Etihad Guest Devaluation Coming: The Good, The Bad, And The Ugly

Overall I’m a big fan of Etihad Airways. While their loyalty program, Etihad Guest, has some strong points, it’s not my favorite. So virtually all of my travel on Etihad is booked using American AAdvantage miles. As a result, I’m most curious about any program changes at Etihad Guest in terms of whether they impact AAdvantage redemptions or not.

Etihad-A340

Anyway, Etihad Guest has announced some program changes, which kick in for bookings made as of July 8, 2015. Here’s how they describe the changes:

We are introducing some changes to the Etihad Guest programme that relate to how members earn and spend miles with Etihad Airways.

These reflect the increasing demand from members for seats, particularly in Business and First Class cabins, and will ensure the programme remains attractive, competitive and sustainable.

Changes will come into effect on 8 July 2015 and will apply to all new bookings made with Etihad Airways. As a result, some of the Terms & Conditions of the programme will also change.

Etihad-Guest-Changes

Here’s a rundown of the changes:

Earning Etihad Guest miles

Etihad will be changing the number of Etihad Guest miles you earn for tickets booked as of July 8, 2015. Here’s how they describe the changes in mileage earning:

On certain fare classes, we are adjusting the number of Etihad Guest Miles being awarded to members when they fly with Etihad Airways.

Five fare classes will now offer more miles than they do today, whilst two will offer fewer.

Overall, based on historical booking patterns, the number of miles earned by our members will increase under the new rules. These changes will come into effect for all new Etihad Airways tickets issued from 8 July onwards.

And here’s the new chart:

Etihad-Guest-5

When I first saw that they were adjusting the number of miles earned, I assumed it would be brutal. After all, the trend we’re seeing is that airlines are awarding a lot more miles for paid premium cabin tickets, and a lot fewer miles for discounted economy tickets. In this case we’re seeing five fare classes offer more miles, and two fare classes offer fewer miles. So I wouldn’t consider that to be a terrible change.

Etihad adding more GuestSeat business class awards

Etihad claims that they’ll make 20% more business class award seats available at the lowest levels on their “highest demand” routes, which translates to roughly 1,000 extra low level business class awards per month. They also claim that every single flight will have at least five economy class award seats available at the lowest level:

In line with the growing demand from members, the minimum number of GuestSeats available in Business Class on some of the highest demand routes will increase by 20%.

This means that around 1,000 additional seats in Business Class will be released each month on Etihad Airways.

From 8 July 2015, the additional seats will be released on the following sectors, each way:

Etihad-Guest-6

A minimum of five Economy Class GuestSeats will be available on every single Etihad Airways flight.

Etihad-Business-class

Changes in Etihad Guest redemption rates

The above news probably doesn’t sound so bad. Here’s the kicker, though. Not surprisingly, Etihad Guest will be adjusting award rates… and in some cases the adjustments are huge.

Here’s how they’re changing economy class redemptions:

The number of Etihad Guest Miles required to purchase a GuestSeat in Economy Class on Etihad Airways will reduce for sectors over 6,000 miles, meaning flights such as Abu Dhabi to Sydney, Melbourne, Los Angeles, Toronto and Dallas will be available for 25% fewer miles than today. For sectors under 6,000 miles, the number of Etihad Guest Miles required for a GuestSeat in Economy Class remains the same.

Here’s how they’re changing business class redemptions:

The number of Etihad Guest Miles required to purchase a GuestSeat in Business Class on Etihad Airways will not change on sectors over 6,000 miles, although they will increase on all other sectors.

And here’s how they’re changing first class redemptions:

The number of Etihad Guest Miles required to purchase a GuestSeat in First Class on Etihad Airways will increase on all sectors. These new prices will come into effect from 8 July 2015.

So to recap:

  • For economy class, Etihad will be reducing the number of miles required for flights of 6,000+ miles, while the cost of other flights will remain the same
  • For business class, Etihad will be keeping the number of miles required for flights of 6,000+ miles the same, while the cost of other flights will increase
  • For first class, Etihad will be increasing redemption rates across the board

If you want to see how redemption rates are changing, both for awards and upgrades, see the “before and after” mileage calculators:

Just to give a few examples of price changes:

  • One-way first class from Abu Dhabi to Los Angeles is going from 135,724 to 143,741 miles
  • One-way business class from Abu Dhabi to London is going from 43,976 to 65,964 miles
  • One-way business class from Abu Dhabi to Muscat is going from 6,450 to 12,900 miles

The general trend seems to be that premium cabin longhaul awards are being devalued only slightly, while flights covering shorter distances are experiencing huge devaluations.

Etihad-A380-First-Class-74

Etihad adding carrier surcharges to awards

As it stands, Etihad imposes fuel surcharges on some awards into Abu Dhabi. They’ll be abolishing these (or something like that), and will instead start levying a carrier charge on all GuestSeat awards. The carrier charge will be as follows:

This will be calculated based on the number of sectors and class of travel – US$ 50 per sector when travelling in Economy Class, US$ 100 per sector in Business Class and US$ 150 per sector in First Class.

For example:

  • A return Economy Class GuestSeat from Abu Dhabi to London: US$ 50 each way = US$ 100
  • A return Economy Class GuestSeat from Sydney to London (via Abu Dhabi): US$ 50 x 2 segments in each direction = US$ 200

In some cases that will result in awards being cheaper, while in other cases it will increase the cost of awards. That really is a junk fee, especially since we’re at the point where they’re literally just charging the same fee for every segment, simply because they can.

Number of miles required to upgrade increasing

Etihad will be increasing the number of miles required to upgrade across the board:

The number of Etihad Guest Miles required for upgrades to Business and First Class on Etihad Airways flights will also change. The route, cabin and fare class of the original booking will determine the number of miles required for the upgrade, but overall, the number of miles required for an upgrade will increase.

This is probably the most brutal change for many Etihad Guest members, as they’re adding more “categories” of upgrades, whereby lower fare classes will require even more miles, while in some cases higher fare classes will require fewer miles.

For example, here are the current upgrade costs for a one-way between Abu Dhabi and Los Angeles:

From Coral Economy to Pearl Business

64889 Etihad Guest miles if booked in Y,B,H,K,M,Q classes.

81112 Etihad Guest miles if booked in G,L,U,V,E classes.

From Pearl Business to Diamond First

64889 Etihad Guest miles

Meanwhile here are the new upgrade costs for a one-way between Abu Dhabi and Los Angeles:

From Coral Economy to Pearl Business

101793 Etihad Guest miles if booked in U,V,G classes.

76345 Etihad Guest miles if booked in L,Q,M,K classes.

50897 Etihad Guest miles if booked in B,H,Y classes.

From Pearl Business to Diamond First

76345 Etihad Guest miles

Etihad-A340

Implications for American AAdvantage members

Selfishly my big question is what this means for members of the American AAdvantage program, since I’m guessing that’s how a vast majority of us redeem for travel in Etihad premium cabins. On the surface I don’t necessarily see these changes as bad news:

  • AAdvantage members have usually had access to all GuestSeat availability, and it sounds like that availability will actually improve (though the prices are going up for Etihad Guest members)
  • I doubt the carrier surcharge will be levied for those booking through AAdvantage, since it’s not actually embedded in the fare as such
  • In theory there will be less competition for those seats, as awards will be costing Etihad Guest members more

Of course long term perhaps this leads into a bigger conversation about airlines making more space available to members of their own frequent flyer program than to members of partner frequent flyer programs, as we’re seeing Cathay Pacific consider at the moment.

Bottom line

Overall these are definitely negative program changes. But frankly as far as program changes go, we’ve seen much worse. Most devaluations we’ve seen lately have attacked consumers on both fronts, whereby they’re awarding members fewer miles for flying and requiring more miles for awards.

In this case Etihad actually isn’t cutting earnings rates much, if at all, while they are devaluing the redemption side. How bad the devaluation is really depends on how you usually redeem. Ultra longhaul flights are experiencing milder devaluations than shorter flights, where in some cases we’re seeing mileage requirements nearly double.

What do you make of the Etihad Guest program changes?

Comments

  1. Lucky – off topic, but do you have a recommendation for an agency to get a China tourist visa? I know you’ve been over that way quite a bit lately!

  2. I got this email two hours ago and I was like “do I want to read through all of this or should I just wait for my favourite blogger to just tell me what I need to know?” I went for the latter and you are on top of your game, posting amazingly fast! Thanks, Lucky!

  3. I just recently booked a JFK-AUH-SYD in the First Apartments for March of next year (which it took AA eleven days to ticket!). I don’t know how much longer we’ll be able to book $34,000 tickets for $56, but I’m excited that I was able to do it.

  4. Ugh! That’s a pain! I was planning a business class redemption LHR-AUH for next year using my Amex membership rewards points transferring to Etihad Guest.

    Time to revise my plans …

  5. It’s very rare that regional award pricing is varied for a single carrier, so I wouldn’t expect any immediate changes to awards on Etihad using AA miles…though I certainly anticipate a revamp of the AAdvantage award chart by next year since it’s now a bargain compared to other OW and STAR program charts.

    BTW Doug, how many AA miles for this award? Thought only a few routings from NAmerica via the Persian Gulf to a third region could be done on a single ticket, like SAfrica via DOH on QR.

  6. @DavidB

    almost anything can be done on a single ticket… they just charge you for two awards. 😉

  7. It’s interesting reading the range of comments (here and elsewhere) this program change has resulted in. While I can understand some disappointment, I was expecting this change to come (sadly before I had built up my GuestMiles to redeem at the old First rates – most of my travel happening in the months to come) simply because Etihad is rolling out more of the new First and Business cabins which really don’t deserve to be had at super cheap rates. It’s a top notch product, so it was always going to result in some re-pricing.

    Perhaps it’s best to reflect on the great bargains had to date, and accept that there was always going to be a sunset on those. As it is, I think Etihad gave some balance with their changes and gave some upside (compared to some recent examples, this is not as painful as some other frequent flyer scheme changes).

    AAdvantage redemptions on Etihad will be re-priced for sure.

  8. How bad do we think the AA devaluation from US-Middle East is going to be? It is already at 90k one way, which seems pretty high to me. Looks like United is at 140k for the same route, but that is the highest possible value on their award chart.

  9. @DavidB – AA prices this as two awards, although they put it on a single ticket. We are booked JFK-AUH in J (67,500 AA miles/person) and AUH-SYD in F (60,000 miles/person). 127,500/person is more than the 90,000 to fly Qantas from DFW or LAX, but #1: Space is nearly impossible to find on the Qantas flights and #2: I’ve been dying to fly the Etihad First Apartments.

  10. I should have said UA is at 90k for UA metal and 140k for partners. It seems like their partner chart hasn’t been a huge success since they are often giving discounts for partner awards at off peak times.

  11. @ Tom — I can’t imagine the award costs to the Middle East will go up by all that much, as they’re already quite high compared to other regions.

  12. Lucky, requesting a guess as to the very earliest that you think American might announce an adjustment to their award chart, and also a guess as to how long they will allow people to book using the award chart once the announcement is made. Particularly interested in booking Cathay space In y, which is already pretty difficult.

  13. EY really trying to kill their own FFP members?
    The devaluation is crazy! Esp. for F Class with their own EY FFP. Like >50+% more I see from Far East to London. Absurd!

    They are hiking their own FFP miles requirement, and increasing the no. of J seats… this will only benefit the non-EY members, like AA! This is just ridiculous. Haven’t seen any FFP Loyalty program managers do something like this to drive loyalty away!

    Let me suggest this to EY, and maybe CX.
    1. Yes, make more awards seats available, to your own program FFP members. (I guess no choice, going in direction of SQ)
    2. Make it cheaper for awards, so people bank miles with you, instead of AA!

    AA is playing all the right things, as none of their members complained about no F class awards from their inventory, because they can redeem a much better product on CX and EY, and their availability is good, and AA offers those seats with much lesser miles requirement!

  14. “4- As of 8 July 2015, tickets booked on Breaking Deals fare classes T, E and Z will not be eligible for upgrades using miles.”

    Does that mean even tickets booked before 8 July 2015 can not be upgraded with miles after this deadline ?

    On another note, can I earn miles from Z fare ticket on AA ?

  15. @Modern Day Sinbad: I thought MR is transferred to Emirates, not Etihad. Am I wrong??? Citi TYP’s transfer partner is Etihad (and Qatar).

  16. I usually book two Etihad first suite segments (CAI-AUH and AUH-LHR on A380) only with AA 36000 (including 10% miles back from Citi AA). Those days are really going away? ;(

  17. @ Ryan — A “Z” ticket on American is an award fare class, so you can’t earn miles on that. I believe all that matters is the ticketing date, as far as the first question goes.

  18. @ Andrew — I would guess at the earliest we’ll see a devaluation late in the fourth quarter, and I’d expect a couple of months advance notice.

  19. Thanks lucky !

    Just found this :

    “If your ticket was issued on fare class E or Z before 8 July 2015, the terms and conditions at the time of booking will remain, whereby you will still be able to upgrade to Business or First Class.

    However, the request must be made via the Etihad Guest Call Centre up to 48 hours prior of the flight’s scheduled departure time. You will no longer be able to upgrade at the airport or online through the ‘manage my booking’ portal.”

    From : http://www.etihadguest.com/en/programme/changes/faq/

  20. Echoing what flyingfish said, it mystifies me why airlines like EY, CX, etc. don’t give more preferential treatment for award travel on their own elites over their partners. Unless I’m missing something, it’s far cheaper to acquire AND book premium travel on EY, CX, etc. with AA points than EY Guest points. If I were an elite on EY, etc. I would not be happy. I know SQ has always avoided this situation and apparently CX is close to doing the same.

  21. Lucky: to upgrade from J to F using EY miles, does it come out of reward inventory (lowest level)? Thnx.

  22. Two things……… one, you didn’t review champagne on Etihad flights!
    business class is ok, but if your in the business class lounge in Abu Dhabi, ask for the rose. This is served to first class passengers on the Abu Dhabi to London flights (not sure which others sorry) and is soooooo nice!
    The second, I,s if you book a T class ticket, when you get to check in you wont be able to upgrade with miles. Instead of booking another flight, just upgrade the ticket to the next class, then you can use your miles. Staff don’t offer this, you have to suggest!

  23. I have a question. It appears there is no longer a Guest Business or Guest First column when you search for availability. Have they just changed what it is called now. I see Business Saver and First Suite saver. If that is availability. Is the saver bucket still 67,500 AAdvantage miles each way?

  24. Hi I travel london to delhi twice a year with a family of 4 on virgin ATLANTIC upper class. I buy either economy or premium economy and then use miles to upgrade to upper class. Of late virgin have increased miles required to upgrade over the summer and winter months that we travel, calling it peak season! Instead of paying 25000 miles round trip upgrade from premium to upper it has increased to 45000 miles. On average I collect around 250000 miles a year. Is it worth changing to a different airline such as etihad emirates qatar (don’t mind long flight or stopover) for better use of miles? I use Amex black for double miles on purchases. Can you suggest a better card to enrol on for more miles, don’t mind annual fees. Will appreciate your feedback.

  25. Also I prefer to buy economy then upgrade to upper / business class so which airline best for this where least miles will have be used? Again thanks.

  26. @M Greywal I find that cash bids work the best, some airlines like Virgin let you do both so I have done exactly that on to occasions and the cash bid is always the one that processes. Hope this helps. -GottaFly

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