How Would Rumored 2016 AAdvantage Changes Impact My Travels?

Last Thursday we first learned about rumored changes coming to the AAdvantage program in 2016. On Friday we learned more of the supposed details, even though they haven’t yet officially been announced. On Friday I also shared why I thought the potential AAdvantage changes are rather terrible, all things considered.

I’ve spent the weekend putting some thought into the rumored new program, and wanted to share a few more thoughts.

Is the new program really “terrible?”

In the last post I said the rumored changes to AAdvantage were “terrible.” Would the new program actually be “terrible?” No, perhaps that wasn’t fair. More accurately, I’d say the new program puts American in line with MileagePlus and SkyMiles.

In a way, with these potential changes we see AAdvantage go from being a point of differentiation for American to being just another program.

Previously I think most (including me) would have agreed that Executive Platinum was the best top tier status level, even if they didn’t think American was the best US carrier. With these changes, I can’t say that with a straight face. Not that I think MileagePlus Premier 1K or SkyMiles Diamond Medallion are necessarily better, but it’s certainly a coin toss between the programs.

And at that point you sort of have to wonder what the point of these programs is anymore. If they don’t really differentiate the airlines, aren’t they sort of just doling out additional benefits without actually generating much marginal business? Who knows…

“These changes don’t impact me because miles aren’t devalued”

Many people pointed out “well, I earn all my miles through credit cards and not through flying, so these changes don’t bother me.” And that’s totally valid. We’ll continue to see the airlines generate as much revenue as possible through partner activity, meaning the program will continue to be rewarding if you earn miles through non-flying means. They simply want to limit the number of miles they’re issuing through flying.

One could even argue this is good news for those who earn miles through non-flying activity. The number of miles in circulation through flying activity would decrease under the new program, meaning on average there would be fewer miles in circulation.

That being said, don’t be fooled into thinking that American won’t update their award chart. What we’ve seen leaked so far are simply changes to the elite program, and after Delta and United have devalued their award charts, you can bet American will follow.

And for that matter, you can also bet that whatever “innovations” Delta is working on when it comes to redeeming miles will be followed by American.

What surprises me most about these potential changes

American is cutting the number of systemwide upgrades that Executive Platinum members earn in half. That’s fine, and I can certainly see why they’d want to decrease the “freebies” they’re giving out.

They’re following Delta to the “T” when it comes to issuing miles based on revenue rather miles flown. That’s entirely uncreative and basically adjusts AAdvantage from a rewards program to a rebate program, but I can certainly see the logic in wanting to follow the leader.

But what sort of puzzles me is that they’d be making it easier to qualify for status at all levels. American would be eliminating elite qualifying points as a means of qualifying for status, and instead they’d be increasing elite qualifying miles earnings rates as follows:

  • Full fare first & business class: 3 EQMs per flown mile
  • Discounted first & business class: 2 EQMs per flown mile
  • Full fare economy class: 1.5 EQMs per flown mile
  • Discounted economy class: 1 EQM per flown mile

Let’s be clear, here. This will considerably swell elite ranks in no uncertain terms, as they’re making it significantly easier to qualify.

That’s great news if you wouldn’t otherwise qualify for a given status level. But at the same time if you’d already qualify for a status level, that means there will be more competition for limited perks. More Executive Platinum members means it’ll be tougher to clear upgrades, plain and simple.

So while that’s good for some and bad for others, it sort of surprises me. Under the new system, 50,000 miles in discounted business class earns you Executive Platinum status.

How would these changes impact my flying behavior?

Not much, to be honest. I’d earn fewer redeemable miles for my flights on American. But flying isn’t the primary way I earn redeemable miles, so that’s fine.

The reality would simply be that I’d still qualify for Executive Platinum status but would fly American less. Why?

  • Flying wouldn’t be as rewarding under the new program when it comes to redeemable miles
  • Executive Platinum status will be easier to earn, so without an incentive to fly more, there’s no point in over-qualifying
  • When I was issued eight systemwide upgrades I was more encouraged to actually fly American more, since I wanted to redeem them and maximize their value; if I earn just four systemwide upgrades, I’d have less of an incentive to book as many revenue flights on American

American-777

Bottom line

Ultimately the potential AAdvantage changes are negative, though not really surprising. It’s just sort of sad that we’ve gone from six US legacy carriers to three, and among the three remaining ones there’s very little differentiation or innovation between them. Instead Delta sets the tone, and the other two follow blindly.

To sum it up I guess these changes would be more “disappointing” than they’d be “terrible.”

Now we just have to wait to see how long it takes American to officially announce them, which is the part in all this that’s really disappointing. People are booking 2016 travel already, so it’s time members learned what rewards their travel will get them next year.

How would these potential AAdvantage changes impact your travel on American?

Comments

  1. And at that point you sort of have to wonder what the point of these programs is anymore. If they don’t really differentiate the airlines, aren’t they sort of just doling out additional benefits without actually generating much marginal business?

    The point would be to lock the lucrative business traveler into one airline. Say you need to get from PHL to STL. If you’re 1K, do you fly AA direct or do you fly United via ORD?

  2. Similar happened to me with UA. I am still with UA, though have cut back on the amount I fly. Is that trip really necessary? I do make 1k though but still have dropped travel some. Has been nice to free up time and make the trips that I really want.

  3. if that’s the case then it is terrible. But it’s no surprise that consolidation leads to less for the customer.

    I used to be very concerned that my flights were on UA first and AA secondarily. Now I look for cost above everything, loyalty has very little reward for me anymore

  4. Not much, to be honest. I’d earn fewer redeemable miles for my flights on American. But flying isn’t the primary way I earn redeemable miles, so that’s fine.

    So, the mileage run is truly dead now, huh, now that RDMs are going to be based on fare paid and the DOT has said mistake fares don’t have to be honored?

    The reality would simply be that I’d still qualify for Executive Platinum status but would fly American less.

    Isn’t that what you intend to do anyways, after a decade of being “up in the air”?

    And honestly, if you’re not earning most of your miles flying anyways and don’t really want to fly as much, removing incentives for you to fly just so you can add to a mileage balance doesn’t seem so bad.

  5. To the question of creating more elites . . . You would think there would a relatively finite pool of people who are able to find the time and means to fly 100K coach miles or 50K discounted first class. There is only so much corporate and business activity. Only so many who can be away from their jobs and families so often (both earning the status and then enjoying the fruits of it). It’s not as if most of the traveling public is single and self-employed and living off affiliate credit card links to their blogs, etc.

    I understand that Boarding Area, et al have lifted the veil on a lot of perks and opportunities available for those who are smart in how they collect miles. But I remain mystified that there is this bottomless pool of individuals who are available to reorient their lives to take grueling trips to achieve top-tier elite status so as to travel even more to use the perks they received for all the flying they’ve already done.

    Who are these folks endlessly bouncing between the Andaz Maui and Park Hyatt Maldives and St. Regis Bora Bora, with stops in Paris and Vienna and LA? I guess I don’t have all that much sympathy that they may be harder-pressed to come up with the upgrades that shuttle them in between the fruits of their manufactured spend.

  6. @John – I must be missing something, you and a few others have said that lucrative business travelers will be more loyal, I don’t understand that. Not trying to be argumentative, I just don’t follow that logic. My average flight cost is about $0.18/mile, I recognize that is not the most lucrative level for the airlines but it’s also not mileage run level cost. For me, I see cuts in mileage earning and major cuts in benefits coming (primarily the SWU’s) – and probably award price increases shortly after that. This is all coming at a time when award availability is extremely low, and fuel surcharges are completely out of line with actual fuel prices. To me it seems like miles are about substantially less valuable, and status is also being devalued. So, why would anyone become MORE loyal, especially lucrative travelers who are often paying for F/J anyway? Again, actual question – not trolling or trying to start a flame war.

  7. @adam you say
    “available to reorient their lives to take grueling trips to achieve top-tier elite status so as to travel even more to use the perks they received for all the flying they’ve already done.”

    Reorient their lives ? With whose? Yours, mine or some daily office 10 to 5 er.

    “Achieving top tier status”.Don’t you want to be at the best in the work you do. Please forgive if you believe being at the top is wrong.

    Grueling Travel? Go read the trip reports and then the meaning of “grueling”

  8. These airlines now see their frequent flier schemes as more “marketing” programs than rewards program. Not that they don’t want you to be loyal, they still want you to be locked in and earn miles through partner activities which means more revenue for them. But if you are primarily a low fare leisure flyer the “bang for your buck” isn’t there compared to a few years ago.

    So if you can see the forest for the trees it really just makes sense to book the lowest cost fare on any carrier. And don’t just blindly give their credit cards, online malls and car rental partnerships priority either. It’s in your best interest.

  9. So, why would anyone become MORE loyal, especially lucrative travelers who are often paying for F/J anyway?

    It’s not about becoming MORE loyal it’s about United (as an example) asking what is the least we can get away giving Chris the consultant or Dave the sales bro to get them to fly United via ORD vs. direct on American. Or, your last meeting gets over at 4pm and AA has a flight at 6 while United’s flight doesn’t leave till 7, what is the least we can do for them to get them to wait an hour?

  10. If I credit RDM to a partner, say Alaska, do I still get the EQM on American? I’m guessing not.

    What soon will be differentiating AA is that they don’t have squat for award availability on their own metal vs. UA. They will soon match UA for parter awards availability. They don’t need to raise the award chart, so much of the time it’s only AAnytime awards as it is. Want to fly non-stop in J LAX-JFK? Probably out of luck unless you fly on a Saturday (by the way, thanks for the tip on F availability on that route)>

  11. You stated: …it sort of surprises me. Under the new system, 50,000 miles in discounted business class earns you Executive Platinum status.

    In today’s world, isn’t someone who flies 50K in Discounted Biz worth much more to the airline than someone who flies 100K in Discounted Coach ?
    Keep in mind that the dynamics have changed a lot over the years.
    Back when FlyerTalk/mileage running/etc were in their heydey, airlines relied on a wide fare mix to make a profit. To extremely over simplify, the “high yied/last minute purchase/no Saturday stay required” fares paid for operating the trip. The low fare guys going coast-to-coast for $99 provided the profit. Yea, it would be great if they could fill the plane with high fares, but the reality with a dozen carriers and widebodies flying domestic is that they almost never fill a plane with high $$ fares. The airlines needed the bargain hunters also. 100K low fare flyers meant something. Mileage runs were great because it increased the supply of low fare flyers without taking away from the high fare crowd. Yield Management systems were developed to try and optimize the mix on a flight-by-flight basis.

    Many things have changed.
    The internet. High and low fare folks can now shop around. Many learned that paying an extra night hotel (extend the trip to Saturday) was much cheaper total cost due to the drop in airfare. The Saturday, round trip purchase and other requirements have been reduced/eliminated over the years. The spread between highest & lowest fare has been reduced (just a few years ago, there was no such thing as “discount” biz/first)
    Consolidation. We’re down to only 4 major carriers in the US.
    Capacity Discipline. Kind of the end effect to everything. There isn’t a glut of capacity anymore.

    Airlines still need a mixture to generate a profit. But the bottom end of the spectrum isn’t as low anymore and there are fewer seats that need to be sold at rock bottom prices (versus “spoiling” at departure time). Mileage Runners “demand” isn’t needed as often because the low end business traveler and or high end leisure travelers are taking the last seats from the “supply”. A rock bottom 100K flyer is no longer as important as in the past.

    American (at least in this phase) is letting the low fare 100K fliers keep the elite qualification rules they’ve enjoyed over the years, unlike DL and UA (tho I do suspect that next year the lower fares will only earn .5 EQM). On the other hand, AA recognizes to 50K Discount Fare buying is more beneficial to the bottom line, so is adjusting Elite qualification for those flyers. Makes perfect sense to me. And perhaps it even drives some folks to buy a higher fare bucket; instead of ignoring the lowest fare guy, so if some of them can be encouraged to move to the higher buckets. This years EQM and RDM bounused for Biz/First seem to support this theory.

  12. Ben, do you (or anyone else reading this comment) think it’ll be as easy to earn Exec Platinum status with AA if most of the travelling is on partner airlines rather than on AA itself. Last year I qualified for AA Exec Plat through a lot of travels on BA and CX as I’m based between Europe and Asia. I had just 2 flights on AA (domestic F, JFK-MCO-JFK). BUT it required significant more travelling on the mentioned partner airlines than on AA, especially keeping in mind the bonuses AA keeps offering. Do you think it’ll still be as difficult relatively to earn AA exec plat through partner airline travel rather than AA OR will it be similar or will it still be more difficult than AA but easier than before ? I hope I haven’t confused you too much. Your expert opinion would be highly valuable as I’m sure you have a LOT of readers who earn AA miles and statuses through partner flying since they’re not based in the U.S.

  13. In an oligopoly, all competitors are basically the same. They all offer the same products at similar prices. So loyalty doesn’t come into the picture. A=B=C. Consumers shunt from one to the other and market shares are essentially maintained. Bloggers are getting their panties twisted talking about loyalty and rebate programs. There’s no Continental, Northwest, US Airways, America West, Air Tran, TWA, etc. Go back further – where’s Eastern or Piedmont. There’s no need for loyalty programs because the market is all yours anyway. Airlines are not making a mistake turning into these into rebate programs.

  14. @ lucky – I think you mean “Under the new system, 60,000 [not 50,000] miles in discounted business class earns you Executive Platinum status.” Isn’t the cut-off 120k EQMs now, not 100k?

  15. @ Lucky – Ahh, I was looking at the segment requirements. Wow. Do we know if that earning rate will apply to flights on other OneWorld carriers? If so, two round-trip biz flights in Malaysia Airlines’ discount business class (which can be extremely cheap) from Sydney to London would almost yield Emerald status. That is extremely generous / silly.

  16. Hi Lucky
    It will have a huge impact on me. I live in Brazil and the majority of my miles are made in 4/5 flights/year from Brazil to West Coast on Business Class. I never pay more than USD2,000, which means that I will get 15,000-22,000 redeemable miles per flight (if that!) compared to 32,000-35,000 (depending on the connection and excluding bonus miles from this year promo, additional 9,000-14,000 in promo Business fares) currently. So, you can see it will affect me heavily.
    Let us say I keep flying AA and decide to post my miles into another program (LANPASS for example, that accept a Status Match). LANPASS will give me around 20,000-22,000 miles (depending on the connection). But if I fly LAN or TAM (connecting AA in the East Coast) it will be around 26,000 miles.
    Other option is to switch to Star Alliance and posting my miles into TAP Victoria (where I hold Gold status) and I will have 26,000-29,000 miles per flight (no mater if I fly, Canadian, United, Copa or Avianca), in this case forgetting about SWU.
    But I hope I still have entire 2016 to figure out how to proceed in 2017.

  17. For me, it comes down to how AA handles upgrades. If the domestic upgrade program continues as is, with priority based on time of ticketing, and there is no super level for priority like UA GS, then I will continue with AA.

    It would take UA eliminating TODs for me to go back to UA. But I might fly UA again (after I get AA EXP) since the mileage earning is the same for EXP as UA 1K.

  18. What I find most disappointing is that is it almost impossible to snag award business seats to Europe anymore on American, instead having to use British Air with all of their insane extra fees.
    We recently used 100,000 points plus spending close to $1000 in BA fees,to”snag” a flight on British Air Open Skies, having to change planes in Newark from Miami to Paris.
    It was the flight from hell. Worse flight I have ever had. Whomever designed the layout of the beds should be drummed out of the industry. When the beds were in the inclined positions, the passengers by the window could not get out of the bed, without literally climbing on top of the passenger next to them,the angle of the legs in the reclining position was horrendous as there were no real leg rests,no where to even put anything except the floor, not even a place to put a cup down, except,for a precarious tiny folding spot not much bigger than a coaster.
    The flight attendants brought out bedding to make our own beds, most of which landed on the floor in a crumpled heap.
    And no one bothered to tell us preflight that the food service in the lounge was our dinner, as no meals were served on an 8 hour overseas
    Worst flight ever!!!

  19. @Robin. Sounds like u flew on Americans worst product. It’s called an Angled Flat seat. It’s horrible. Not only that but I can actually be in the middle of a 3-seat row as well.

  20. Good points made by ar.
    I used to feel like I knew how to get the most out of an airline; now I’m happy if I just find a reasonably priced ticket. Points are points, sure, but finding the best way to cash in on them had gotten way less rewarding.

  21. I consider the reduction to 4 SWU’s from 8 to be an improvement. Since SWU’s were given to US Air flyers there are too many SWU’s competing for too few seats. I was able to use only 2 of my 8 SWU’s this year and those were confirmed on day of flight, I would much prefer having 4 SWU’s that confirmed in advance than 8 that could not be used, The other improvement is the elimination of the point system. Yes it will make it easier to earn EP, and that will increase competition for upgrades, but it made no sense to me to buy a premium ticket and only get the same EQM as a deeply discounted ticket. Prior to the disclosure of these impending changes, I concluded that I would not pursue EP for next year. I will buy discounted premium tickets or upgrade with miles, thereby jumping in front of the EP’s. I am now free to buy the best priced premium ticket, which recently has been Sky Team, but changes from time to time,

  22. Hello! I am learning here. In this post you say that most of your miles don’t come from flying. Do they come from MS? What is the primary way you earn redeemable miles?

    Thanks a lot!

  23. Agree with everyone who thinks this stinks. AA moved from the best 100K program to the least rewarding (or at least a tie with Delta,. and being a tie with affectionately known “Skypeso” program is not an aspirational program, IMHO.)

    If they would give at least 6 SWU’s, they would tie United, but sadly not to be. One reader in another blog mentioned that his recent SFO-JFK flight gave around 10,000 miles under the scheme in effect until 7/1/16, but around 3,500 miles thereafter, and he is EXP with AA. Yes, he did get a very good deal on his Y ticket, but most likely was unable to upgrade. Not sure what to do. think UA ASAP is not a bad solution.

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