American Rewarding High-Spending Customers Even More
American Airlines is further upping its game in an effort to retain and attract top elite members. Earlier this week they announced a program to award bonus elite-qualifying points (EQP) to customers who buy first and business class tickets. For customers buying the most expensive tickets, the earning rate is double the normal amount.
Discounted First and Business class tickets will earn an extra half EQP per mile flown.
Full-fare First and Business class tickets will earn 1.5 extra EQPs per mile flown.
The program runs through the end of 2015.
For those not familiar with EQPs, they’ve been around for a while as a way for AAdvantage to reward customers who spend more money, giving them a quicker path to status.
While most customers won’t be taking this path to elite status, it means that someone buying full-fare tickets would only need to fly 33,333 miles to earn top-tier Executive Platinum status. And, it’s not just for flights on American Airlines. The T&C say, in part, that it also covers flights marketed by American Airlines:
and operated by American Airlines or flights marketed by American Airlines and operated by US Airways, British Airways, Iberia, Finnair, Qantas or Japan Airlines
That certainly makes it easier to take advantage of this promo.
Couple this with the promotion announced at the end of 2014 that elite members would earn more miles for buying premium tickets in 2015, and high-spenders are making out well in many situations with the New American.
I’m pleased that this is the second overture American Airlines has made towards rewarding high-revenue customers without crapping all over their lower elites like Delta and United. That may sound a bit harsh, and some folks will say revenue-based programs are the way things have to be going forward.
But, I still think there’s a path for American Airlines that doesn’t involve going to a full revenue-based program. And, it’s worth noting that neither United or Delta are really rewarding revenue only, or they wouldn’t have a mileage requirement along with the revenue requirement.
The bottom line is generating profit, and doing so in a fashion that makes shareholders happy. The merger seems to have come at a point where American can afford to watch how Delta and United fares with their changes.
I’m guessing that even if these changes are successful in allowing American Airlines to retain profitable customers, there will need to be an adjustment on the redemption side of things. There’s already lots more miles chasing awards from all of the credit cards (remember those 100,000 mile sign-up bonuses?). Now, they’re awarding more miles to high-revenue customers. At some point (if not already), there will be too many miles chasing too few seats.
For now, it’s another big plus for folks who spend a lot on airline tickets. And, if that helps keep us normal-ish spenders okay for a while longer, I’m all in favor of it.
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So just a trip to Asia and a couple domestic trips will get you what once took many more BIS miles. Delta and UA still require the BIS miles so this a plot to attract those who may only take 3 or 4 flights a year?
Nick, I’m one of a small group of folks who spend more than 12 cents a mile on UA but didn’t get 1K because of the 100K mileage requirement. Setting aside my personal bias, I’m not sure why an airline wouldn’t want to give status to someone who flies infrequently and spends a lot of money. You’re not over-taxing the resources if they fly infrequently.
I don’t really have an issue with this policy either, however the two reasons I can think of:
1. They are making it too easy for them, once they have easily attained the status there is no reason to stay on the treadmill. Many will just add another airline.
2. Very high rev flyers don’t make decisions based on loyalty anyway, so you just gave them a rebate they weren’t even looking for and reduced your profit margins.
At least AA have not reduced earning for lower rev passengers away like UA and Delta have. Hopefully that works out well for them.
Nick, I think that we are part of the obsessed few that think about obtaining multiple statuses. I think your second point about high spenders being less likely to make decisions based on loyalty is more topical. But, giving someone who buys premium tickets status doesn’t cost a whole lot. They’re already giving them lounge access on intl tickets, so it’s some extra miles. They likely go unused if the person isn’t price-sensitive. If they’re spending their employers money, then the extra miles and benefits may be the glue that keeps them loyal.