In June, American announced some major updates to the AAdvantage program. First of all, they announced that as of August 1, 2016, redeemable miles would be awarded based on dollars spent rather than distance flown (we already knew this was coming, though prior to that didn’t know the date it would happen). Furthermore, American announced that there would be a revenue requirement to earn status starting in 2017.
This requirement is as follows:
|Gold||Platinum||Platinum Pro||Executive Platinum|
|25K EQMs or 30 EQSs||50K EQMs or 60 EQSs||75K EQMs or 90 EQSs||100K EQMs or 120 EQSs|
|$3k EQDs||$6k EQDs||$9k EQDs||$12k EQDs|
As you can see, you essentially need to spend an average of 12 cents per mile to meet the revenue requirement for each elite level (which is steep).
Why we thought American would offer a credit card waiver
The “big three” US carriers seem to follow one another pretty closely. Both Delta and United also already award redeemable miles based on revenue rather than distance flown, and they both offer an opportunity to get the minimum spend waived in conjunction with credit card spend:
- With Delta, all elite qualifying dollar requirements can be waived by spending $25,000 on a Delta Amex Card
- With United, elite qualifying dollar requirements can be waived for Silver, Gold, and Platinum members by spending $25,000 on a United Chase Card
So it only seemed logical that American would offer the same.
Well, Delta has a really close relationship with American Express, and United has a really close relationship with Chase. For a while we thought American also had a close relationship with Citi, though it seems that wasn’t totally the case.
A couple of months ago, American announced that going forward they would no longer have an exclusive credit card agreement. Instead they’d have co-branded AAdvantage cards issuers by both Citi and Barclaycard. On one hand I think this is good for consumers, since it means there will be more competition.
On the other hand, it also means that clearly American and Citi couldn’t come to terms on an “exclusive” agreement.
I don’t know how the credit card waiver works behind the scenes at Delta and United. Are the airlines getting paid by the credit card companies if someone gets an elite waiver through a credit card? Or do they somehow get improved terms on their overall agreement? I suspect it’s more along the lines of the latter than the former.
Regardless, it’s clear that the relationship between American and Citi isn’t as close as the relationship between American’s competitors and their issuers.
Here’s where American stands
We’re less than three months from 2017, and we haven’t yet received any word on a potential credit card waiver. I decided to follow up with American about this, to ask if they’re still considering this, or if there will definitely be no opportunity for a waiver in 2017.
Their answer was that it’s something American is still reviewing, and that they’ll share updates as soon as they have them.
What do I make of this?
- On one hand it’s less than three months until the new year, so if something hasn’t been announced already, it seems unlikely that it will be at all
- On the other hand, now that Barclaycard and Citi are competing, it seems like there’s only upside to one of the issuers in striking a deal with American; imagine how much of an advantage one of those issuers would have if elite members had an incentive to spend at least $25,000 on their co-branded credit card
Of course in these deals logic often doesn’t prevail. At the same time, American should want a credit card waiver to happen, as it’s in their best interest. They’d have more engaged members who have their co-branded card at the top of their wallet, and there’s value in that, even if they’re not directly meeting the spend requirement for status through flying.
Given the degree to which the big US carriers follow one another, it’s interesting to see that American ended up not going with an exclusive credit card agreement. So it could go either way, though it wouldn’t surprise me if American doesn’t offer a waiver.
Do keep in mind, however, that there are creative ways to minimize American’s EQD requirement by flying partner carriers, especially airlines like Qatar Airways on discounted business class tickets.
Will American’s decision on whether or not they introduce an EQD credit card waiver impact whether or not you’re loyal to them?