New American AAdvantage Program Details

American AAdvantage has just unveiled the details of the 2015 AAdvantage program, which will be the combined program for US Airways and American Airlines as the merger continues.

I had the chance to speak to Suzanne Rubin, President of AAdvantage, as well as a handful of other people at AAdvantage, about the changes.

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Before I dig too deep into the 2015 program details (and there’s a lot to cover), let me explain a few things upfront:

These changes (or lack thereof) are awesome

If your heart is beating at a million miles an hour, you should be at ease. You have nothing to worry about.

No award chart devaluation.

No revenue requirement.

Miles won’t be awarded based on dollars spent.

No huge devaluations.

No major changes to the American AAdvantage program whatsoever, fundamentally.

AAdvantage management has the right priorities

I call things as I see them.

I was probably the biggest critic of American and US Airways when they made award chart changes without notice earlier in the year. But I couldn’t help but smile during my call yesterday  — AAdvantage gets it!

And by “gets it,” I mean they have the right goal, which is combining the two programs as smoothly as possible. Dividend Miles will be merged into AAdvantage, and for the time being they’re changing as little about AAdvantage as possible in order to make the transition go smoothly.

To me, this is brilliant, and shows that management’s focus is on the right things. Namely, the primary goals seem to be:

• Merge the US Airways Dividend Miles and American AAdvantage programs as neatly as possible
• Minimize disruptions to frequent fliers by avoiding making any changes that aren’t absolutely necessary

I think the lack of an award chart devaluation speaks for itself.

When Do AAdvantage And Dividend Miles Programs Combine?

AAdvantage and Dividend Miles will integrate in second quarter 2015

While an exact date hasn’t yet been set, US Airways Dividend Miles will be merged into American AAdvantage between April and June of 2015.

An exact date will be communicated to members of both programs early next year, and we’ll get more details on the process for matching accounts and status so that you can pool all your miles together.

Elite Status At The New American

AAdvantage will have three elite tiers

The “new” American will continue to have three elite tiers — Gold, Platinum, and Executive Platinum, just as was previously the case with AAdvantage.

That’s right, that means for now there’s no four tier system, so 75,000 mile US Airways Platinum members will be “downgraded” to 50,000 mile AAdvantage Platinum members.

That being said, AAdvantage Platinum members earn a 100% mileage bonus, while previously Dividend Miles Gold and Platinum members only earned a 50% and 75% mileage bonus, respectively. So mid-tier US Airways elites will see a significant increase in the redeemable miles they accrue.

The only thing that will be changing on the elite qualification front is that Executive Platinum will require 120 segments rather than 100 segments.

I asked for the reasoning, and it was explained to me that it was a change that made sense for AAdvantage based on the combined American and US Airways network, which will have substantially more short flights.

Status will be determined based on combined totals

Once programs are combined, your status will be determined based on the combination of your 2014 elite qualifying totals between both programs, as well as your 2015 elite qualifying totals between both programs.

In other words, if you credited 50,000 elite qualifying miles to each of AAdvantage and Dividend Miles this year, you’d automatically be upped to Executive Platinum status in the second quarter of next year.

If you credit 25,000 miles to each of AAdvantage and Dividend Miles in the first quarter of next year, you’d be AAdvantage Platinum when the programs combine.

Elite Upgrades Beginning 2015

How will domestic upgrades work at the new American?

The biggest challenge American has is integrating the reservations systems of the two airlines. Until late 2015, American and US Airways will be on separate reservations systems.

As a result, AAdvantage is trying not to change the current upgrade systems for the respective carriers. Management feels it doesn’t make sense to do the development work to change the underlying US Airways technology when it will ultimately be phased out, and those resources can be better spent on further combining the two systems.

That being said, where practical American is aligning the policies as closely as possible between the two airlines. So upgrades for AAdvantage elites will work as follows:

For travel on American, the current 500 mile sticker system will continue to apply:

The major change is that American will offer complimentary upgrades to all elites traveling on flights under 500 miles. This represents 34% of flights that are eligible for domestic upgrades.

Gold and Platinum members will continue to earn four 500 mile upgrades for every 10,000 elite qualifying miles earned, and the intent is to give US Airways elites that are transitioning to AAdvantage a starting upgrade balance when the programs combine.

For travel on US Airways, complimentary upgrades will continue to apply:

Previously Chairman’s Preferred members would clear seven days out, though in this case American is trying to at least align the upgrade windows between programs as much as possible, even if they can’t align the processes.

As a reminder, the respective upgrade regions won’t change:

For American marketed and operated flights, upgrades are valid within and between the U.S. (including Hawaii) and Canada, Mexico, the Bahamas, the Caribbean, Bermuda and Central American and are based on upgrade availability.

For US Airways marketed and operated flights, upgrades are valid within and between the U.S. (excluding Hawaii) and Canada, Mexico, the Bahamas, the Caribbean, Bermuda and Central America and are based on upgrade availability.

How will top tier systemwide upgrades work at the new American?

US Airways top tier flyers better be thrilled about this.

Under the old system:

• AAdvantage Executive Platinum members received eight systemwide upgrades without fare restrictions per year
• Dividend Miles Chairman’s Preferred members received two systemwide upgrades without fare restrictions per year, each also valid for a companion

As soon as the programs merge in the second quarter of 2015, newly minted Executive Platinum members will earn eight systemwide upgrades.

That means if you’ve already requalified for Chairman’s Preferred this year and have your two systemwide upgrades you can redeem those, and in addition to them will receive the eight system upgrades in the second quarter.

Do note that the two US Airways systemwide upgrades won’t be transferred to the new program, so you’ll want to redeem them before integration.

At that point all AAdvantage systemwide upgrades can be redeemed on both American and US Airways metal flights.

What Is Changing With The AAdvantage Program?

American will be making two entirely positive changes as of January 1, 2015.

Class of service bonus for business class increases

For both travel on American and US Airways, the mileage bonus for business class is increasing from 25% to 50%.

Free same day flight changes being added for Executive Platinum members

I think American AAdvantage Executive Platinum is the best top tier airline status out there, though I’ve long thought that one major oversight was that not offering elite members free same day flight changes. Even EXPs have to pay $75 for same day changes.

Not as of next year — same day flight changes will be complimentary for top tier elites.

This Is The Best Possible Outcome

It doesn’t matter what changes an airline makes, there will always be people that complain.

Always.

I’ve been borderline-terrified about what 2015 would bring to the AAdvantage program, and was convinced we’d see at least one of the following:

• A combined (devalued) award chart
• Revenue requirements for elite status
• Revenue-based mileage accrual

So the actual changes (and really, the lack of changes), almost feel a bit like April’s Fools… in a good way.

Let me be clear about the two most important takeaways here:

This gives me confidence in the leadership of AAdvantage — they’re focused on what’s most important, which is making the merger as easy as possible for their most frequent flyers. To quote Suzanne Rubin, AAdvantage is “focused on integration, not innovation.” And that’s brilliant, in an industry so filled with, ahem, “innovation” at the moment.

I’m not naive. This is not the long term future of the AAdvantage program. We will see changes to the award chart, and we may see revenue requirements. But we have basically “bought” ourselves a year here, I think.

It goes without saying that AAdvantage will closely be monitoring the competition. Once the airlines are on a single operating certificate, reservations systems are merged, and frequent flyer programs are integrated, will American follow in the footsteps of Delta and United?

Maybe, maybe not.

American’s management has time on their side, in this case. Delta SkyMiles seems to be leading the way when it comes to customer unfriendly changes, and United MileagePlus is seemingly blindly following them.

AAdvantage has the benefit of seeing how these changes pan out, and then deciding what’s best for them.

We don’t actually know how revenue based programs will perform — maybe they’re the best thing ever for loyalty programs, or maybe they’re the worst thing ever. Only time will tell.

But having that time, and seeing AAdvantage management focused on ensuring a smooth transition rather than trying to roll out an entirely new program makes me feel much more confident about the direction of the program.

How do you feel about the 2015 AAdvantage program?