin full, and then see who is in those seats, I am pretty confident that there are A LOT of people who are just saying F-it to the upgrade game and just spending 50% to 100% more for a paid seat. In the long run this is good for the revenue/seat mile, but it will reduce loyalty substantially. If I am going to pay for F/J every time, I don't need the benefits that they whittle away each year.
The revenue based RDM is the game changer. It is very misguided to be somewhat relieved that elite benefits and method of earning status haven't been massively changed. Revenue based RDM late next year is a slash in elite benefits for all but a few of the 'somebody else is paying' crowd. It's simple math that folks seem to be ignoring. Ask UA and DL elites flying on cheap tickets--they can tell you the math.
The revenue based RDM is the game changer. It is very misguided to be somewhat relieved that elite benefits and method of earning status haven't been massively changed. Revenue based RDM late next year is a slash in elite benefits for all but a few of the 'somebody else is paying' crowd. It's simple math that folks seem to be ignoring. Ask UA and DL elites flying on cheap tickets--they can tell you the math.
At least this post calls out AA. Certain bloggers are AA shills and will never call out AA as they don't want to risk their cozy relationship with AAdvantage.
To be honest, I do not understand the fuss. The number of SWU's decreasing is a sting, but that is about it. As an EXP, rarely do I fly coach. I would expect to stay the same moving forward based off of these still unannounced changes.
The fact that points qualification will disappear does not mean there will be more elites. It may actually mean that there will be less. Flying 100k miles a...
To be honest, I do not understand the fuss. The number of SWU's decreasing is a sting, but that is about it. As an EXP, rarely do I fly coach. I would expect to stay the same moving forward based off of these still unannounced changes.
The fact that points qualification will disappear does not mean there will be more elites. It may actually mean that there will be less. Flying 100k miles a year is not an easy challenge, and I just don't see people lining up to do it. Or at least, a sizable crowd.
If I were platinum or gold, I might be upset about the increased mileage to earn upgrades. That's fair, I guess.
Let's all be big boys and girls about this change and see how it turns out.
Lucky so who's program are you choosing following these changes? Sticking with American?
And this, folks, is another byproduct of mergers and less competition in the marketplace. The consumer ALWAYS loses.
I don't have Elite status, nor will I ever achieve it. What I want to know is "when" the Award chart will be devalued so I can book tickets asap. I only fly economy, but there're 3 of us in our family, so I can really stretch our miles. If the chart is going to be devalued, as a customer of AA I prefer to have months of advance notice. It would suck royally if...
I don't have Elite status, nor will I ever achieve it. What I want to know is "when" the Award chart will be devalued so I can book tickets asap. I only fly economy, but there're 3 of us in our family, so I can really stretch our miles. If the chart is going to be devalued, as a customer of AA I prefer to have months of advance notice. It would suck royally if an award devaluation were happening starting Jan 1, 2016. So for me, THAT's the missing info I want to know.
First of all AA has been offering bonuses on premium fares that pretty much accelerated the earning of status and RDMs to compete with the DL and UA revenue-based models. So these changes for EQMs really won't swell the ranks all that much beyond what they've been with the addition of US and status match elites. I've not noticed much change in my upgrades as an ExecPlat from two years ago to this year.
As...
First of all AA has been offering bonuses on premium fares that pretty much accelerated the earning of status and RDMs to compete with the DL and UA revenue-based models. So these changes for EQMs really won't swell the ranks all that much beyond what they've been with the addition of US and status match elites. I've not noticed much change in my upgrades as an ExecPlat from two years ago to this year.
As to the reduction in eVIPs, you omit the reference to the ability to earn additional ones. We don't know how this will be done, but I'd figure AA might like to incentivize Plats to go for ExecPlat and to do so offer a pair of eVIPs at 75K and another pair passing through 100K (in addition to the new four for requalifying for 2017 status...and additional pair at every 50K EQM mark beyond that (as UA does). So let's see what that detail is before condemning the move outright. Remember, an eVIP is only as good as the inventory released, and as a UA 1K as well, I know that trying to get a SWU to clear at booking these days is a rare event. So having paid a higher fare on UA, you're still not assured of that upgrade and are playing a roulette game.
It would be ingenuous of you and others around here to complain about the enhanced EQMs earned from premium fares because you know there are still some sweet spots in this area that make them even more attractive for Mileage Runs.
Change was bound to come but I've seen a lot worse...like over at Aeroplan where the elite program (now called Altitude) was systematically destroyed a year after it won MielPoint's first Best FF Program of the year! So some of us have been through a lot worse. And compared to programs of foreign airlines (that you love to fly in their front cabins, guzzling down Krug and Dom, likely on the miles you earned with your American FF programs) AAdvantage is still superior on so many counts.
Outstanding post. I doubt many of the UA and DL flyers who crossed over to AA last year are about to return, yet your warning about the inevitable downgrade on the AA award chart is a timely one for me to apply them wisely very soon.
Ben, In what way do you think this will affect AS? Do you think they will fall in line as well?
Look we should all be thankful the airlines haven't decided to reward real loyalty and base elite status solely on segments. After all if I'm an EXP and the only route I fly is DFW-PEK then I'm only needing 15 segments to get to 100k miles whereas the EXP who only flies DFW-ORD would need 125 segments. It seems to me, as a business the guy I'd want to reward as a customer is the...
Look we should all be thankful the airlines haven't decided to reward real loyalty and base elite status solely on segments. After all if I'm an EXP and the only route I fly is DFW-PEK then I'm only needing 15 segments to get to 100k miles whereas the EXP who only flies DFW-ORD would need 125 segments. It seems to me, as a business the guy I'd want to reward as a customer is the ORD guy.
Yeah sure this sucks if you're someone who flies the 100k mostly in mid to long haul, on Y fares and upgrades to J/F. But it's great for those who fly 50k-75k miles in paid full Y or any J/F fare. And from a business standpoint the latter customer is the one I want to be most loyal as they impact my bottom line in a very positive manner.
My 2¢
Aren't your first class upgrades funded using mostly miles - why does it matter what happens to paid folks.
I only have issue with 1 change, the # systemwide upgrade downgrade. Living in the Bay Area and traveling to Asia, for work mostly, I have a few non-stop option, but always went the AA/Oneworld route to earn those 8 upgrades. In some cases, paying more for the premium cabin. If half of business or first class (intl routes) is available, then upgrade the elite passenger using systemwide (even at T-24). They feel good and...
I only have issue with 1 change, the # systemwide upgrade downgrade. Living in the Bay Area and traveling to Asia, for work mostly, I have a few non-stop option, but always went the AA/Oneworld route to earn those 8 upgrades. In some cases, paying more for the premium cabin. If half of business or first class (intl routes) is available, then upgrade the elite passenger using systemwide (even at T-24). They feel good and remain loyal. I think the other changes are fine they are pretty much the norms. The systemwide upgrade number is the only one that I have an issue with. I personally have yet to use up all 8 in a given year, but having them in my account (just incase) made me remain loyal.
Glad that I decided to credit all my flying to AS instead of AA.
How substantial are the 2016 changes on the redeemable miles earning side?
MASSIVE.
Here's the math:
Miles earned for JFK-SFO (round trip) under the current system:
General Member 5,172
Gold 6,465
Platinum 10,344
Executive Platinum 10,344
Miles earned under NEW 2016 system:
Cost of my ticket last week: $323.72 + $52.48 taxes/fees = $376.20
General Member (5 x $323.72) 1,619 miles
Gold (7 x $323.72) = 2,266...
How substantial are the 2016 changes on the redeemable miles earning side?
MASSIVE.
Here's the math:
Miles earned for JFK-SFO (round trip) under the current system:
General Member 5,172
Gold 6,465
Platinum 10,344
Executive Platinum 10,344
Miles earned under NEW 2016 system:
Cost of my ticket last week: $323.72 + $52.48 taxes/fees = $376.20
General Member (5 x $323.72) 1,619 miles
Gold (7 x $323.72) = 2,266 miles
Platinum (8 x $323.72) = 2,590 miles
Executive Platinum (11 x $323.72) = 3,561 miles
As an Exec Plat the difference is 10,344 miles currently vs. 3,561 miles earned next year. That's roughly a 66% loss.
Then on top of that, the number of miles required to redeem a ticket will go up. Some reports suggest a 25% increase for partner awards.
For people who fly on discounted domestic tickets and redeem international partner awards, this is a MASSIVE loss. We're talking a 66% reduction in earning plus a possible 25% increase in award costs.
Also, let's be clear, Delta's GPUs ONLY let you upgrade yourself and up to one companion. You can't gift them to friends, you can't give them to family members unless they're traveling with you on the same ticket. That may not matter to YOU, but for people who basically always fly business class anyway and feel the use to SWU into F is a marginal use at best, it's invaluable to be able to give them away to family members and friends.
Return said the following:
" At the end of the day, these companies are run for the benefit of shareholders, not for the benefit of this community"
For all those that think we live in a secular society, think again. Look everywhere and the one true religion nearly everyone subscribes to is: money.
The only slant towards 'care' about one's customer is that it provides more revenue. I get it - that's capitalism. But...
Return said the following:
" At the end of the day, these companies are run for the benefit of shareholders, not for the benefit of this community"
For all those that think we live in a secular society, think again. Look everywhere and the one true religion nearly everyone subscribes to is: money.
The only slant towards 'care' about one's customer is that it provides more revenue. I get it - that's capitalism. But the extremes it has achieved is disturbing and the problem with consolidation is giant beasts are hungry - VERY hungry - and require much more to 'feed' them.
Unfortunately, we, as customers are no better. We are the ones feeding the beasts, and expect respect for that in return, when really, the beast could care less if we ran out of food.
Perhaps Frontier was onto something with their slogan "A whole different animal." Because surely, megacorporations have become animals. Sickening.
Man, I really hope the coming award chart devaluation isn't a total bloodbath. You know adjustments are coming, especially on partners. I mean, you basically have a 1st Class flight to Asia on JAL or CX at almost the same amount of miles as Biz on UA metal. You know that isn't going to last. But, I do hope they don't go the full Delta. You never go the full Delta.
All three programs are now heavily weighted towards the big spending elite status having business traveler and slanted away from the discount seeking leisure traveler. Unfortunately people in the miles and points world trying to eek out status are usually closer in spending profile to the leisure traveler than the business traveler.
Next year (2016) is going to be bad for high-status folks on AA. With that recent LinkedIn promo where people could earn Executive Platinum for only 25K EQPs, the number of ExPlats in 2016 is going to be outrageous. As a (now-lowly) Platinum, I don't expect to get confirmed for many upgrades.
The good news for me is that I'll probably be able to earn ExPlat next year with the 3X EQM earning, as...
Next year (2016) is going to be bad for high-status folks on AA. With that recent LinkedIn promo where people could earn Executive Platinum for only 25K EQPs, the number of ExPlats in 2016 is going to be outrageous. As a (now-lowly) Platinum, I don't expect to get confirmed for many upgrades.
The good news for me is that I'll probably be able to earn ExPlat next year with the 3X EQM earning, as that will mean just 3 business trips to Europe will just about cover the 100K.
@Stephen no, his perspective was right on for everyone. 7 weeks notice should be criminal! especially after they have said over and over that they will give plenty of notice.
as for the award chart: if you don't see the writing on the wall based upon delta/ua and the ZERO notice we're getting... then you're blind. when the award chart shoe falls, it will be a bloodbath. who knows, since they're innovating like delta...
@Stephen no, his perspective was right on for everyone. 7 weeks notice should be criminal! especially after they have said over and over that they will give plenty of notice.
as for the award chart: if you don't see the writing on the wall based upon delta/ua and the ZERO notice we're getting... then you're blind. when the award chart shoe falls, it will be a bloodbath. who knows, since they're innovating like delta now, there will be no award chart, just random numbers that can go over a million miles per RT like delta. hope you're MSing a million a year at under .005 or you'll be far from pleased...
I thought JonNYC said the benefit changes were going to be for the 2016 qualifying year meaning benefits from qualification through 2/28/2017. which seems like ample notice to me
I agree that the changes may be more terrible than we may have thought as of yesterday, but I would not say the changes are more terrible than what I was fearing before yesterday. Some observations:
1) DL Diamonds may get 4 regional upgrades in addition to 4 SWUs, but DL does not allow complimentary upgrades on transcons and many HI flights, whereas AA (as far as I am aware) still allows EXPs at least...
I agree that the changes may be more terrible than we may have thought as of yesterday, but I would not say the changes are more terrible than what I was fearing before yesterday. Some observations:
1) DL Diamonds may get 4 regional upgrades in addition to 4 SWUs, but DL does not allow complimentary upgrades on transcons and many HI flights, whereas AA (as far as I am aware) still allows EXPs at least the chance at a complimentary upgrade on those routes. UA has fare restrictions. Moreover, there is the potential to earn additional SWUs for overqualifying, something the other airlines do not have.
2) I wonder if AA had instituted a revenue requirement for status or raised the levels (i.e., made qualifying more difficult), you would have labeled such a change equally "terrible."
3) Personally, I think upgrades as EXP will become harder but not for the reason you seem to suggest. I've noticed recently that AA has been pricing its premium cabin at lower prices than it used to. If this recent trend continues, it may not be so much the increased number of elites but fewer upgrades available that make upgrading more difficult. Plus, if travelers who would otherwise qualify for status view AAdvantage as AAverage, then good, let those people go somewhere else.
4) Yes, the RDM earning hurts and is not particularly innovative, but at least it won't take effect until almost a year from now.
They didn't cut Bens only SWUs or didn't push him down the upgrade ladder. They did that to all the EXPs. And like a wise airline once said - if everyone is elite then nobody is. I reckon it won't be long before those new found elites will be fleeced as well.
Why gives a quack about 40% vs 25% Gold bonus if your base is on average going down by 50%?
Let's be honest, Lucky, the reasons you think these changes are bad are entirely selfish.
YOU will see a decrease in SWUs and YOU will see more competition for upgrades.
Others who might not have qualified for your exalted level before might actually attain it now -- and I am glad of it.
Also, as Gary delivers, Gold members will now see an increased bonus when flying AA, even though their miles earned when flying...
Let's be honest, Lucky, the reasons you think these changes are bad are entirely selfish.
YOU will see a decrease in SWUs and YOU will see more competition for upgrades.
Others who might not have qualified for your exalted level before might actually attain it now -- and I am glad of it.
Also, as Gary delivers, Gold members will now see an increased bonus when flying AA, even though their miles earned when flying discounted fares will likely be halved, or worse.
These changes are middle of the road, and if you don't like them, you can always switch your allegiance to another carrier -- just don't dress it up that these changes are a calamity -- they aren't for all but a sliver of self-styled mileage gurus who have exposed themselves to be nothing more than self-interested fliers -- nothing more, nothing less.
As long as business and first class fares keep dropping, I almost don't care anymore about upgrades. I suspect that the qualification requirements will be tightened up for the following year. You can kiss either the 2x/3x EQM multipliers or the full EQM earning on discount economy fares goodbye...
I hope that AA not having a revenue requirement may motivate UA to move their credit card waiver up to the 1K level...
I think it's totally fine to call our these changes terrible news for us. Yes, we are clearly getting less with the rumored new program. But to rail against the airline - whether to call them short-sighted or not innovative or whatever - is really missing the point. At the end of the day, these companies are run for the benefit of shareholders, not for the benefit of this community. It is quite possible that...
I think it's totally fine to call our these changes terrible news for us. Yes, we are clearly getting less with the rumored new program. But to rail against the airline - whether to call them short-sighted or not innovative or whatever - is really missing the point. At the end of the day, these companies are run for the benefit of shareholders, not for the benefit of this community. It is quite possible that AA has made a bad business decision in rolling out these changes, and the results would emerge in AA's financials. But it is possible that the change benefits the business as a whole, and can you really fault them for that? They have all the raw data and you would think their business teams are analyzing that and making decisions based on that. Maybe it's not worth having the industry leading FF program if it is not creating enough benefit for the business versus dialing it back a few notches.
When Delta and United devalued, everyone went on the American bandwagon. Then they devalued their award chart without ANY notice, eliminating gateway stopovers, eliminating the oneworld distance based award chart, and people STILL gave them a pass, saying American's FF program was still better. American promised that they would give plenty of advance notice next time they made a change. Guess what, still no real advance notice. You can't trust American any more than you...
When Delta and United devalued, everyone went on the American bandwagon. Then they devalued their award chart without ANY notice, eliminating gateway stopovers, eliminating the oneworld distance based award chart, and people STILL gave them a pass, saying American's FF program was still better. American promised that they would give plenty of advance notice next time they made a change. Guess what, still no real advance notice. You can't trust American any more than you can trust Delta or United. I only really care about redemption, but the point still stands. I'll probably just start crediting everything to Alaska.
"View from the Wing seems to acknowledge that in his post, but also suggests that two months is apparently “as good as it was going to get.”"
To be clear, I think the changes which I do not like are as good as we could have expected.
As far as notice, I think there are pieces that had sufficient notice and parts that didn't. For instance it's plenty of notice for going to revenue-based earn...
"View from the Wing seems to acknowledge that in his post, but also suggests that two months is apparently “as good as it was going to get.”"
To be clear, I think the changes which I do not like are as good as we could have expected.
As far as notice, I think there are pieces that had sufficient notice and parts that didn't. For instance it's plenty of notice for going to revenue-based earn a year from now. Sort of. I do not like it and think it should start in 2017 and *not late 2016*, *if they announce now*, because it changes Platinum 100% bonus benefits as well. As far as ending points and giving more qualifying miles, on net it probably helps more people qualify so it's at least plausible on the notice front.
Of course they haven't given notice yet at all, so it becomes less and less reasonable every hour.
The ability to earn more SWUs on AA could still make their international upgrade program the best. UA's fare restrictions really do sting (even if they're not as bad as DL's used to be), and on DL there is no chance of earning more than 4 per year -- plus you only earn them at 125K miles, not 100K. So if AA says 4 at 100K and 2 more per 25K or 50K after that, they would arguably still be the best overall.
And thats what happens when you have airline oligopoly
I know UA and now AA get a lot of flak for assigning the same revenue based mileage earnings as DL but I have a hard time faulting them for it. Once the baseline was established by DL, it would be hard for other carriers to change their value proposition because they'd be perceived as inferior if they went below, or wasting resources (by shareholders) if they went above.
I agree with Stephen. My miles are earned by bonuses and spending. Until the redemption part comes out, nothing has even remotely bothered me.
Ben, Couldn't have agree more with you. All these years I stayed loyal to AA because I thought they have the courage to be different but they're becoming just like the other two legacy airlines. If they're cutting their SW upgrade from 8 to 4. I will likely take my business somewhere else.
Stephen: what makes you think the redemption side is getting a pass? It's the only major US program w/o a true award chart devaluation. It's not a question if but when that happens.
I agree w/ Stephen. To call these changes "terrible" is quite silly.
Your disappointment stems from these potential changes not matching your expectations (which you didn't care to share). For those of us who were expecting worse, this doesn't seem so bad.
That said, 4 SWU is a big blow. But no major devaluation to the award chart is a huge win.
@ JL -- What were you expecting to be worse? The changes we know so far have nothing to do with an award chart. The fact that we know this information in no way impacts the odds of there being an award chart devaluation.
@Ben The big question is will this change your loyalty to American?
Based on the way and amount I travel, there's no reason to be loyal to anyone anymore. I'll just go for whoever is cheapest in my desired cabin of travel for that trip.
The loss of SWU sucks but i think i would prefer 4 with no restrictions rather than 8 with a fare requirement. The RDM irks me the most. At least on UA and DL you can transfer points from UR and MR to top off your points balances. Sure, each airlines has their own CC, but we all know the ability to transfer from those currencies is a huge plus. I figured this might be...
The loss of SWU sucks but i think i would prefer 4 with no restrictions rather than 8 with a fare requirement. The RDM irks me the most. At least on UA and DL you can transfer points from UR and MR to top off your points balances. Sure, each airlines has their own CC, but we all know the ability to transfer from those currencies is a huge plus. I figured this might be one reason AA would keep the RDM the same because they do not have the transfer partner. Now lets see what the damage will be on the award chart. Hopefully not a complete gutting of first class awards like UA, but at least point i am now expecting the worst instead of hoping they will be different.
Yeah, I think you have the more accurate view here. AAdvantage is now AAverage. Especially once we get the award chart devaluation details, which FT seems to indicate is not horrible, but I don't think it will be much different than the UA offering but with worse availability and more fuel surcharges.
They are going to claim it's their status earning which differs in no minimum spend vs DL and UA, but in effect that's...
Yeah, I think you have the more accurate view here. AAdvantage is now AAverage. Especially once we get the award chart devaluation details, which FT seems to indicate is not horrible, but I don't think it will be much different than the UA offering but with worse availability and more fuel surcharges.
They are going to claim it's their status earning which differs in no minimum spend vs DL and UA, but in effect that's going to relatively simply add a few marginal elites who will be earning far fewer RDMs for their low spending ways.
Amen. Excellent, excellent post.
This article is biased from the perspective of an elite traveler. I accumulate almost all of my miles through credit card bonuses and don't have elite status in any airline program. If they're barely touching the award redemption prices then it's a win in my book. To say the changes are terrible is a ridiculous statement to make.
@ Stephen -- I wouldn't really call that biased. I'm talking about the changes which were announced to the program. No changes have been announced when it comes to redemptions, so your situation wouldn't apply.
I'm reminded of what you've said in the past that it's a cat and mouse game and that every time we find a sweet deal they eventually catch on and shut it down and the hunt begins for a new loophole.
Thank you thank you thank you for writing this post! So I'll admit I don't fly AA but I know so many friends here in NYC who switched to AA after DL and UA went to the revenue-based earning mileage strategy. I have a feeling those same friends will go back to DL or UA next year.
Hypothetically, if I become AA exec plat before the end of this year, does that mean I...
Thank you thank you thank you for writing this post! So I'll admit I don't fly AA but I know so many friends here in NYC who switched to AA after DL and UA went to the revenue-based earning mileage strategy. I have a feeling those same friends will go back to DL or UA next year.
Hypothetically, if I become AA exec plat before the end of this year, does that mean I only get 4 upgrades instead of the 8 for 2016? If that's the case, that seriously sucks and I hope enough AAdvantage members complain about this so AA would make that policy effective for 2017 instead of 2016.
@ Joey -- If you qualify this year you'd still get 8.
Well, this is US Airways' management running American. Where there was maybe some hope that CO's mgmt (at the time running an admired airline) could turn United into a showpiece / innovator, I don't see how any one expected an airline whose attributes among the points/miles community were basically due to its backwardness, to turn AAdvantage into something "innovative."
We know US was planning on going revenue-based before they hooked AA, and clearly they...
Well, this is US Airways' management running American. Where there was maybe some hope that CO's mgmt (at the time running an admired airline) could turn United into a showpiece / innovator, I don't see how any one expected an airline whose attributes among the points/miles community were basically due to its backwardness, to turn AAdvantage into something "innovative."
We know US was planning on going revenue-based before they hooked AA, and clearly they have not determined that it's to their advantage to maintain a unique competitive position in the FF marketplace.
What's good in all this, if there is anything good, is that in a few months the redemption shoe will drop and then these programs will have completed their transitions and folks can compare and contrast and decide which work for them long-term. With AA's changes and poor award availability, plus DL's rev-based redemption nightmare, it may be that UA becomes the sweet spot for its combination of acceptable redemption rates and availability.
Ben, a quick question for you. I am going to get my EXP status mid-dec after a couple of MRs. Will I be affected by the 4 SWUs or will I still get my 8 SWUs?
@ Daryl -- You'll get eight this year. Four only begins next year.
Spot on post. I thought about changing from United to AA next year, after hearing this news, might as well stick with United. They are all pretty much the same now it seems.
Fully agree, Ben, and I'm pretty surprised they made the changes with as little notice as they did.