American Rewards Loyal Premium Cabin Travelers In 2015

With the economy improved and US airlines making record profits, loyalty programs sure don’t feel quite as rewarding as they used to.

Revenue versus loyalty

Airlines seem to be all about rewarding revenue as opposed to loyalty. While there’s of course merit to rewarding high revenue flyers, I think there’s a risk in focusing too much on it.

We’ve seen both Delta SkyMiles and United MileagePlus switch to revenue based programs for 2015, whereby they’ll be awarding redeemable miles based on revenue as opposed to miles flown.

Airline revenue and inventory management is incredibly complex, and there’s something to be said for the person that might not be flying full fare first or business class, but that’s still consistently paying a premium to fly their preferred carrier. Especially in comparison to someone that’s flying paid first class due to a corporate contract where they don’t have a choice, or someone that’s choosing an airline purely because on the schedule.

American-Business-Class

American will reward premium cabin travelers

American AAdvantage just announced a promotion for 2015 which is quite possibly the greatest slap in the face I’ve seen to Delta SkyMiles and United MileagePlus.

American wants to reward high revenue flyers as well… but they want to do that without taking away something from everyone else.

For travel between January 1 and December 31, 2015, American will be awarding bonus redeemable miles to those booking paid premium cabin tickets.

The bonus varies based on:

  • Your AAdvantage status
  • Your fare class flown (discounted business or full fare first/business class)
  • The distance of your flight (greater or less than 3,000 miles)

American will be awarding anywhere from 250 to 12,000 bonus AAdvantage miles per segment flown, as follows:

Non-elite AAdvantage members

Non-elite Dividend Miles members
AAdvantage Gold & Platinum

Dividend Miles Silver, Gold, & Platinum
AAdvantage Executive Platinum

Dividend Miles Chairman’s Preferred
Medium and Short-haul flights less than 3,000 miles
Discounted Business Class Z*, I
n/a250500
Medium and Short-haul flights less than 3,000 miles
First / Business Class F, A, P, C, J, R, D
2505001,000
Long-haul flights greater than 3,000 miles and JFK-SFO/LAX
Discounted Business Class Z*, I
n/a1,0003,500
Long-haul flights greater than 3,000 miles and JFK-SFO/LAX
First / Business Class F, A, P, C, J, R, D
3,0006,00012,000

The promotion is valid for travel on all American and US Airways marketed and operated flights (including codeshare flights between the two carriers), and American and US Airways marketed flights that are operated by partners, including British Airways, Iberia, Finnair, Japan Airlines, and Qantas.

Registration is not required for this promotion, and bonus AAdvantage miles should post to eligible accounts automatically. Previously booked travel qualifies for the promotion, as long as it’s flown in 2015.

Keep in mind that this bonus is in addition to American increasing the bonus miles earned for travel in paid business class as of January 1, 2015. As part of the new AAdvantage program, members will earn a 50% bonus for travel in paid business class, rather than a 25% bonus.

Here’s how Suzanne Rubin, President of AAdvantage, describes the promotion:

President, AAdvantage Loyalty Program Suzanne Rubin said: “As the largest airline in the world, with a global network that spans 54 countries, our frequent flyer program must also be the best in the business. A mile flown continues to be a mile earned in AAdvantage, and now we’re going to reward customers even more when they purchase a First or Business Class ticket.”

Hey Delta! Hey United!

Haters

Bottom line

Game. Set. Match. American.

This is how you reward high revenue flyers. Not by taking away something from 80% of members, but rather by actually offering incremental benefits to the people who spend the most with your airline.

Now we just have to hope that this is actually the direction they’re headed, and not a temporary distraction. American AAdvantage really has the opportunity to differentiate themselves from the competition, and I hope they seize that opportunity.

Kudos, American! I don’t think I could be feeling much better about the AAdvantage program at this point.

What do you think of this promotion, especially in comparison to the changes at Delta and United? Will it impact who you fly with?

Comments

  1. Do you really think they’re doing this to slap Delta and United? Or could it be an additional way to hope their elites don’t leave during the merger transition, and upcoming IT issues?

  2. @ Neil S. — I think they’ve been doing quite a good job with the merger, so I don’t think it’s the latter. I don’t think it’s necessarily to “slap” Delta and United, though I do genuinely think it’s them trying to differentiate themselves and say “hey, we’re different.” I just hope their actions in the future reflect this as well.

  3. You’re delusional. This will lead to more devaluations. Forget getting a standard (25,000 milles or whatever) award in the future. 50,000 will be the new normal. And 80% of members, including all of the premium travelers who haven’t been able to spend their miles (or, silly them, have been hoping to spend them for retirement travel) will be hosed.

    No matter what, it’s a DOJ-approved oligopoly, and the airlines can just hose the program members.

  4. @ John Tarik — Well there’s no doubt award availability in general is on the decline, though from my perspective, I’m never redeeming American miles on American metal. I redeem them for travel on their (superior) partner airlines, which offer a better product. And that space is always at the saver level.

  5. They want to reward their best passengers without taking anything away from everyone else … except the ability for everyone else to find reasonable ways to use their miles.

  6. Booking a F class ticket to SFO through American for a conference in the spring! And I live in Atlanta, so you KNOW I am really jumping ship if I’m making the conscious effort to fly American.

  7. Take the AA blinders off. They’ll still come up short of miles earned from a top tier United or Delta flier on a given paid ticket.

    Given a $5k ticket JFK-LHR-JFK in business class, an American elite will earn:
    ~7k base miles
    ~3500 class of service miles
    – 12,000 bonus miles
    Total – 22,500 or so

    A $5k JFK-LHR-JFK ticket with Delta as a top tier elite, you’ll earn 55,000 miles… more than twice as many. Even if Skymiles has worse “low” availability, earning double the miles for flights surely makes up for that.

  8. @ Justin — Right, no airline will be the absolute best for everyone. But American has struck a great balance here, if you ask me. If you exclusively fly full fare international business class then the Delta and United systems are still better for you. However, if you have a mix of travel patterns, then almost certainly American would be better. I think this is just a great example of rewarding premium passengers without taking something away from others.

    And by the way, the 12,000 miles miles is one-way. So an Executive Platinum flying New York to London roundtrip would earn ~40,000 miles. So the breakeven point there for a top tier elite is about a $4,000 transatlantic ticket.

    Meanwhile American elites come out ahead on the transcons in terms of miles earned for first/business class tickets.

  9. @ Bgriff — It all depends how you’re looking to redeem your miles. I still find American miles to be among the most valuable currencies out there.

  10. Are you really that naive? This is a defensive move by AA given competitors are awarding FAR more miles for paid premium cabin travel. One of the other commenters did the math for you too.

    Printing truckloads of more miles for premium cabin (read: higher REVENUE) fliers then creates further oversupply of miles, leading to award chart devaluation. Delta and United have already done theirs. American Airlines will follow for the 2016 or 2017 program year.

    At best, this represents a 12-18 month window to earn faster for a PREMIUM-based flier (ie. the same folks that Delta and United are looking to reward) before the house of cards collapses – and at that point, the non-elite, economy class flier is going to be hosed. Could be far worse than how the Delta or United flier got hosed, won’t know until we see how badly American Airlines devalues.

    This isn’t differentiation by AA. It’s imitation, just not as obvious as the other 2 guys.

  11. @Justin

    Not if you can only redeem those miles for subpar international business class products on 2-star SkyTeam airlines. At least on American, you can find a way to redeem miles for first class international carriers like Cathay Pacific, Qatar Airways, Japan Airlines or Etihad.

    Delta is fine if you only care about domestic travel, but you won’t be able to redeem for any “aspirational rewards” if you’re hung up on SkyMiles because you can’t redeem for international first class. SkyMiles will get you there but it won’t be an very luxurious ride. This is a blog that writes about flights that include turndown service, 5-star dining and Krug. For Lucky’s travel purposes, AAdvantage is the better option because he cares about a cutting-edge premium cabin experience- something SkyTeam severely lacks outside of Korean Air.

  12. @ AS — Competitors are given “FAR” more miles? Using the math by Justin above, we’re talking about 40,000 miles vs. 55,000 miles. And keep in mind on that $6K ticket roughly $400 are taxes, so it’s really 40,000 miles vs. 50,000 miles. On transcons American elites will earn more miles. On most ultra longhaul flights American elites will earn more miles.

    Again, American isn’t the most rewarding for everyone under any circumstance. But I absolutely commend them for adding benefits for premium customers without taking them away from others.

  13. AA is NOT ahead in premium transcons.

    UA/DL $3000 JFK-LAX for top tier would be $3000 x 11 = 33,000 RDM

    AA EXP would be 4950mi x 250% + 1000 = 12375 + 12000 = 24,375 RDM

    slightly over 25% short. The math favors UA/DL even more if the ticket goes more expensive.

  14. @ patricia — The 12,000 mile bonus is each way. Using your numbers, you’d earn 36,375 American miles, or 33,000 Delta/United miles, no?

  15. @ Justin

    This is why DL’s stinginess with award availability doesn’t bother me quite as much. As a top tier elite, you earn way more miles for every flight that you typically do on other airlines. It makes the fact that standard awards are almost never available go down a little easier. Sure you can’t use Skymiles for the sort of aspirational longhaul award trips that Lucky features on this blog, but I don’t travel internationally for pleasure very often, and in the rare cases when I do and I can get a fare sale, I often pay for the ticket in order to maintain status.

    For me, I tend to find the most value in using my miles for domestic trips for my family that I would otherwise be paying for out of pocket. I get that those trips are squeezing the most value out of my miles, but I never come close to running out of miles for the times that I do take the more aspirational trips. In a weird way, the fact that Skymiles are so useless for those kind of awards makes me less miserly about using them for domestic flights and even though their “saver” awards are never available, they tend to have decent medium level ability, which is useful when the other more generous programs are also sold out at the saver level.

    While I would never advocate solely accruing Delta miles, I find that the day-to-day domestic flying experience on them in terms of upgrades and service tends to be a bit better than AA/US or UA and they definitely serve a purpose that fits my travel needs.

  16. I note that Cathay Pacific is not one of the participating One World Partners. This means when Cathay comes to Boston in May and I start making my quarterly trips to Asia in business class direct on Cathay, I will lose out. Adding five to nine hour with a connection for the points just isn’t worth it.

  17. This in my mind does come pretty close to being a decent deal for AAs premium cabin int’l flyers compared to the new earning structures of UA/DL. With that said the one place I would say it is still very weak is on expensive domestic flights in particular last minute tickets on shorts routes that have to be purchased in Y. I am surprised they didn’t include full fare Y in the bonus structure.

  18. big kudos to Justin, AS & patricia, for not reading anything & come up with their genius math that DL earns way better on internal long haul premium cabins. that lucky has to repeat 3 times what he had stated in main blog content is trivial, since lucky is making too much $ off his readers.

    but of course Justin, AS & patricia wont see my compliments because they dont read, they just write.

  19. @ Ben — Unfortunately, the following is not true: “A mile flown continues to be a mile earned in AAdvantage”. It would true be if AA would award at least 1 EQM per mile flown. Since DL awards at least 100% MQM on all DL-operated flights and has rollover MQMs, qualifying for DL Diamond remains MUCH easier than qualifying for AA Executive Platinum.

  20. @ Ben — You are right. Not enough coffee. 🙂 But, earning EXP via EQPs is not easy for the average traveler. I would be thrilled if AA would drop EQPs and award class of service bonus EQMs (as US does).

  21. @ Gene — Well, but along the same lines that would make status easier to attain, which would ultimately swell elite ranks and water down benefit. Delta’s top tier requires 125K vs. American’s 100K mile tier, so not sure how that can be held against American. That might be one of the many reasons that upgrades clear fairly consistently.

  22. Lucky, does this mean that cheap BA business class seats you booked a couple of weeks ago will qualify for the bonus?

  23. I don’t think they are doing it as a slap in the face to anyone.

    I don’t even fly American and I am very impressed by how they have designed their program for 2015 and I am actually considering leaving behind United for American. I think American is actually thinking about EVERYONE that flys with them and that’s what’s important to me. Sometimes I fly business class for work so a nice added bonus is great to have. Sometimes I fly coach for leisure trips and I would like to continue to be rewarded with a level of benefit that make its like I am actually valued. And I think American is doing that.

    I wouldn’t be surprised if you see more and more people like me who are switching over to American in 2015 after what Delta and United decided to do. We vote with our wallet and my vote just might be changing.

  24. This is ridiculously lucrative I now realize if you are based in SFO/LAX and use JFK as a connection to Europe as you earn the bonus based on each segment and the tcon flights get up to 12K miles as well. So that is nearly 50K miles extra round trip.

  25. This counter move by AA probably ensures that, at least in the short term, there may be some hesitancy among the major world airlines to jump on the bandwagon of that monstrosity known as the revenue-based system (r-b.s.), which aims to replace loyalty with $$ to turn frequent-flying into a plutocracy. As the originator of the loyalty-based FF system, AA probably wants to protect that legacy…

    There is no doubt in my mind that this move is aimed squarely at countering the migration of DL and their lackey, UA, to the r-b.s., as well as to attract the large number of members of these FF programs who may feel disenfranchised or unwanted as a result.

  26. I’m not sure of the source of all of the negativity in these comments. This is great news and from the wording in the press releases, American is squarely targeting UA and DL flyers who are frustrated by the changes to those programs. If nothing else, it shows that some of the airlines actually see value in a traditional loyalty program and it is too quick to assume that all airlines will quickly go to a revenue based program.

    – 2 separate people do erroneous calculations to “prove” how Delta will still give more miles than American and both contain math errors. Once corrected by Lucky, in one example an AA flyer would actually get more miles and in the other, the difference is much smaller than originally shown (and that’s for a $5k ticket – if you are buying those, you probably don’t need to worry about FF miles anyway).

    – Others harp on the idea that more miles mean more devaluations. This may be true, but United already did their big devaluation and Delta is constantly devaluing. In the short term, at least, the AA award chart is, in general, better than United’s and far superior to Delta’s

    – And besides the other two points, we all know that, no matter what the award chart says, Delta has extremely limited low level inventory; even if the Delta award chart was better, I would still prefer AA miles because the miles cost of the released award inventory will be lower (and, being a reader of this blog, I am better prepared than 99% of the other flyers out there to get the inventory that is available).

    I used to fly Delta until I realized how difficult it was/is to find award space. I then switched to United because they have much better award availability and were convenient. Next year, I will be flying AA (even though it will be a little more inconvenient) because they are telling me that they want business from people like me. If enough of us do this, maybe United and Delta will change their minds for 2016.

    Lucky is not a shill for AA, he is correctly highlighting the best, current frequent flyer programs.

  27. @Phil – “If nothing else, it shows that some of the airlines actually see value in a traditional loyalty program and it is too quick to assume that all airlines will quickly go to a revenue based program.”

    The only thing it shows is that AA isn’t going to a revenue based program RIGHT NOW. I think they eventually go revenue based once the merger/integration issues are worked out.

  28. @Brian L

    I don’t think it’s safe to assume that they definitely will switch to revenue based. If, in 2015, they reap the benefits of being the only US legacy carrier without a revenue-based loyalty program by not only drawing United and Delta elites, but also travelers like me with family who live abroad and buy more long haul tickets to NZ or the Middle East than domestic tickets, they might have found a way to kick Delta out of the #1 spot. They’ve found something that really makes them stand out and makes leisure and semi-frequent travelers want to prefer them over Delta. I don’t think they’d bite the hand that feeds them if this move turns out to be a big success for them. IF this is a success, they would have seen that travelers are easy to leave airlines that they don’t feel reward their loyalty properly…I don’t think they’d take that chance.

  29. @Reine – “If, in 2015, they reap the benefits”

    IF they reap the benefits. IF. If, on the other hand the effect is negligible, I’d bet they’d go revenue based eventually.

    “they might have found a way to kick Delta out of the #1 spot”

    DL has had a crappy FF program for as long as I can remember. They’re number 1 not because of the FF program, but because they run a good overall operation. That’s what important for airline revenue, not the FF program.

    “They’ve found something that really makes them stand out and makes leisure and semi-frequent travelers want to prefer them over Delta.”

    Most leisure and SEMI-frequent travelers probably don’t care too much about FF programs.

    “they would have seen that travelers are easy to leave airlines that they don’t feel reward their loyalty properly”

    Travelers or FFers? Not necessarily the same thing.

  30. Hi Lucky,

    Would a business campaign fare in Finnair still qualify for elite status? If it does, I am wondering how many miles a paid business class fare on AY from Del-Hel-jfk will get for travel in Feb. I am an AA platinum on the fast track offer to qualify in 2015.

    Thanks!

    –Karthik

  31. If I book LHR-JFK-LAX-JFK-LHR in business class (I fare) and upgrade to first (A fare), will I receive 3.5 K miles or 12K miles for each segment? Thanks!

  32. Hey Ben, sorry to post on an old thread but my head is spinning about whom to credit miles to for an upcoming transcon on BA. What does “American marketed flights that are operated by partners, including British Airways” mean? I have a BA flight number on BA metal booked on ba.com on JFK-LAX-CDG, returning ORY-JFK on OpenSkies. Presumably those flights are also marketed and sold as AA codeshares. Does the bonus still apply?

  33. @ Josh — You need to book the flight as an actual American codeshare for it to count towards the bonus. So a British Airways operated flight wouldn’t qualify unless you booked it as an American flight number.

  34. Hi Ben,
    I see people bashing United for going the revenue based way but for someone assuming base status in AA & United who will fly business class to Munich, wouldn’t United be a better option assuming I spend 10k on teh ticket. won’t I be earning more miles with United compared to American spending the same amount?

  35. Permission to re-re-post to an old, old thread… sorry. I understand that the bonus doesn’t apply to partner flights. But — since this promo has now been extended into 2016 — does it also not apply to flights on AA metal that are ticketed as codeshares? I’m booking CMB-DOH-CDG-JFK and the final leg is on AA, but it tickets as a QR flight. No dice, right? (The AA flight number is twice the price for the exact same seat.)

  36. @ Josh — Correct. An American marketed flight on another carrier would qualify, but an American operated flight marketed by another airline wouldn’t qualify.

  37. Is the class of service bonus an ongoing promotion by which you get these bonus miles still ongoing in 2016?

Leave a Reply

Your email address will not be published. Required fields are marked *