American AAdvantage has launched a noteworthy targeted promotion that incentivizes award flights. I can’t help but wonder about the long term implications of this…
American AAdvantage incentivizing award flights
Some American AAdvantage members are finding themselves targeted for a promotion that provides rewards for taking award flights. You can see if you’re eligible by logging into your AAdvantage account and checking the “promotions” tab, whether on aa.com or the American mobile app.
There seem to be two versions of the offer:
- One version offers 50 Loyalty Points per 1,000 AAdvantage miles redeemed
- One version offers 100 Loyalty Points per 1,000 AAdvantage miles redeemed
The basic terms seem to be as follows:
- You must register and book travel by October 7, 2024
- Travel has to be completed by December 31, 2024
- You can earn up to 20,000 Loyalty Points with this offer
- Only award travel on American and American Eagle qualifies, and not award travel on partner airlines
- Bonus Loyalty Points will post within six to eight weeks of completing eligible activity
- Only those who are targeted and are able to register are eligible for this; for example, I don’t see it on my account, but others report seeing this
As a reminder, Loyalty Points is American’s system for elite status qualification. You don’t earn any AAdvantage redeemable miles with this offer, so this is purely valuable for status.
Could this become a permanent program feature?
I can’t help but think that this promotion is intended to see how rewarding award flights impacts consumer behavior. Keep in mind that both Delta SkyMiles and United MileagePlus count award flights toward status:
- With Delta SkyMiles, Medallion Qualifying Dollars (MQDs) are earned at the rate of one cent per redeemed mile; in other words, redeeming 10,000 miles earns you 100 MQDs
- With United MileagePlus, Premier Qualifying Points (PQPs) are earned at the rate of one cent per redeemed mile; in other words, redeeming 10,000 miles earns you 100 PQPs
As you can see, Delta and United are essentially valuing each mile redeemed at a penny, and are rewarding it as such.
With American AAdvantage, the program ordinarily awards 5x Loyalty Points per dollar spent, before any elite bonuses (Executive Platinum members receive a 120% bonus, so earn 11x Loyalty Points per dollar spent). So the offer of 50 Loyalty Points per 1,000 miles redeemed would be comparable to what you see at Delta and United, at least for non-elite members. I imagine the offer of 100 Loyalty Points per 1,000 miles redeemed was thrown in there to do some testing, and see how it impacts behavior.
I wouldn’t be surprised if American plans to eventually roll this out on a widespread basis. On the surface, that would be awesome news, especially as someone who constantly redeems miles for travel on American. However, it’s a double-edged sword.
I’m not a fan of American following Delta and United when it comes to the loyalty program, since American miles remain more valuable than Delta and United miles. If miles are increasingly treated as a currency worth a cent toward the cost of a ticket on American, I think it could eliminate some of the outsized redemption opportunities.
So for now we’ll mark this as “developing.” I’m excited about the prospect of this maybe becoming a permanent program feature, but also worry about the implications.
Bottom line
American AAdvantage has just launched a targeted promotion, which offers rewards for redeeming miles. Eligible members can earn 50-100 Loyalty Points per 1,000 miles redeemed. With Delta and United both rewarding award flights in a similar way, I suspect this is American’s attempt to test this as a program feature.
What do you make of this American AAdvantage promotion?
Membership is free and takes no more information than commenting as a guest. Earn status points for good contributions, and see fewer ads as your status grows.