An Easy Way To Bypass American’s EQD Requirement

As most of you probably know by now, American announced some major changes to the AAdvantage program on Monday, which more or less make the loyalty programs of the “big three” US carriers the same. It’s sad to see the lack of innovation, though at some point it’s liberating — people can now choose the airline which works best for them based on the onboard product and route network, rather than frequent flyer perks.

AAdvantage-Program

I’m considering switching to Delta SkyMiles, though I did note there are still some advantages to AAdvantage (pun intended). A lot of people said “well, it’s because you’re a cheapo and don’t spend $12,000 per year on American.” That’s not the case, as I certainly do (unfortunately).

It’s not the revenue requirement that bothers me, but rather that if the program isn’t going to be differentiated, then I’d rather not fly an airline which offers a sub-par onboard product, especially as I find myself on an increasing number of ex-US Airways A320s and A321s.

As I continue to analyze the AAdvantage changes, something interesting occurred to me in regards to the revenue requirement for status.

What we don’t know about elite qualifying dollars

We already know the annual spend thresholds required for status, which only include the cost of airfare before taxes and fees:

  • AAdvantage Gold: $3,000
  • AAdvantage Platinum: $6,000
  • AAdvantage Platinum Pro: $9,000
  • AAdvantage Executive Platinum: $12,000

American-EQD-Requirement

We don’t yet know if any sort of a waiver will be offered through a credit card. I highly suspect it will be offered, given that both Delta and United offer similar waivers. What’s less certain is whether or not top tier status can be earned with a credit card waiver:

  • Delta lets you waive the revenue requirement for all status levels by spending $25,000 on their co-branded credit card
  • United lets you waive the revenue requirement for all status levels except top tier by spending $25,000 on their co-branded credit card

Delta-Revenue-Requirement

So that’s still a mystery for American, though I suspect we’ll find out what their policy will be in the coming months, with plenty of time before it’s implemented.

Furthermore, I’d note that American won’t waive the revenue requirement for members registered outside the US, as other programs have done.

A trick for minimizing the EQD requirement on American

There may be a way to spend significantly less on status while still satisfying the elite qualifying dollar requirement. Specifically, check this out (bolding mine):

EQDs will be awarded based on:

  • Ticket price (base fare plus carrier-imposed fees, excluding any government-imposed taxes and fees) on American-marketed flights
  • Flights marketed by oneworld carriers and Alaska Airlines will earn EQDs based on a percentage of the flight distance and the fare class purchased

With the addition of EQDs, we’ll remove the rule that 4 segments must be traveled on American or American Eagle during the qualifying year to receive elite status.

So for flights marketed by other airlines, you’ll earn elite qualifying dollars based on a percent of the distance flown. This is similar to Delta’s policy, but different than United’s policy.

Let’s look at what this means in practice at Delta. If you’re crediting Air France flights to Delta SkyMiles, you earn elite qualifying dollars at the following rates:

Medallion-Qualifying-Dollars

Just so we have another data point, flights on China Eastern accrue Delta EQDs at the following rates:

Medallion-Qualifying-Dollars-1

What this means for American AAdvantage

It’s interesting to note that in the case of Delta SkyMiles, partner flights in discounted business class seem to earn EQDs at the rate of 30-35% of the distance flown. What this means is that if you take a journey of 10,000 miles, you’d earn $3,000-3,500 worth of elite qualifying dollars.

Since American copies almost everything Delta does, I’d assume they’ll have similar EQD earning rates for travel on partners.

In April I wrote a post entitled “Why I’m More Tempted Than Ever By Qatar Airways’ Business Class Fares.”

In that post I explained that flights marketed and operated by partner airlines will continue to accrue mileage based on distance flown rather than the cost of a ticket. But this also has interesting implications for elite qualifying dollars.

Take the following fare, from Casablanca to New York:

QR-Fare

The cost of the ticket is ~$1,833, and it covers a distance of 20,548 miles. Under current earnings rates, an Executive Platinum member would earn:

  • 30,822 elite qualifying miles
  • 46,233 redeemable miles

Starting next year, elite qualifying dollars will also come into the picture. Assuming you earn 30-35% EQDs based on distance flown on discounted business class fares, you’d also earn ~$6,165 to ~$7,191 worth of elite qualifying dollars. That satisfies more than half of the Executive Platinum revenue requirement.

Qatar-Airways-A350-Business-Class-30
Qatar Airways business class

Similarly, I recently booked an ~$1,150 roundtrip business class ticket on British Airways between San Francisco and Rome, connecting in London. That covers a flown distance of ~12,500 miles, so if you earn 30-35% elite qualifying dollars per flown mile, that would get you $3,750-4,375 towards the spend requirement for status with American.

British-Airways-A380-Business-Class
British Airways business class

In both instances, that represents EQDs at more than triple the normal rate.

Bottom line

There are still a lot of unknowns, like what kind of an EQD waiver will be offered, and whether it will cover top tier status (as is the case with Delta), or just lower tiers (as is the case with United).

We also know that American will offer EQDs for travel on partner airlines based on a percentage of distance flown, though we don’t know the exact amounts yet. Assuming it’s similar to Delta, it sure seems like a good strategy could be to find cheap premium fares on partner airlines, for the purposes of increasing your EQD total.

Comments

  1. Discounted business fares as a “EQD run” shows how far we’ve come. Miles are becoming less and less valuable when business class is becoming so cheap. MQD makes the programs very similar to BA/QF/CX fliers wipe themselves with their “TP runs”.

  2. I think you misunderstand it. My understanding on United has been that that percentage is based on the ticket price (since MP is basically a dupe of SM, I’m am guessing SM is similar).
    If you book a $2000 ticket on completely on delta equipment through a partner or whatever, you get 60% of that $2000 spend. If one way is on Delta equipment and the other way isn’t, you’ll get 60% of halve that $2000. On a one way booked through a partner where 3000 miles out of a 10000 mile journey is on delta, you will get 60% of the 30% of the ticket price.

  3. And this is why I read your blogs. Appreciate the info. Will wait to see what the heck AA is doing before making any decision on staying/switching.

    My main gripe with AA is not releasing all of the details at the same time. There are some huge announcements still to come with Basic & Premium Economy coming and how that relates to status will impact my decision on being loyal or not.

  4. @Kris I think this pertains to buying tickets from elsewhere (not via AA.com or any AA marketed method) and crediting to AAdvantage, where they wouldnt know your purchase price and details (at least I dont think AAdvantage would be able to access that info)

    So like in Lucky’s example, buying flights on QR from QR directly or a third party (thats not AA) and crediting to AAdvantage

  5. Ben-

    I emphatically agree with Josh- Please delete this post until after the policy is put in place, otherwise I suspect it might be adjusted and not for the better

  6. @ JoshUK — Fair point, but it’s something I considered before posting, as I genuinely don’t think American cares. They’re not going to center the earnings structure around the super discounted fares which a few people may book, given that there are already enough barriers in place for those people.

  7. This is definitely true, though you do have to be careful — for example if you buy a ticket through KLM originating in the US, you earn MQDs based on spend. If AA sets up something similar with close partner BA, that would limit this type of opportunity. But basically Delta’s program is wildly complicated and there are many permutations of the rules, but certain circumstances, it can be gamed a bit.

    I also suspect that Delta may be getting some kickback from its partners, and different partners have agreed to kick in different amounts (or Delta has been more generous with more important partners), hence the widely varying earning rates by partner. If AA follows that pattern things may look very different. Though it’s entirely possible they won’t be able to negotiate all of that by August 1. Delta did not allow MQD earning on partner flights for the first year or so of requiring MQDs, and that was after MQDs had been announced a year or so in advance of launching, so AA is on a much tighter timeline to make all of this happen.

  8. “American won’t waive the revenue requirement for members registered outside the US, as other programs have done.” — Is that confirmed? But why?

  9. I am also among those that kind of wish you did not post this, but I know you are just doing your job. I read and parsed that language several times earlier this week as well and also the elimination of the requirement for four segments on AA – to me the combination of those changes seem like a “sweet spot” for the well informed.

    My biggest concern with the changes has been the plan to rank upgrade requests by 12-month MQD after status. I will typically make it to $12,000 for MQD without the partner flights, but just barely. I am sure that I will get blown out of the water on MQD though by New York consultants flying up and down the east coast every week using other peoples money, those people are popping the champagne because AA just instituted an incentive for them to waste other peoples money for entirely personal gain. Depending on the actual basis for the partner MQD calculation, it may keep me in the running to at least get a few upgrades as an EXP.

  10. This has become so complex and difficult, that I feel vindicated in my decision to become a “free agent” 5 years ago and I’ll fly who I want at the moment and earn my miles in a different ways.

    Qatar, however, is looking mighty good right now as my new “check first” carrier.

  11. Hopefully the good people at (dis)AAdvantage don’t see this and ruin your loophole. Also, if I bought tickets for multiple people i.e. 5k$ at 1,250$ per ticket, would I earn 5K EDQs or 1250 EQDs?

  12. You are worrying too much about that. No one at AAdvantage will pull the trigger one month out just because of this post. If anything, they will lower the percentages to be awarded. Because what’s the alternative–as mentioned above, that AA gives you EQDs based on actual ticket price as with AA-ticketed (ie. 001) flights? That would require AA asking Oneworld airlines to provide what was actually paid–that may fly with the joint ventures BA/IB/AY, but a big no to, say, Qatar. Mind you the IT requirements for gathering this info. I was thinking of dropping ExP altogether, but based on this post (thanks Lucky) I will now wait until the charts are released.

  13. @ Lucky
    I guess using SWU’s post 8/1 is going to get you mileage based on $ correct ?

  14. @ Bobby — You mean in terms of earning miles based on those flights? Yes, you will earn based on spend.

  15. On Delta, MQDs apply only to members living in the US, people with a foreign address don’t have to worry about it. If AA adds the same exception, you might want to list the address of one of your relatives in Germany to get ride of this problem altogether.

    I don’t know how easy this process is on DL but at least on AF you can change your address all you want without any question asked.

  16. @Bgriff: The reason Delta awards MQD based on spend on KLM-flights ex-USA is because Delta actually handles all US ticketing for KLM (even on an all KLM-marketed and operated itinerary!)

    It’s a pretty unique arrangement that was carried over from the Northwest days, and I’m not familiar with any other comparable arrangements (though perhaps Ben is). I know for a fact that American and BA don’t have such an agreement in place, and would never expect one to be pushed through in a short timeframe, so certainly in the short-to-medium term I wouldn’t be overly concerned by that. Perhaps in the long-term it could happen, but it’s more likely to develop with Delta and Virgin Atlantic long before it does with American and BA.

  17. Lucky,

    While I am appreciative that someone like you tries to make sense of this.

    I really DON’T want to get out the abacus, slide rule and orbital tables to know if I’m elite with an airline or not.

    This is JUST the silly thing that drives me nuts about how Frequent Flyer programs were once so simple and now are just stupidly complex. So complex that we need to collectively “game” their byzantine architectures to find value.

    Looking at this as a Systems Optimizer type person. I have to say that it looks like the AAdvantage folks are just in the business of making complexity not providing value to customers. I mean really percentages based on FARE CLASSES… seriously? Who is going to have a full time job implementing and updating that table of doom? Who is going to be in charge of the inevitable angry customers wanting adjustments due to strange crediting?

    And after all of that new new newness of a table system. Will this yield any increases in customer sat or efficiency? No? why is AA doing this? What was wrong with miles? Do the AAdvantage people realize that everyone is gaming the fare system too? Do they realize that the last minute full fare fliers are mostly a thing of the past? Do they realize that companies like mine DO NOT allow full fares to be booked but like 1 per 1000 flights company wide?
    It’s funny but I wonder how all the folks from USair are integrating with legacy AA and if this monstrosity is not the USair folks designing themselves a sure job dealing with the headaches.

    This is just making me very mad. It’s SWA for domestic and foreign carriers for me until AA gets their head out.

  18. “I really DON’T want to get out the abacus, slide rule and orbital tables to know if I’m elite with an airline or not.”

    +1000. Just ridiculous. One has to keep track of EQD, EQM, RDM, and then it’s all different for different airlines and fare classes.

    But maybe that is the point. Big-spending business travelers don’t sit there with a calculator and worry about the detailed earnings rates for various partner airlines and fare classes. They just buy a (expensive) ticket, credit the miles to AA, and go, knowing that it will contribute handsomely to their various balances but not really caring by how much. That is precisely the behavior that AA wants to reward.

    They have effectively fired the rest of us, just as DL and UA already have.

  19. Good analysis Ben!

    For me, the strategy is to let the dust settle before I take a good hard look at Aadvantage and work out all the loopholes. In the meantime, I’ve swapped to BAEC to lock in lifetime Gold (Emerald) as a retirement strategy. The change with AA could not have happened at a better time! Diversify your portfolio people!

  20. Lol, for those of you who are paranoid about AAdvantage reading this and scrambling to change the partner EQD, I think you can rest assured that they have already thought of the ramifications of cheap I fares getting large amounts of EQD from some QR flash sale or low fare. Funny, though. Us FFs sometimes act like the people running these calculations are NOT a bunch of Ivy-League MBA’s (most of them are) who are smarter than most of us.

    Anyway, I think 30-35% on QR is a very generous assumption. Maybe on BA/IB/JL. AA has always snubbed QR in AAdvantage, so don’t expect a very generous EQD % on QR on July 15.

    My $0.02.

  21. Thank you for all of your good work, which is greatly appreciated. However, I do agree with those who feel that we should wait for a policy to take effect before publicly discussing its implications.

    Right now, you are basically doing the job of AA staffers in presenting the management with consequences of various options and helping them choose the course which just might disadvantage the customers.

    In any event, how do we benefit from analyzing a policy that does not even exist yet?

  22. @ Lucky, yes. So the days of using Confirmed SWU’s with a cheap economy fare longhaul to make plat or EP are gone.
    Pity, I have 6 left.

  23. @Econometrics says: Us FFs sometimes act like the people running these calculations are NOT a bunch of Ivy-League MBA’s (most of them are) who are smarter than most of us.

    The Ivy League MBA’s that are smarter than us running these calculations have left plenty of loopholes to be exploited in the past, I am confident that they will have some loopholes in this program once they figure out what the whole thing looks like. The more complex the Ivy League MBA’s make the program and rewards, the more likely it is that a small subset of the passengers will be able to take advantage of some aspect of it because of their specific situation or behavior.

  24. “I really DON’T want to get out the abacus, slide rule and orbital tables to know if I’m elite with an airline or not.”

    +1000 x 1.5 EQM! The airline agents even have trouble now understanding it all, so it’ll be glorious once these new changes take place.

  25. Thanks as always, Ben. Incredibly, an AA rep on the phone couldn’t answer this simple question and they ignored it on their blog so I’m asking you: Do the (1) new or (2) old rules apply to achieving elite by end of calendar year 2016 for status through calendar year 2017?

  26. So much wrong here. I enjoy your blog, but devoting a post to a possible loophole before any of the details are known is worse than silly. Why not sketch out the post but keep it until the details are known, then plug in the numbers and see how it works?

    Also, as a clarification, AA has said that for tickets that include partner-coded flights, EQDs (as with EQMs) for partner-coded flights will be awarded based on mileage flown times a pecentage based on fare class. It doesn’t matter where the ticket was purchased or which airline issued the ticket. What matters is the airline code of each flight. So, for a ticket such as:
    JFK-LHR AA code
    LHR-CDG BA code
    CDG-LHR AA code
    LHR-YVR BA code
    YVR-DFW AA code
    DFW-JFK AA code
    The base fare plus carrier-imposed fees is added up and pro-rated among the flights. For AA coded flights, that pro-rated amount is used to determine EQD and EQM for that flight. For partner coded flights, the pro-rated amount is ignored and the flight mileage times a percentage is used.

  27. FYI: DL and UA have a full waiver on EQDs for non-US accounts because there are no affinity credit cards available to members outside the US. We already lose out on discounted elite status because we can’t earn/credit those EQM bonuses from those credit cards so have to fly further to earn our status.

    Are we certain that we’ll still earn full mileage RDMs (plus COS) on other OW flights?

  28. Theres actually an easier way to get MQDs and also by flying on AA, not on partner airlines. I’ve done it on Delta for the past couple years with much success and have been Diamond since the beginning. But I wont post it publicly. I assume AA will be the same. If you read this post carefully and just think how this can apply to flights on AA rather yhan on partner airlines, its not too difficult to figure out.

  29. @Rich You don’t mean flying AA metal marketed by AS or OW carriers? Because that much is in the published rules. If something else, I would enjoy the puzzle. If you don’t want to confirm or deny publicly, a pm at FT would be great.

  30. @ATKTCHI. No, I mean flying AA on a true AA flight. Definitely works on Delta as ive done it numerous times, so I’m pretty sure it will work on AA as well, but wont know for sure until after August 1. You can message me on FT at rcrowe5999.

  31. @Tam ” “American won’t waive the revenue requirement for members registered outside the US, as other programs have done.” — Is that confirmed? But why?”

    Great question. Am wondering the same.

  32. If the recent changes to Business Extra are any indication, AA, BA, and IB share the fare information with each other, and they’ll use that in their calculations for those flights. Probably the most ridiculous part of Business Extra, besides the very low earning rates, is that that the calculation excludes fees like carrier surcharges on BA.

    Hopefully though AA is as inconsistent with that as they are with everything else lately.

  33. You estimated high with all of your guesses. AA devalued further than you thought they would. I think you should update the post, as it’s pretty misleading. Discount I class is 14%-25% EQDs per mile flown. Your 30%+ estimates are really pretty far off.

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