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American Confirms AAdvantage Devaluation

Yesterday, American finally confirmed what has been widely known for two weeks: AAdvantage will follow in the footsteps of Delta’s SkyMiles and United’s MileagePlus, converting from a mileage-based to a spend-based program.

Mileage Earning

The key change is to mileage earning, which will be based on spend rather than distance flown, beginning sometime in the second half of 2016. Earning rates on American flights will be as follows:

  • Non-elites will earn 5 miles per $1 spent
  • Gold elites will earn 7 miles per $1 spent
  • Platinum elites will earn 8 miles per $1 spent
  • Executive Platinum elites will earn 11 miles per $1 spent

So, for example, for a discounted coach roundtrip flight between Los Angeles and Dallas, priced at $327, AAdvantage members would earn the following, including elite bonuses, pre- and post-change:

  • Non-elites earn 2,470 flight miles, or 1,635 spend miles (34% less)
  • Gold elites earn 3,088 flight miles, or 2,289 spend miles (26% less)
  • Platinum elites earn 4,940 flight miles, or 2,616 spend miles (47% less)
  • Executive Platinum elites earn 4,940 flight miles, or 3,597 spend miles (27% less)

In that scenario, everyone earns less. Switching to a Choice Essential fare—a refundable fare that might be booked by business travelers—ups the roundtrip price to $1,458, with the following effect on mileage earning:

  • Non-elites earn 2,470 flight miles, or 7,290 spend miles (195% more)
  • Gold elites earn 3,088 flight miles, or 10,206 spend miles (231% more)
  • Platinum elites earn 4,940 flight miles, or 11,664 spend miles (136% more)
  • Executive Platinum elites earn 4,940 flight miles, or 16,038 spend miles (225% more)

As the above illustrates, the new AAdvantage is designed to disproportionately reward the very few travelers purchasing the highest-priced tickets, while the great majority of flyers, who travel on discounted coach fares, will earn considerably less.

Mileage earning on AAdvantage partner airline flights will be based on a percentage of the flown distance and the type of ticket purchased. Full details will be announced next year.

Award Prices

New award charts will take effect in March 2016, with considerably more increases than decreases in award prices.

A few highlights:

  • The 25,000-mile coach award for roundtrip travel within the contiguous U.S. will remain in place.
  • Prices for coach award travel to Canada and Alaska will increase to 30,000 miles roundtrip.
  • A new award for short-haul domestic travel will be introduced at 15,000 miles roundtrip.
  • While domestic business-class award prices will remain unchanged, first class will increase from 65,000 to 100,000 miles roundtrip.
  • Premium-class award prices to international destinations will increase, in some cases substantially.

Elite Status

AAdvantage will retain its three-tier elite system after the change, with no change to the number of elite-qualifying miles or segments required to qualify. The current points-qualifying option will be eliminated.

Elite miles will be awarded according to flown miles, with a multiplier according to the type of fare purchased:

  • Discount economy multiplier: 1 (versus 1 for Delta, 1 for United)
  • Full-fare economy multiplier: 1.5 (versus 1.5 for Delta, 1.5 for United)
  • Discount first/business multiplier: 2 (versus 1.5 for Delta, 1.5 for United)
  • Full-fare first/business multiplier: 3 (versus 2 for Delta, 1.5 for United)

As for upgrades, the biggest change will be limited to Executive Platinum members, who will receive four annual systemwide upgrades instead of eight currently. Up to four additional upgrades may be earned, two after earning 150,000 elite miles, and two more after hitting 200,000 elite miles.

Winners & Losers

According to the airline’s news release, “American Airlines has spent the last two years being singularly focused on integration. Now we’re at a point where we can begin to look ahead and lay the foundation for the future of the AAdvantage program to ensure we’re rewarding our most loyal customers with the benefits they value the most.”

Members of Delta and United’s programs will recall similar pronouncements from those airlines in the run-up to converting their programs. In the end, what members of those programs discovered was that spend-based schemes are great for the few, and a significant downgrade for the many.

Sadly, American customers are now next in line to discover the same.

Reader Reality Check

How will these changes affect your loyalty to American?

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