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.
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.
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:
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:
A minimum of five Economy Class GuestSeats will be available on every single Etihad Airways flight.
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:
- Here’s the mileage calculator for travel booked before July 8, 2015
- Here’s the mileage calculator for travel booked as of July 8, 2015
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 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.
- 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
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.
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?