American AAdvantage 2016 Changes (Including Award Chart Devaluation)

Just under two weeks ago we learned about rumored changes being made to the AAdvantage program in 2016. Shortly thereafter I shared why I considered the potential changes to be pretty bad, and to basically signify the loss of any competitive advantage American had with their loyalty program.

Well, American has just revealed the full details of the 2016 AAdvantage program, including an award chart devaluation.

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This announcements covers changes to elite qualification, elite benefits, the accrual of redeemable miles, and also the award chart. Let’s go through them one-by-one:

American is playing catch up with Delta and United

Let’s start with the most simple point. As I look at these changes aboard, American is basically just copying a vast majority of the changes made by Delta and United over the past couple of years. They’ve been focused on the merger for the past couple of years, which is why they haven’t made any major changes. But they’re now making them all in one swoop.

As explained in the press release:

“American Airlines has spent the last two years being singularly focused on integration. Now we’re at a point where we can begin to look ahead and lay the foundation for the future of the AAdvantage program to ensure we’re rewarding our most loyal customers with the benefits they value the most,” said Suzanne Rubin, President of AAdvantage. “We seamlessly integrated our programs in 2015, and we’re excited about the opportunities that the program will offer our customers in the years to come.”

So let’s go through the changes one-by-one:

Changes to AAdvantage elite qualification in 2016

Many people will probably find this change to be positive. American is making it considerably easier to qualify for elite status in 2016. Under the current system, you can qualify for elite status based on elite qualifying miles, elite qualifying points, or elite qualifying segments.

For example, Executive Platinum required either 100,000 elite qualifying miles or points, or 120 segments. 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

American points out how their elite mileage accrual rates are significantly higher than the competition:

So it’ll require less effort to qualify for status, which is good news if you wouldn’t otherwise qualify for status.

Personally I consider this to be a negative change, since it means elite ranks will be swelled. American will have higher accrual rates than Delta and United (and their top tier requirements are lower than Delta), so this will swell elite ranks. That means there will be more competition for upgrades, which I’m not personally a fan of.

Could domestic upgrades become more difficult?

Furthermore, starting with the 2017 membership year, elite status will be valid through the end of January of the following year, rather than through the end of February.

Changes to AAdvantage elite upgrades in 2016

American is making two major changes to elite upgrades in 2016.

The first is that beginning March 1, 2016, Gold and Platinum members will earn four 500-mile upgrades for every 12,500 EQMs earned during the membership year, rather than for every 10,000 EQMs. This is due to the increased earnings rates of EQMs, which doesn’t seem unreasonable. Furthermore, American is also raising the cost to purchase 500 mile upgrades, from $30 to $40.

American will also be decreasing the rate at which Executive Platinum members earn systemwide 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.

Beginning January 1, 2016, Executive Platinum members will receive four systemwide upgrades upon qualification for the 2017 membership year, with the opportunity to earn up to four more based on flight activity — two for every 50,000 EQMs earned above the 100,000 EQM threshold up to 200,000 EQMs. So that means you can earn at most eight systemwide upgrades per year, but only if you earn 200,000 EQMs.

This year American is offering eight systemwide upgrades just for qualifying for status, with the opportunity to earn many more for over-qualifying (I’ve earned 14 so far this year).

Presently I consider American to be the single most lucrative airline when it comes to top tier upgrades, while under the new program, I’d say they’ll be competitive with Delta and United, or perhaps the least lucrative. As a reminder:

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.

Furthermore, I expect Executive Platinum domestic upgrade percentages to decrease, given that elite ranks will be swelled. Not a good combo.

Revenue based mileage earning coming in 2016

Starting in the second half of 2016, American will be following Delta and United in awarding miles based on revenue as opposed to miles flown, 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

The above calculations, which are at best almost break even are based on the following fare:

*Calculation based on an AAdvantage member flying round-trip on an American marketed flight from
Dallas (DFW) to London-Heathrow (LHR). Base fare plus carrier-imposed fees – $1,894.

When you add in taxes, that ticket would cost ~$2,200. When ~$2,200 is the basis of comparison we’re using for a transatlantic economy ticket, well, that just shows you how far airfare has come.

I’m sure these accrual rates look familiar if you’re a Delta SkyMiles member:

Or a United MileagePlus member:

It’s worth noting that until the revenue based program takes effect, American will continue to offer redeemable mileage bonuses for those booking premium cabins, as they have for all of 2015.

March 2016 AAdvantage award chart changes

When I wrote about the rumored changes a bit over a week ago, some of you said “well I earn miles primarily through credit cards, so as long as they don’t change redemption rates, that works for me.”

Well, AAdvantage is changing redemption rates as well. And it’s not pretty. At all.

The AAdvantage award chart changes kick in for travel booked on or after March 22, 2016.

Let’s rip the band-aid off super quickly here.

Here’s the current AAdvantage partner award chart for travel originating in the US (all prices one-way):

Here’s the new AAdvantage partner award chart for travel originating in the US (all prices one-way):

To give a few examples of changes in business class redemption rates:

• Business class between the US and Europe increases by 7,500 miles, from 50,000 miles to 57,500 miles
• Business class between the US and Asia 1 increases by 10,000 miles, from 50,000 miles to 60,000 miles
• Business class between the US and Asia 2 increases by 15,000 miles, from 55,000 miles to 70,000 miles
• Business class between the US and South Pacific increases by 17,500 miles, from 62,500 miles to 80,000 miles (in the highly unlikely event you can find award space)
• Business class between the US and Middle East increases by 2,500 miles, from 67,500 miles to 70,000 miles

The cost of a Qantas business class award between the US and Australia increases significantly

And to give a few examples of changes in first class redemption rates:

• First class between the US and Europe increases by 22,500 miles, from 62,500 miles to 85,000 miles (the only partner offering first class to Europe is British Airways, so you’ll still pay $400+ each way in carrier imposes fuel surcharges)
• First class between the US and Asia 1 increases by 17,500 miles, from 62,500 miles to 80,000 miles
• First class between the US and Asia 2 increases by 42,500 miles, from 67,500 miles to 110,000 miles
• First class between the US and South Pacific increases by 37,500 miles, from 72,500 miles to 110,000 miles (in the highly unlikely event you can find Qantas first class award space)
• First class between the US and Middle East increases by 25,000 miles, from 90,000 miles to 115,000 miles

The cost of a Cathay Pacific first class award between the US and Asia increases significantly

For a more comprehensive analysis, below is a comparison of AAdvantage business class partner redemption rates under the old and new program, along with a side-by-side comparison to Delta and United.

There are a few things to note:

• AAdvantage rates listed are for partner airlines only
• United MileagePlus has separate award rates for travel on their own metal vs. partners, so rates listed are for partner travel
• Delta no longer publishes award charts, so all rates are approximate, and based on partner metal only

Meanwhile below is a comparison of AAdvantage first class partner redemption rates under the old and new program, along with a side-by-side comparison of United partner first class redemption rates (Delta doesn’t allow award redemptions for international first class).

Lastly, here’s a table with definitions of the various zones:

The good news is that American will be introducing discounted award costs for travel on their own flights of less than 500 miles. A saver economy award will cost 7,500 AAdvantage miles, while a saver business/first class award will cost 15,000 AAdvantage miles.

Unfortunately other than that, award costs are increasing on American quite a bit as well. The cost of a first class award on the American A321T between New York and Los Angeles/San Francisco is increasing from 32,500 miles to 50,000 miles at the saver level, while business class is increasing from 25,000 miles to 32,500 miles. Ouch!

Here’s the new award chart for travel on American metal originating in the “lower 48:”

Bottom line

I was hoping the “new American” would want to do something to differentiate themselves from Delta and United post integration, given that both airlines have devalued their program to no end. Unfortunately that doesn’t seem to be the case, and instead American was just waiting for the integration to copy-cat the competition.

To sum up my feelings:

• Qualifying for elite status will get easier, which is good if you wouldn’t otherwise qualify, but bad if you would. Making it easier to qualify for status means there will be more elite members.
• Revenue based mileage earning is what it is. Personally I don’t like it at all, while I know others love it. My only issue with it is that Delta created totally arbitrary earnings rates, and United and American have copied them to a “T.”
• The award chart devaluation is drastic, and unfortunately matches recent changes from both Delta SkyMiles and United Mileage Plus. The fact that a roundtrip Cathay Pacific first class award between the US and Asia is going up by 85,000 miles overnight is sort of insane to me. If it’s any consolation, Delta doesn’t allow redemptions for international first class, while American’s partner award rates are still slightly more lucrative than United’s partner award rates.

I’m not at all happy about these changes, but I guess this is the natural result of the industry being consolidated down to just three “big” international carriers? There’s something that really stings about huge cuts in mileage earning rates compounded with huge increases in award costs.

What do you make of the 2016 AAdvantage changes? Are you more bothered by the elite program changes or the award chart changes?