Yesterday American published their 2013 Elite Rewards, which no doubt modified my travel plans for the rest of the year, as I’ve decided I have to go for 150,000 elite qualifying miles with American this year to earn 100,000 bonus redeemable miles (or some other combination of rewards).
But with the upcoming merger with US Airways, there’s lots of speculation about the implications of this promotion. Does the promotion tell us something about what we can expect in the combined airline?
Some of the speculation I’ve seen centers around things like:
- This year there are four “tiers” of rewards, while last year there were three tiers. Could this possibly align with the “new” AAdvantage program having four tiers instead of three?
- Why would American offer “sticker” upgrades as an option when it’s very likely they’ll be going away with the merger?
- Why would American offer systemwide upgrades as an option when it’s very likely they’ll be making changes to this benefit with the merger?
And these are all reasonable questions that I don’t know the answers to, so all I can do is speculate. Usually I’m the person that reads too much into things, though in this case I don’t think any of the above have implications. For that matter I don’t think American and US Airways are even far enough along in the merger process to know the answers to most of the above questions, let alone take them into consideration when designing a promotion.
While it’s interesting there are four award tiers instead of three, they would in no way align with potential four tier elite program. If the “new” American were to have four elite tiers they’d be at 25,000 miles, 50,000 miles, 75,000 miles, and 100,000/125,000 miles. So the reward thresholds of 40,000 miles, 75,000 miles, 125,000 miles, and 150,000 miles wouldn’t make sense, given that they’re designed to be “between” tiers.
I do think it’s fairly certain sticker upgrades will go away with the merger. Why are they offering them through this promotion? Probably because some people value them greatly for the time being, and it’ll likely be at least the end of the year before they even think of getting rid of them. They can be purchased for $30 a pop so I really don’t think they’re a good value given the other options, but then again not everyone chooses wisely, so…
The systemwide upgrades are the real surprise here. While I wish it weren’t the case, I’d be willing to bet almost anything that American will change their systemwide upgrade policy with the merger. Presently they give Executive Platinum members eight systemwide upgrades for qualifying, and they have no fare restrictions. Not only do they give top tier elites more systemwide upgrades than the other legacy carriers, but they also have by far the fewest restrictions. So when it’s a near guarantee that this will be changing in the next year, why are they potentially giving Executive Platinum seven extra systemwide upgrades, for a total of 15?
I’d say probably because they haven’t yet decided on what changes they’ll make to systemwide upgrades, and at the end of the day systemwide upgrades probably carry less liability than miles. After all, they’re space available upgrade vouchers, so to some degree what do they care if there are a few more out there in circulation?
There’s only one way I’ll read into this promotion, and it’s as follows. We’ve seen the Delta and Northwest merger. At the time it seemed like chaos. Then we saw the United and Continental merger, which was way more chaotic, and as a relative matter made the Delta and Northwest merger look like a piece of cake. American and US Airways know they have a long road ahead of them, and it’s easy to lose frequent flyers in the process, as “harmonizing” systems rarely goes smoothly. And let’s be honest, when mergers happen the airlines take the worst of both programs, so people consider switching their business for good reason.
Let’s say a majority of the American merger happens next year. Isn’t it almost in American’s best interest to throw their top tier elites an additional handful of systemwide upgrades with no fare restrictions to use during that time? Even if they want to leave, it’s unlikely they would with so many upgrades or other rewards. And as any elite member knows, once you’ve requalified you’re “hooked,” and it’s very tough to switch carriers.
So I really don’t think there’s too much to read into here, other than American perhaps apologizing in advance for what will be a rocky 12-18 months.
What do you guys think?