American Incentivizes Redeeming AAdvantage Miles… Ever So Slightly

Filed Under: American, Awards

For years major US airlines seemingly barely used their loyalty programs to fill planes. After all, they didn’t really have to, with airlines having experienced record profitability and loads. The pandemic has changed that, and we’ve once again started to see airlines offer more frequent flyer promotions.

Yesterday Southwest launched a promotion offering 20% off award redemptions, and today American has kicked off a promotion to incentivize redeeming AAdvantage miles.

American offering bonus when you redeem miles

American is offering 250 bonus AAdvantage miles for every award flight you take:

  • You must register by October 7, 2020, and book travel after registering
  • You must travel between October 1 and October 31, 2020
  • You can earn up to 2,000 bonus AAdvantage miles
  • Only the ticketed passenger can earn bonus miles, so if you’re booking travel for someone else, have them register for the promotion so they can earn the bonus miles
  • Only flights flown on American Airlines are eligible for this promotion

I get the idea, but the execution isn’t good…

While I appreciate the concept behind this promotion, I can’t help but feel like American AAdvantage is being incredibly stingy here:

  • You have to register before booking travel
  • You can only travel over the course of a month
  • You can only earn up to 2,000 bonus AAdvantage miles
  • You earn 250 bonus AAdvantage miles per flight; I value AAdvantage miles at ~1.5 cents each, so to me that’s like earning $3.75 worth of miles per flight through this promotion

Individually any of those restrictions would be fine, but when you combine them, I can’t help but feel like this promotion just comes across as… extremely stingy.

12,500 AAdvantage miles is a normal cost for a one-way domestic award ticket, so you’re getting a grand total of a 2% discount on your award ticket.

Want to fly nonstop from New York to Los Angeles in first class? The absolute cheapest one-way award in the month of October is for 74,500 AAdvantage miles, so getting 250 miles back is like getting a ~0.3% discount.

Look, I don’t want to look a gift horse in the mouth — something is better than nothing, I suppose. But I also believe that if the goal is to move the needle when it comes to consumer behavior, 250 bonus miles isn’t gong to do much. At that point American is just giving away (a very small number of) miles for “free,” rather than doing something that actually impacts member behavior. At least that’s my take.

20% off award tickets plus blocked middle seats on award tickets, like what Southwest is doing? Yeah, that could cause people to book. Getting bonus miles worth less than the cost of a bottle of water at an airport? Meh…

Bottom line

American is offering 250 bonus AAdvantage miles per flight to members who register and then redeem miles for travel in October. While it’s nice to see American incentivizing AAdvantage redemptions (which we otherwise haven’t seen in a long time), this is definitely on the stingy side.

What do you make of this promotion — is this promotion well thought out, or stingy to the point of not impacting consumer behavior much at all?

Comments
  1. Well given there are now empty seats. It’s might also encourage people to continue to fly because hey my miles just took me to….. (Unfortunately, there are a lot of places people would like to go, including me, but are off limits with no clear time frame of when that will change.)

    This being said I have to give to AA this year. EXP for $9K and 60KEQM, for EXPs an extra award at 90KEQM, 120KEQM and 150KEQM (I took miles). Not to mention that first is now getting a full beverage service (except for a few lazy FAs) and a snack on domestic flights of over 1,000 miles. Seems as though AA is trying to make flying as pleasant as possible even as the industry teeters on going bust.

  2. As a marketing guy, I can see how this went down…

    Management: Come to us with some creative ideas for incentivizing people to burn their miles amidst COVID!

    Marketing Specialist 1: I’ve got a great one. What if we offer a rebate to customers for using their miles?

    Marketing Specialist 2: Yes! Maybe we could do 10%, just like we used to offer on our Citi cards. Or maybe even push it up to like 15-20% to really get people to burn their miles.

    Management: We ran this up the food chain. Great idea, we’re so excited to execute it! But, we decided 250 miles per segment is really as generous as we can be. We think this is honestly a really great thing. I’m confident it will still be a super successful, amazing promotion! Now blast out emails and let people know!

  3. @ Aaron:

    Hilarious, and definitely correct.

    When I first saw the promo, I thought there was a typo, leaving off a 0 from each flight. 2,500 bonus per flight is still not a ton, but it would at least be something.

    I wonder if Delta or United will do anything exciting.

    So far the only company that’s excited me with their promos is Hyatt.

  4. I’d be surprised if this moved the needle for a single person. I mean that literally: I don’t think a single person changed their behavior for this…

    The fact that they have a 2000 miles limit is the coup de grace, as if someone out there is going to be flying multiple times just to take advantage of this “promo”.

  5. It might not change behavior, but maybe it engenders some good will toward AAdvantage for the average member, even if everyone posting here recognizes it as skin-deep.

    I’m sure the AAdvantage brand builds value by demonstrating there’s always some sort of “deal” members can “take advantage of.” Why else do they do things like back-to-back “bonuses” on purchased miles rather than just lowering the price to begin with?

    Does anyone consume more Koch products/services just because they advertised in the Super Bowl? if not, what was the purpose of the ad?

    Even if it’s weak, this is ultimately good PR for American and AAdvantage, for marginal cost.

  6. Not just stingy, but trying to get people to violate medical advice to take non-essential flights during a pandemic for almost no discount? Sorry, not interested. I keep looking at things at the far end of the flight schedules and the redemption rates (for premium international flights) are ludicrous and far higher than the charts (which are now only theoretical) say they should be. If they don’t think travel will recover until late 2022/2023, they need to be more creative.

  7. This is a fart in the wind. It stinks but is so weak that it’s barely enough to register attention. I would not have considered this newsworthy other than as comic relief or an object lesson that AA still has not figured out how to run a loyalty program.

  8. As a comparison in ineptitude, RT NYC- MAD Business Class award these days is 8 hours shorter each way and 10K Miles total cheaper (about same small taxes) on Royal Air Maroc via Casablanca than on AA via DFW, BUT it doesn’t earn the 4×250 bonus miles.

  9. I’m trying to figure out if it’s per journey, or per flight segment. Many of the 5k web specials are 3 segment itineraries, so 750 miles back on that is a pretty stellar return. Any idea on the definition of “per flight”?

  10. @ Chase

    There’s a whole story and argument about that: “Flight” traditionally, especialy in FF-speak , means “All Segments with Same Flight Number”, which has often resulted in disppointments when , for instance (just an created example to show the difference), a SEATTLE-MIAMI -LONDON credits at the SEA -LON nonstop 4789 miles (assuming both sectors have the same flight number, which can happen) instead of the SEA -MIA 2731 miles PLUS the MIA LON 4426 miles.

    I would assume “Flight” would have the same definition here, exceptionally not in order to screw passengers but because of the constant numbers in the databases which are difficult to alter for such exceptions.

    Not many people would INTENTIONALLY fly this route outside a mileage run, but in the good old days of easy mileage runs, I would (and I made sure to choose segments with different flight numbers).

  11. Now if they allowed travelers to credit those miles towards Elite Qualifying Miles (elite status), they’d be on too something !

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