American AAdvantage policy change on non-expiring miles as of November 1, 2012

American just sent out the following email to AAdvantage members with accounts that were opened before July 1, 1989:

Dear _______,

For more than 30 years the American Airlines AAdvantage® program has been making travel special. Thank you for your loyalty for so many years as an AAdvantage member.

In order to streamline our program, we are announcing a change to AAdvantage miles earned before July 1, 1989, also called Miles With No Expiration.

Starting November 1, 2012, these miles will automatically be converted to Miles Subject to Expiration, and because of your tenured loyalty, you will earn a 25% mileage bonus on every unredeemed mile earned prior to July 1, 1989. To have your Miles With No Expiration converted and to earn the mileage bonus, you do not need to take any action. For more information about this change, please visit AA.com/MileConversion.

Once your miles have been converted, as long as you earn or redeem AAdvantage miles at least once every 18 months, your miles will not expire. This is our normal mileage policy and more information can be found at AA.com/AAdvantageTerms.

It is easy to keep your account active! In addition to earning AAdvantage miles for travel, you can earn miles for making everyday purchases such as dining out, shopping and paying your electricity bill. Plus, you can redeem miles for hotel stays, rental cars, flight awards, and more! Find out more ways to earn and redeem miles by visiting AA.com/AAdvantage.

Finally, to receive special offers and exclusive promotions, be sure to update your account at AA.com/MyAccount and sign up for email notifications.

Thank you for your continued loyalty!

Sincerely,
Suzanne L. Rubin
President
AAdvantage® Loyalty Program

If your AAdvantage account was opened before July 1, 1989, you’ll probably see that your miles without expiration are still listed separately.

Now, I was only born in 1990 so this doesn’t apply to me, though I do have several family members with “older” accounts.

On one hand it’s nice they’ll earn a 25% bonus on those miles without expiration. What I wasn’t aware of (given that I didn’t really pay attention to their mileage program of 20+ years ago), is that members with “old” miles still have access to certain better value awards, outlined here. Just to be perfectly clear, miles will continue not to expire as long as there’s at least some qualifying activity every 18 months.

Anyway, I certainly see why some people are frustrated, though I suspect 90%+ of people had no clue about the “special” award chart for “old” miles, and will appreciate the 25% mileage bonus. It’s definitely an interesting precedent, though. We’ve seen airlines get out of obligations for lifetime status through mergers, takeovers, and liquidation, but this is the first time I’ve seen an airline still in business change the terms while operating independently.

Comments

  1. Any guidance as to usefulness of orphan non-expiring miles? Can a 10,000-mile non-expiring balance be used to reserve an “old” award by then using a combination of mileage?

  2. @ colleen — That’s the issue, unfortunately you have to entirely use non-expiring miles for an “old” award, so you’re best off just enjoying the 25% bonus. 🙂

  3. Well, I’m sure that many of us (me included) are more than just “frustrated”… “livid” might be a better word. I joihed AAdvantage on 5/1/81 (my ID is only 7 digits!), and still have 423,000 non-expiring miles. We were promised over and over that these miles would “never expire”, and I have been carefully saving these for travel after I retire. I’ve even redeemed miles on other airlines with far less convenient schedules, simply to keep these precious “never expire” miles. So to have AA suddenly throw their oldest and most loyal travelers under the bus like this goes way over the line. Obviously, AA’s goal (which started with the first change to expirable miles) has been to reduce the accrued liability on their balance sheet for all the unredeemed miles people are holding. I can understand that, and have no problem with changes they announce which will affect miles earned in the future. But to retroactively change the rules like this for miles I’ve already accrued is beyond maddening. Eliminating the “no expiration” is bad enough, although there are ways to work around that. But FAR worse is the fact that AA is also breaking its long-stated promise that these older miles can always be redeemed for original “regular awards”. For example, a first-class trip for two between the continental U.S. and Hawaii was only 75k miles under the original award structure — that same trip will now cost me 190k miles! That’s 2.5 times more – so offering a paltry 25% “bonus” on converted miles is hardly just compensation for what they’re taking away. I would sue them, but am sure that fine print protects them from any action. But just because it’s legal sure doesn’t make it right – and the fact remains that it’s an incredibly lousy way to treat customers that have been loyal to AA for over 30 years. I guarantee you that AA will never see another dime from me, and that the only time I’ll board an AA flight in the future will be to redeem what little remains of the former value of my hard-earned miles. (I say “hard-earned” because, back in the early days, you only earned miles for real “butt-in-seat” travel, not for purchases on credit cards and all the other ways you can now accumulate miles.)

  4. Anyone with the option to use the miles with no expiration has at least 10,000. If you have fewer than 20,000 “old” miles, the 10,000 mile award that upgrades any coach fare with no pre purchase requirement to first class is quite valuable. Of course, business travelers buy most of these kinds of fares – usually for last minute trips. If you expect to use that kind of fare within the next year (especially if it will be a longer route), it would in my opinon be a better use of 10,000 miles than keeping them for a 2,500 mile bonus for use under the current structure. If you have tens of thousands of “old” miles, I recommend you study the old award chart (oh, the memories it brings back!)because there are several awards of high value that literally haven’t been seen in decades!

  5. I read the AA e mail with great interest. With the bonus, I’ll have a little over 1000 old miles. In the early days, I earned and burned. If you remember the triple miles bonus in the late 80’s, you’ll agree that AA was good back then.

    @Rob, I feel your pain.

  6. Rob- AA has the rt to change the terms of their program. Further, they are in bankruptcy so suing does ZERO good. Bankruptcy is the right time to change stupid terms like this anyway.

  7. What else can you expect from the airline that can not decide whether it is running a breast cancer program or an airline.
    I have 250k old and also was “saving” these for more convenient time to use.
    It was so different line in 80’s, when Crandall was at wheel, Now it’s run
    amok by bean counters , s. as the previous president. The in 90’s
    the hell started broke loose, at ORD arrivals waited up to 2 hrs to gate open and so on.
    It is such a shame to see and fine, classic an proud American airline and flag ship
    to be ruined by new school experts.

  8. Certainly, the ultimate, AA was running acccording to it’s time tables, had gates for planes, the premium clients were LEAD to clubs at many european airports from the gate, if open seats, surprise upgrades to C and F at the gate, all kind REAL offers to especially then Gold members (others didn’t exist) etc. etc.
    Compare to new scholl bean counters, their
    way to promote brand loyalty.
    A big mistake was to buy Eastern with it’s
    pilot/mechanic strike generals

  9. AA repeatedly stated these miles would never expire. Like Rob I’ve been saving them for years because the can be used for some awards that simple aren’t available under the new structure (like and upgrade to F from any fare for the transcon flights NY-LA.

    This is a clear breach of contract and if they don’t reverse their position they’ll be dealing with me in court.

  10. I guess “never expire” is AA NewSpeak for “whenever we unilaterally decide to”. How Double Plus Ungood of them!

  11. @Steve

    As was mentioned above, AA’s in BK, so suing them is likely a waste of time. That’s why AAirlines file BK, so they can get out of contracts that are costing them too much.

    One of the things that we are finding with society in general is that it makes no sense to accept concessions today with promises of something more down the road. In the future, another group of people can just as easily decide that the promises made long ago are too costly to deliver on.

  12. Just a thought here, but is it possible one of their reasons for doing this might be that a significant percentage of the older account members have simply passed away or are beyond a point in life where using miles are still feasable? Because how could they verify that one way or the other and meanwhile there are millions of miles in accounts that have been untouched for years but AA still asumes the liability. Anyway, just a thought.

  13. Chapter 11 or not, anyone want to take a bet as to how long it will be before the first class-action lawsuit is filed? Ultimately it will be up to a judge to decide which liabilities can be cancelled. Since the “old miles” were the result of plaintiffs winning a prior court case against AA, I’d suspect most judges would take a dim view of allowing them to now walk away from that agreement – especially since it is a commitment to customers for future services vs. a short-term cash liability.

    And “will never expire” is a very clear and unequivocal term – much stronger than “will not expire” which doesn’t imply a timeframe. As others have pointed out, a class-action suit will certainly muddy the waters for a clean and quick exit from Ch 11. I just can’t see why they’re trying to pull this nonsense at all, since the number of truly affected customers must be pretty small by now. It’s also going to earn them lots of negative PR at a time when that’s the last thing they need. Just seems to me like an incredibly stupid move all the way around.

    But as they say, “it’s not over until it’s over”. AA opened this Pandora’s Box, and I’ll bet there are more of us than they think who will raise a major stink about it. A new thread over at FlyerTalk started at 2:30 yesterday is already at 6 pages. As more and more people read the letter and figure out what it means to them, I think the volume and momentum will build.

    Rob

  14. I also kept these miles for use in retirement, nearly 900,000 of them. Just never felt that American would repudiate their commitment. Hopefully they will reconsider.

  15. What a mess!!! We only have a little over 4 1/2 months to redeem these miles. I myself, like many others, treated these old miles like GOLD and always usd the expiring miles to travel. I have 126K Non expiring miles and my wife has 65K.
    I called three times this morning to AA to reservations and once to AAdvatage Cust. Service and got four people that were totally unkbowledgeable about the old miles. When you get a “unknowledgeable”b one one the phone tghe best thing to do is say thank you so much and move on and try again.
    I had three questions:
    One was if you book a flight for next year at this time and the latest you can come back at this point is around June 13…can you, after you are ticketed, change the return date sine they were with old miles.
    #2 If you redeem an old award and then have to cancel can thye old miles be put back in with the 25% bonus
    #3. Is the old award based on ticketing type such as “T”class or is it based on the current lowest award level. For instance, right now the cheapest rt ticket to Hawaii is 35K. Would the old mile award have to come out of that inventory?
    Can anyone help?

  16. Rob, I agree with you. Regardless of the legalities, right is right and “will never expire” means “will never expire.”

    Jerry, I share your frustration. But if I read AA’s letter correctly, we have more than 4 1/2 months to redeem our miles. On 1 Nov 2012 your Non-expiring Miles will automatically convert to Miles Subject to Expiration. After that, your miles will not expire until 18 months later, that is, until 1 May 2014. And even then, they expire only if there has been no activity in your account.

    Anyone who’s reading this, please correct me if I am mistaken.

  17. Our law firm is investigating American’s attempt to convert “Miles with No Expiration” to “Miles Subject to Expiration.” We are considering bringing a case against American Airlines on this matter and invite you to contact us. Our firm has successfully represented consumers against companies in bankruptcy, including our representation of Sharper Image Gift Card Holders. If you wish to discuss with us your potential rights in this matter, please contact Clint Krislov, Mike Karnuth or Chris Hack at Krislov & Associates, Ltd., (312) 606-0500; or by email clint@krislovlaw.com; mike@krislovlaw.com; or chris@krislovlaw.com. You can also visit our website at http://www.krislovlaw.com.

  18. Lucky I really am loosing faith in you. Either you’re far too busy traveling the world to lift a finger to look into what should be a major story or you have become way too close to the travel suppliers and are unwilling to risk their wrath.

    I know those are harsh words but if you took even a small amount of time to understand what is going on you would, or should, be mortified by what AA has done.

    I’m not talking about voiding a more than 20 year commitment that these miles would never expire. I’m talking about the fact that the offer they just made to honor the original award chart through the end of October is a sham.

    You want specifics?

    The 30A award allows you to use any fare, but AA now says you have you use full Y. That’s not honoring the award.

    The original awards had no capacity controls, but they are insisting they apply.

    The original awards were good for two years from date of issue (one year for the certificate, then a year on the ticket). AA refuses to do that, no small thing when the award at issue is an upgrade isn’t supposed to need a route or even a name when cashed in.

    There is more, much more but because only long time, loyal customers are affected the bulk of AAdvantage customers aren’t affected. Fair enough, but I expected much better from you.

    Maybe blogging isn’t the New York Times but if you want a reputation as a reporter instead of a company shill you need to at least be able to spot a story when it hits you on the head and respond.

    At best your eye has drifted far from the ball. At worst you have morphed into something that while amusing is no longer substantial.

    I’ve seen other comments calling into question where you are going. I think this failure is your Waterloo. It has become very unclear who’s interests you are looking out for. Unless it is your readers, well, then as I said amusing but not to be trusted.

  19. @ Steve — It’s true at first that I didn’t realize just how significant this was, and that’s because I had never even heard of this award chart before the change happened. I’m young, and for that I apologize.

    Is what American is doing wrong? Absolutely. But rather than me being a shill, it’s more a reflection of how I view the airline industry. They all suck, and they all take unilateral action when it’s convenient, without giving the consumer the same privilege. This isn’t specific to American. It’s the same with United, when they rescinded promised million miler benefits, or when they canceled tickets that were issued to HK (without discussing the merits of it, the fact is that a ticket was issued and they made changes more than 24 hours later, where the consumer wouldn’t have the same opportunity to make a change).

    This is an industry that consistently denies customers seats on planes when they have a confirmed reservation. This is an industry which takes no responsibility for getting anyone anywhere on-time, but rather just promises transportation between point A and B with no set schedule.

    So rather than calling me a shill, call me jaded. In my short time studying the airline industry I’ve realized you can’t hold them accountable to any standard. Is it outrageous? Yes. But there’s nothing we can do about it.

  20. Ha ha ha – shows how old I am though I think I am young. Have 7K “old” miles earned back when I was in college and first became a AA member – also have a 7 dig number. I guess this means I really am middle aged or to Lucky, maybe even old. Actually, as I told someone today, I was on the cusp of change – took Latin and computer science in high school – last 3 years that Latin was offered in that public high school and first year computer sciences (on Radio Shack TRS-80s) was offered. Time marches on!

  21. I have been an AAdvantage member since May 1, 1981; my AA number is 157xxxx. I have more than 1,500,000 program miles with AA. I stand to lose about 230,000 mile because of this rip-off. They are devaluing these miles by approximately 61%. There will be a class action over this and I will support it.

  22. WOW! My AA # is 7 digits and starts with a “B.” HaHa. I never touched my 80K original miles since the 80’s and was going to use them in March for a 35th wedding anniversary for Hawaii. I was posted to Toronto for the past 1.5 years, got back last month and never saw this major renege until today. Hey, Lucky: thanks for this forum, much appreciated.

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