American Airlines has announced a major change when it comes to being rewarded with the AAdvantage loyalty program.
In this post:
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?
oh wow so I get a whole 50 miles not like they gave that many miles unless you booked a very very expensive ticket anyway
Unless you have seen the demand cost curves, it is possible that AA is maximizing revenue at the same time as reducing costs. It’s all about the changes to the demand curve and the point of maximum revenue with lowest costs.
Does this include Concur where a lot of people book company travel?
Anyone care to bet how long before all of the major US carriers follow suit?
This will be like the REAL ID requirement. It will get pushed back repeatedly until it goes away.
Has anyone noticed that both Capital One Travel and Ultimate Rewards sites do not list AA anymore? I was trying to book a flight from DCA - DCA but no AA flights are listed. Thought it's supposed to start May 1, 2024 but apparently AA already disappeared from those 2 sites. Maybe it's just me.
@Ben, I *think* American is telegraphing which bookings don't qualify already. If you go to the AA site and look at your reservations it says "Trips booked on another site or with a travel agent are not shown." For what its worth, all my bookings through our corporate travel agency were shown in my account.
This was only a matter of time - the hotel industry has already been doing this for many years. I suspect most US airlines will quickly follow suit similar to how they have all gone to paying for checked bags, reduced meal service, baggage fees, etc.
Not really - you earn points and nights for all hotel stays booked through corporate travel agencies.
Amex? If this ends using the Amex Platinum Biz with MR points at 35% discount where you still earn miles - then that kills keeping the Platinum Biz card.
"As of May 1, 2024, American will be adding new requirements in order to earn AAdvantage miles"
"American hasn’t yet announced what agencies will be considered preferred, but more information will be provided by the end of April 2024"
Cool. Book all your tickets now and find out on 5/1 if you will earn miles on them. Seems like the type of "customers-are-asking-for-this" double-think we were used to pre-Covid. The good old days are back.
U are misunderstanding. It will be for tickets purchased on/after 5/1 (now 7/11).
Will I earn miles from qr flight booked via a travel agent that is not listed? My guess is that aa cannot list all the major travel agents around the world. If I cannot, the alliance means nothing.
Ben, this is exactly it: "It’s almost like American doesn’t want business travelers anymore."
I work in the corporate travel department of a major Fortune 100 company and I can tell you without a doubt that AA (and to an extent BA) don't care about the business traveler anymore. They want to focus on leisure. They have fired most of their corporate sales managers and are re-negotiating all of their corporate discounts. Our transatlantic...
Ben, this is exactly it: "It’s almost like American doesn’t want business travelers anymore."
I work in the corporate travel department of a major Fortune 100 company and I can tell you without a doubt that AA (and to an extent BA) don't care about the business traveler anymore. They want to focus on leisure. They have fired most of their corporate sales managers and are re-negotiating all of their corporate discounts. Our transatlantic fares have nearly doubled with AA as they have removed discounts and employees are not allowed to fly them any longer. They don't care and I hope it comes back to bite them.
I believe AA cares about business travel, they just dont want to subsidize it by paying travel agent fees, commissions to online booking services, or providing discounts that do not provide the profit margin AA expects for its service. Similar to Southwest that want all traffic to go through its website instead of paying 3rd parties.
I knew this day would come, it was just a matter of time. Every year it gets more and more difficult to distinguish between a LCC and a FSC .
If you travel in F, J, or PE, you can tell the difference quickly. I fly F9 periodically, try getting a trip credit when you cancel your trip or talking to a human by phone They only use online chat now. There is also no interline agreement when things go bad. FSC are lean operations, but have perks (and costs) over ULCC.
I’m more curious on how can American technically find out how a OW partner ticket is booked by travel agency or directly. Looks like only IAG has this much sharing of information with AA
AA wants total control of all passengers and cut out small travel agencies that cannot generate revenue or compete with the large TMC's or OTA's. It will not be long before the other two airlines that make up this monopoly join in. It seems they are pushing Anti-trust laws that are in place to protect the Consumer and allow them to choose how and with whom they purchase airline tickets.
I am a Corporate...
AA wants total control of all passengers and cut out small travel agencies that cannot generate revenue or compete with the large TMC's or OTA's. It will not be long before the other two airlines that make up this monopoly join in. It seems they are pushing Anti-trust laws that are in place to protect the Consumer and allow them to choose how and with whom they purchase airline tickets.
I am a Corporate Travel Agent, and I can't tell you the times I've had to rescue a traveler stuck in an airport with hundreds of other travelers unable to get assistance from the airlines. It doesn't seem like a big deal until it happens to you!
Travel agents are generally a waste of time with the exception of corporates or tour operators . Most provide absolutely no service and OTAs offshored to third party providers. Once the ticket is issued that’s it. They don’t know how to handle anything from delays to cancellations and seat assignments.
To add many agents are not IATA and book with another agent. The passengers don’t know that. You even get agents who book directly...
Travel agents are generally a waste of time with the exception of corporates or tour operators . Most provide absolutely no service and OTAs offshored to third party providers. Once the ticket is issued that’s it. They don’t know how to handle anything from delays to cancellations and seat assignments.
To add many agents are not IATA and book with another agent. The passengers don’t know that. You even get agents who book directly on the airline website and then make up their own invoices with additional fees. I’m aware of one charging €800 more. They even charge extras for example seats. So if the airline charges €30 for one, the agent charges double.
In the EU the laws don’t allow customers to be referred to the agent and that includes refunds. If passengers are having issues with agents then the airline must deal with the request. Therefore the airline will only refund what they were paid and passengers have to fight with agents for their fees to be reimbursed when a full refund is due.
*watches folks start cross-crediting in droves*
I am less concerned about this with AA. Or even UA and DL. I am more concerned with this spreading globally. OTA's are useful for me in one particular area: last minute J fares a day or two out on ME 3 carriers and some in Asia. Turkish as well. They are often $400-$500 cheaper compared to booking direct. Of course, I never use an OTA unless I am 1-2 days out and certain I...
I am less concerned about this with AA. Or even UA and DL. I am more concerned with this spreading globally. OTA's are useful for me in one particular area: last minute J fares a day or two out on ME 3 carriers and some in Asia. Turkish as well. They are often $400-$500 cheaper compared to booking direct. Of course, I never use an OTA unless I am 1-2 days out and certain I will be traveling (and one way only) so this savings is a good trade off for the lack of flexibility or difficulty in changes, which so close in I never need.
looks like they are borrowing the model from the hotel industry. I also wonder if other airlines will adapt this model.
We also don't know which are the "Eligible Partner Airlines". It could be specific members of Oneworld, All members of Oneworld, or even all airlines with which AA has mileage agreements.
If it is "Specific members of Oneworld" it could be ONLY those with which AA has fares and scheduling agreements, essentially those which have secured derogations to the Anti-Trust laws, the program becomes valueless as AA and its other Antitrust busters (BA, IB,...
We also don't know which are the "Eligible Partner Airlines". It could be specific members of Oneworld, All members of Oneworld, or even all airlines with which AA has mileage agreements.
If it is "Specific members of Oneworld" it could be ONLY those with which AA has fares and scheduling agreements, essentially those which have secured derogations to the Anti-Trust laws, the program becomes valueless as AA and its other Antitrust busters (BA, IB, AY [and JA??]) never offer on their sites the other Oneworld airlines' attractive or discounted fares.
This, plus the complete failure of the roll-out and transition of the new Business program, makes one wonder whether the AA management has become suicidal.
You mentioned a few weeks ago that it might be worth it to quit AAdvantage and seek Oneworld status with other member airlines. This now makes it imperative.
Another reason to use up all points as soon as possible (preferably in QSuites) and book travel as if no loyalty program for AA exists at all anymore. Booking decisions will have to be based on other factors (price, schedule convenience, comfort, etc.)
Is AmexTravel.com run by Amex GBT? I assume it is but I could be wrong. Wondering about whether Amex Pay with Points will accrue miles.
Not any more. AmexTravel.com is the credit card company. Amex GBT is the business travel software and services company that split off from Amex about 10 years ago. Still a financial relationship between the two, but technically w different companies now.
The days of anything for the business fly are over because the business flyer is no longer the real driver of profits. Hence, why AA (and others) will sell upgrades from out of the hands of the road warrior that used get upgraded 80%+ of the time. This is just another move. AA is finding getting infrequent FF to take them up on their endless hawking of credit cards in flight is far more profitable than Mr. Road Warrior expecting his complimentary upgrade.
@ George, I think you'd be surprised how much money they'd lose if that business traveler exits the ecosystem. The base fare may not bring a lot. But guess who buys a lot of upgrades? Guess who books their leisure travel for them and their family on AA because they're on the hamster wheel? Guess who pushes all their credit card spend to their AA card to ensure they hit the next status level? The...
@ George, I think you'd be surprised how much money they'd lose if that business traveler exits the ecosystem. The base fare may not bring a lot. But guess who buys a lot of upgrades? Guess who books their leisure travel for them and their family on AA because they're on the hamster wheel? Guess who pushes all their credit card spend to their AA card to ensure they hit the next status level? The weekly road warriors. Their flights may not be valuable, but their engagement in the AA ecosystem is.
Also, guess who books the $20K plus business class fares at the last minute to Europe and Asia... business travelers who are guaranteed to want their LPs and miles for their $20K fare and will absolutely book another airline if they aren't going to get any perks. Or maybe they'll book AA and credit to BA and get the BA card and switch their spending to there, eroding but not eliminating their value to AA.
Again, if AA is going after retail (consumer) OTAs this is a non-issue. But if they're going after corporate and full-service travel agencies, they've definitely overstepped.
"Road warriors" (what a stupid term) dont pay for their own tickets.
Hopefully the day is coming that elite status will only be for those of us that do pay for their own tickets
Why on earth does it matter who is paying for the ticket? The ticket is still being bought by that person. Corporate paid travel has been the backbone and majority of business travel since business travel was invented.
Richie Rich's who want to receive special privileges for paying all of their expensive tickets out of their own pocket should consider booking private jets.
It's more likely anyway that the day will come where AA...
Why on earth does it matter who is paying for the ticket? The ticket is still being bought by that person. Corporate paid travel has been the backbone and majority of business travel since business travel was invented.
Richie Rich's who want to receive special privileges for paying all of their expensive tickets out of their own pocket should consider booking private jets.
It's more likely anyway that the day will come where AA only rewards their elite credit card spenders with status.
I fly AA 2-4 times a week. What I'm noticing is that business travelers are schelping back to coach when Groups 1,2, and 3 are called. The very looking leisure/personal traveler is sitting their butt down in first. Now they may be elites, they may be business travelers too, but they are paying to be there in the form of paid upgrades and out of their own pocket. Few companies pay for domestic first (save...
I fly AA 2-4 times a week. What I'm noticing is that business travelers are schelping back to coach when Groups 1,2, and 3 are called. The very looking leisure/personal traveler is sitting their butt down in first. Now they may be elites, they may be business travelers too, but they are paying to be there in the form of paid upgrades and out of their own pocket. Few companies pay for domestic first (save maybe for transcons) for the run of the mill consultant class. AA just isn't into you like AA was once.
Good. OPM to the back!
If a customer wants an upgrade, pay for it. If you buy a economy seat, expect to sit in the back of the plane. The cost for most app upgrades is now less than $100 per flight hour.
Excellent joined-up thinking.
Very rare from most managements.
If this is aimed at running off the consumer online travel agencies (Expedia, Orbitz, etc) this is not a big deal. If they're trying to drive every corporation into a contract with AA -- good luck. Companies don't care if their travelers get miles. They care about whether they have an advantageous arrangement with their preferred travel companies. Travelers at companies where there's no agreement with the travel agency or the company will book away...
If this is aimed at running off the consumer online travel agencies (Expedia, Orbitz, etc) this is not a big deal. If they're trying to drive every corporation into a contract with AA -- good luck. Companies don't care if their travelers get miles. They care about whether they have an advantageous arrangement with their preferred travel companies. Travelers at companies where there's no agreement with the travel agency or the company will book away from AA. You can say people are hub captive (e.g. DFW) but they can get very creative about routings to ensure they earn miles. Or they will stay home.
Honestly, I'm convinced that the airline industry would be a lot smaller if frequent flyer programs didn't exist. There's a LOT of unnecessary business travel as some travelers hunt for points and miles to cover their annual holiday.
Why not just start dictating terms to the OTAs instead? There are only a few big airlines and WN already blocks them.
Anyone seen an estimate of how much this will save AA?
Per Tim Dunn, the savings would magically be better for premium airlines.
Per Tim Dunn, AA would not see any savings or benefits at all due to the lack of premium recognition.
Per the obvious, you are fixated with me and incapable of contributing to the discussion
Eskimo - you really have to get help. What the heck is wrong with you?
@Lucky there’s a carveout for members of the new biz program. That’s very relevant context.
This is almost certainly targeting the booking holdings and Expedia group brands rather than the corporate travel Amex GBT, CWT, BCD etc
And you underestimate how much power Booking or Expedia have.
Commissions for flights vs hotels are not even close.
In that case who else would this change be targeting. While share of travel that is business has dropped post pandemic it’s not insignificant.
I’m fully aware of the booking power of all the Booking and Expedia brands. It essentially makes up for the entire market not booked directly with the airlines
Honestly pretty smart - wonder if UA DL will follow suit. It's not that flights aren't available for booking through these other parties, just that the traveler doesn't get elite credit or miles. So American isn't going to 'lose' customers booking with a leisure online agency, but let's be honest these are the people that don't care much about loyalty anyways. I'm sure Concur and Amex GBT will be preferred, capturing 95% of business travelers...
Honestly pretty smart - wonder if UA DL will follow suit. It's not that flights aren't available for booking through these other parties, just that the traveler doesn't get elite credit or miles. So American isn't going to 'lose' customers booking with a leisure online agency, but let's be honest these are the people that don't care much about loyalty anyways. I'm sure Concur and Amex GBT will be preferred, capturing 95% of business travelers right there. The rest of the business travel agencies will certainly become preferred lest they will be the ones that lose the business.
Didn't UA have, years ago, a similar policy (even more restrictive) which they quickly reversed ?
Concur isn't an agency, it's a booking platform utilized by dozens (hundreds?) of different corporate agencies. Amex GBT has less than 10% of the corporate travel market. Thing is, with their current threshold for becoming a "preferred agency", literally zero of the big players would be in. AA is trying to strong-arm all the big agencies into moving onto their booking platform (which is horrible to use) by holding the mileage issue over them. It...
Concur isn't an agency, it's a booking platform utilized by dozens (hundreds?) of different corporate agencies. Amex GBT has less than 10% of the corporate travel market. Thing is, with their current threshold for becoming a "preferred agency", literally zero of the big players would be in. AA is trying to strong-arm all the big agencies into moving onto their booking platform (which is horrible to use) by holding the mileage issue over them. It will be interesting to see how they all respond.
Terrible change. Lucky, you may want to dedicate a blog post to the transition of FF programs from a travel centric program to one that is primarily a financial exchange of sorts. I make 80-85% of my points through credit card spend. Not an issue for me, clearly not an issue for the airlines, but I am questioning the loyalty created. In my case - it is minimal
The bottom line counts more than loyalty. If the the credit card spend model brings more revenue, the airlines have a duty to their shareholders to agreesively pursue it. By the way, the only loyalty that ever existed was loyalty to the perks the airlines gave their "loyal" flyers, and these continue under the new model.
"Lucky, you may want to dedicate a blog post to the transition of FF programs from a travel centric program to one that is primarily a financial exchange of sorts. "
Silly, Mike. He's been there for years!
Lucky makes a trivial amount of money from the ads around his content, all the money he makes is from credit card referrals.
FF programs were never designed to "reward" customers, but was a marketing tool to generate more revenue. Airlines have figured out they can get more money through selling loyalty points to banks than rewarding than encouraging customers to fly their airline more. Delta's claim of generating $7B yearly from selling sky pesos seems a good revenue channel.
Just got an email from AA. One thing I noticed is that if you buy a BE fare other than aa.com or a partner airline there's no LPs earned. The email said "miles" so I wondering if that also means no LT Miles earned.
This is just retarded from AA. I hope all OTAs put a disclaimer on their searches "YOU WONT EARN MILES" when booking AA.
So AA is penalizing their "entry level customers" but also their "loyal business" customers with these changes.
You can make the same point without using that word. It hurts to see people use it.
There are alot of words in the english language that can have the same or better affect than using the 4th word in your post. Put yourself in someone else's shoes who may have a friend/family member that is disabled. It's simply offensive.
It's offensive if you take offense. "Retarded" is the politically-correct term that was promoted as a replacement for "imbecile." And it is far better in general usage because it does not necessarily refer to a human being.
So unsaddle your high horse.
I'm wondering, given the debate, who it would hurt more if the AA-OTA relationship collapsed. How hard would it be for OTAs to de-prioritize AA in retaliation or slap a toggle switch in that makes AA vanish?
EVery time I use Orbitz to book flight ticket, my credit card statement shows the charge under the name of the airline instead of Orbitz. I am wondering whether it shows the way of handling ticket sale differently.
I imagine Amex GBT would be one of preferred agencies, the amount of fellow business travellers I meet whose organisations utilise their services is huge.
Wondering how Navan bookings will be treated. On my Amex statement, the entire purchase amount shows as Navan (e.g. a $500 ticket is showing as a $500 Navan purchase). When I go to MR points account however, the same purchase seems to be broken into a $5 booking fee and a $495 direct purchase with the airline.
“I wonder if the lack of clarity has to do with American trying to use this announcement as leverage to negotiate less costly contracts with third parties, in exchange for being a preferred agency.”
Good guess!
The overwhelmingly majority of business travelers are booking through Concur. This announcement changes nothing.
If Concur's not included in the "preferred travel agency," then AA will lose millions of business travelers. I must use Concur for work travel as well, so I really hope AA grants it and I think they're likely to do so, but if they don't, I'll switch to Alaska Mileage Plan.
Concur is not a travel agency. Concur is a tool that agencies provide their customers to use. TBD on which agencies AA counts as "preferred". Concur is not a travel agency.
AA is not stupid. And as others have said, Concur is not a travel agency. Most biz travelers are freaking out for absolutely nothing.
AA has proven time and again that it is indeed quite stupid. Just look at the stock price. They have no clue how to increase shareholder value and are just throwing darts at a board hoping one strategy will work.
"AA is not stupid" ? Say it at your own risk.
I don't concur with that statement.
well played @eskimo
This may or may not matter depending on what corporate travel agent the firm uses, not using Concur per se.
Concur is generally used as the interface connects the internal expense system with an external travel agency and, eg, enforces corporate booking policy.
Business travelers are rightfully freaking out. Who knows if your company’s travel agency (that uses Concur as an interface) will be a preferred travel agency. Most corporate travel agencies use Concur as an interface but it’s the travel agency that books the ticket.
Then just change jobs if a handful of AA points is important to you.
All the whining from people who never pay of their own tickets anyway is pitiful
Concur is an online booking tool. It is not the travel agency.
Concur can support multiple agencies at a time, example BCD in Europe, CWT in US and ctrip in China all for the same employer
I am surprised to see frequent business travelers think Concur is a travel agency. Concur is software used by a lot of travel agencies for online booking.
Let's face it, the North American FF programs have gone down the drain a long time ago. AS will turn into crap with minimum spend very soon as well.
Curious how many US members A3 and TK already have. I am sure some OW niche will open up as well.
RIP Google flights
Google Flights simply provides you with pricing and different booking options so they can also (and do) offer you the option to book directly with AA. So I don't think it will affect Google Flights.
Why would Google Flights be affected?
It sends you to the carriers' own webpages (among other options) to book.
With all the recent changes, it seems that AA is hellbent on getting everyone to sign-up for an AAdvantage account. I get it, more opportunities to market all their products. Plus, down the road they'll probably sell your contact info/share it with "strategic partners" for even more revenue.
Just has to make you laugh, AA top revenue generators in 2024:
1) Credit Cards
2) AAdvantage miles
3) Selling the info attached...
With all the recent changes, it seems that AA is hellbent on getting everyone to sign-up for an AAdvantage account. I get it, more opportunities to market all their products. Plus, down the road they'll probably sell your contact info/share it with "strategic partners" for even more revenue.
Just has to make you laugh, AA top revenue generators in 2024:
1) Credit Cards
2) AAdvantage miles
3) Selling the info attached to your AAdvantage account
4) Actually flying passengers
I'd be curious where cargo falls in that list. And I'd bet my next paycheck it's above flying passengers.
And the profitability of the first two is totally dependent on management whim in setting the internal pricing.
I worked at Enron where nearly all the dodgy stuff was in the annual reports so I assumed that the investment bank analysts had checked it and decided it made sense.
So the fact that the investment bank analysts attribute enterprise value to the FF programmes based on arbitrary internal pricing convinces me not at all.
For 2023, the numbers are in Millions by income category:
Passengers $ 48,512
Cargo $812
Other $3,464
I am unsure how they classify credit card income, but I kinda think it's Other.
The Loyalty Program is $3453 - so maybe that means there is just around 3 and half billion dollars of points outstanding.
https://americanairlines.gcs-web.com/news-releases/news-release-details/american-airlines-reports-fourth-quarter-and-full-year-2023
Oh - and this change, seems strange to use the end consumer to push the...
For 2023, the numbers are in Millions by income category:
Passengers $ 48,512
Cargo $812
Other $3,464
I am unsure how they classify credit card income, but I kinda think it's Other.
The Loyalty Program is $3453 - so maybe that means there is just around 3 and half billion dollars of points outstanding.
https://americanairlines.gcs-web.com/news-releases/news-release-details/american-airlines-reports-fourth-quarter-and-full-year-2023
Oh - and this change, seems strange to use the end consumer to push the agency rather than another means - like a transaction fee.
This seems to be the biggest obstacle knowing whether the site you book through is considered preferred. All kinds of theories on FT.