Skift Take

How the ranks of AAdvantage members expand or contract after these changes will now largely depend on whether American can compete on product instead of loyalty.

American Airlines yesterday revealed the final details of its upcoming loyalty program, officially confirming that it would move to a revenue-based model for earning award miles.

Like Delta Air Lines and United Airlines before it, as of August 1, 2016, American will now return award miles to members of is AAdvantage loyalty program based on how much a ticket costs rather than how far the passenger flies.

Like Delta and United, American will also use a tiered earning system, where elite members earn more miles per dollar spent than general members. Earnings per tier will be:

  • General AAdvantage members: 5 miles/dollar
  • Gold (earned after flying 25,000 miles): 7 miles/dollar
  • Platinum (earned after flying 50,000 miles): 8 miles/dollar
  • Executive Platinum (earned after flying 100,000 miles): 11 miles/dollar

The earning tiers are nearly identical to those used by Delta and United.

Earning mileage towards elite status, or Elite Qualifying Miles (EQM) will still be earned by distance flown together with a minimum spend requirement announced late last year.

In addition to the new award earning structure, AAdvantage is also introducing a new elite tier for the 2017 year. Platinum Pro can now be earned after flying 75,000 miles (or 90 segments) plus $9,000 in matching spend. The new elite tier closely matches with competing carriers (Platinum on Delta and Premier Platinum on United) and is likely a carryover from the merged US Airways program that formerly had a 75,000 mile tier. It also helps American better compete with the mid-heavy business travel market that United and Delta are currently better-addressing.

With Platinum Pro, passengers will earn:

  • Complimentary auto-requested upgrades on all eligible flights within North America and between the U.S. and Central America
  • 9 award miles/U.S. dollar (80% bonus)
  • Two free checked bags
  • oneworld® Sapphire status

In addition to the award mile and elite tier changes, American also announced plans to change the upgrade priority for elite passengers. At some point in 2017, the airline intends to start offering complimentary upgrades by tier as a function of how much each passenger spends on a rolling annual basis. This means that a budget-focused Executive Platinum member flying 100,000 miles each year on inexpensive airfare will consistently be upgraded behind a high-spend member buying business or first class fares. Budget focused members buying the occasional high-spend fare will also be deprioritized thanks to a rolling aggregate total of annual spend.

While members of the AAdvantage program expected most of today’s changes based on American’s initial forecasts for updates in the second half of 2016, the new upgrade policy will take many by surprise. AAdvantage has consistently ranked well among business travelers at the annual Freddie Awards thanks to its elite program, but with recent updates it may join the pack among less-rewarding carriers.

Still, with its peers moving towards revenue-based programs and reaping the benefits, American no doubt felt the pressure to adopt the same model — after all, disaffected elite members have nowhere else to go.


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Tags: aadvantage, american airlines

Photo credit: American Air rolled out much-expected changes to its AAdvantage loyalty program. American Airlines

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