American Airlines has announced a major change when it comes to being rewarded with the AAdvantage loyalty program.
AAdvantage cuts miles & Loyalty Points on non-direct bookings
As of July 11, 2024, American will be adding new requirements in order to earn AAdvantage miles and Loyalty Points for American Airlines flights. As of then, you’ll only earn AAdvantage miles and Loyalty Points for your reservation if you book through one of the following channels:
- Book directly with American or an eligible partner airline
- Book as an AAdvantage Business member or contracted corporate traveler
- Book through a preferred travel agency; American hasn’t yet announced what agencies will be considered preferred, but plans to do so weeks before the changes are implemented (so presumably by June)
Furthermore, basic economy fares won’t be eligible to earn AAdvantage miles or Loyalty Points when booking through a preferred travel agency. So in order to be rewarded on basic economy fares, you’ll have to book directly through American or an eligible partner airline, unless you’re registered with the AAdvantage Business program, or have a contracted corporate agreement with American.
As a reminder, American AAdvantage currently awards anywhere from 5-11x AAdvantage miles and Loyalty Points per dollar spent on eligible airfare. Those earning rates will stay the same for eligible bookings, while non-eligible bookings won’t be rewarded in any way.
American was initially supposed to implement this was of May 1, 2024, but that timeline has been pushed back by just over two months. Why is American delaying the implementation of this? The airline claims it’s extending the timeline so that more travel agencies can potentially have “preferred” status for the purposes of customers earning rewards.
American obviously wants agencies to book via NDC capabilities (which is a lower cost distribution method for the airline), and the airline expects more agencies to implement this in the coming months.
This American AAdvantage change has major implications
Historically the “big three” US carriers have rewarded members similarly regardless of how they book an eligible ticket, so American making this change could have significant long term implications for the industry.
It goes without saying what American’s motive is here — the airline wants you to book direct so that it has the lowest distribution costs, and so that it can market more products to you. Fair enough, and for that matter, this is something the hotel industry has been doing for a very long time, though admittedly commissions for third parties are higher there than in the airline industry.
It remains to be seen if the value of more direct bookings will outweigh the loss of revenue from those who no longer choose to fly with American.
The biggest question right now is which agencies will be considered “preferred.” American is leaving lots of people in limbo here, given that these details won’t be revealed for several for weeks. It seems that American is using this announcement as leverage to negotiate less costly contracts with third party agencies, in exchange for being a preferred agency.
Many business travelers have to book through third parties, so this potentially represents quite a war against business travelers. When you further consider the extent to which American has already axed its various business programs, it’s almost like American doesn’t want business travelers anymore. American seems to be focusing on doing everything it can to cut costs, rather than to maximize revenue.
Bottom line
As of July 11, 2024, American will no longer award AAdvantage miles or Loyalty Points, unless you book directly or through a preferred travel agency. The catch is that we don’t know what travel agencies are preferred, and obviously the details of that will have major implications.
What do you make to these AAdvantage program changes?
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