American Airlines Lifts Their Dress And Shows Us New Changes

American Airlines made some things official today and announced a few others.  We had a pretty good idea how things would look given the information that leaked 10 days ago.  In case you missed it, here’s the quick recap:

  • American will award more EQMs to travelers who buy more expensive tickets. This is likely a plus for a decent number of elite travelers, myself included, who buy a mix of fares. The rumored tiers are:
    • Refundable (full fare) first class and business class tickets will earn 3 EQMs per mile flown.
    • Discounted first and business earn 2 EQMs per mile flown.
    • Refundable (full fare) coach tickets will earn 1.5 EQMs per mile flown.  I can imagine this will include more than just Y fares (likely B fares as well).
    • Discounted coach tickets (what most of the free world buy) earn 1 EQM per mile flown.
  • Executive Platinum members (EXPs) will receive 4 systemwide upgrades (SWUs) after qualifying in 2016 as opposed to the 8 received in 2015 (and years past for as long as I can remember).  2 more can be earned at 150K EQMs and 200K EQMs.
  • Gold and Platinum members will earn 500-mile upgrade certificates (I still can’t help calling them stickers) at a slower pace, 4 every 12,500 qualifying miles flown.
  • American plans to move to a system of awarding redeemable miles (RDMs) based on how much you spend on your airline ticket, with a bonus depending on your level of elite status:
    • Non-elite members: 5 miles per dollar spent
    • Gold members: 7 miles per dollar spent
    • Platinum members: 8 miles per dollar spent
    • Executive Platinum members: 11 miles per dollar spent

Now, we know what the new award chart will look like.  First, the charts themselves, then some initial commentary.

American Airlines Changes

AAdvantage Economy Award Chart 2016

American Airlines Changes

AAdvantage Business/First Award Chart 2016

American Airlines Changes

AAdvantage First Award Chart 2016

American Airlines Changes

AAdvantage Partner Chart 2016

From where I sit, the average person/family is looking at the following types of award redemptions:

  • Coach within the contiguous US
  • Coach to the Caribbean, Mexico and Hawaii
  • Business/First to Hawaii
  • Business Class to Europe

Nobody really says, “Gosh, I wish I could find an award flight to Detroit in January”.  And, it’s not that First Class To Asia or Australia isn’t really nice.  But, since I’ve never done either (though I did book a one-way F award on the Qantas A380 from Sydney to Dallas next year) that’s not where I’ll focus my comments.  I do think View From The Wing does a good job covering those details in his post.   But, let’s take each of the above areas separately.

Coach Awards Within The Contiguous US

AAdvantage members come out much better here.  Much better.  The standard award is still 25,000 points for a round-trip.  But, they’ve introduced a new award that’s 7,500 AAdvantage miles for a one-way flight of 500 miles or less in the contiguous US.

Given the huge presence US Airways had on the East coast, this covers a lot of cities.  It covers all the “commuter routes” like DCA-BOS, JFK-DCA, JFK-BOS and a bunch of other smaller cities up and down the seaboard.  It’s also great for people who live near hubs like DFW (a bunch of Texas cities) and LAX (lots of places in CA) where they’ll save a bunch on these types of awards.  Obviously, we still need to see how much inventory ends up in these buckets.

Coach Awards To The Caribbean, Mexico and Hawaii

Hawaii gets more expensive in the off-peak awards one-way awards (17,500 to 20,000) but both Caribbean and Mexico drop to 15,000 from 17,500.  That’s a plus as well, since us folks here on the East coast can get to the Bahamas a whole lot quicker than Hawaii.  Not saying Hawaii isn’t a special destination, but I can get to Europe quicker.  Again, I view this as a plus.

Business/First to Hawaii

Saver awards go from 37,500 one-way to 40,000 miles.  Depending on what plane you’re flying, this may be worth it considering it’s roughly 1,000 miles further to fly from DC to Hawaii than from DC to London.  Where you’re situated in the country will make a huge difference on the value proposition.  Obviously, it’s almost half as long if you’re departing from LAX as if you’re flying from NYC or DC.

Business Class To Europe

A one-way business class award goes from 50,000 miles at the saver level to 57,500.  That’s actually in line with United Airlines (and could be in line with Delta if they bothered to tell you how much an award costs) for flights on United metal.  American will charge you the same amount of miles if you want to fly on a partner to Europe (British Airways represents a big chunk of the oneworld seats between the two continents).  That might seem cheap compared to United’s 70,000 mile partner award for the same, but you’ll also pay fuel surcharges for those British Airways flights.

This is where smart travelers will target legacy US Airways routes to Europe.  I’ve done so successfully for our Greece/Paris trip this year and for some trips last year.

Bottom Line

There are negative changes in a number of places on the chart, including specifically to Asia.  That’s a bummer, for sure, but it’s not where the majority of folks will be looking to book awards to.  All in all, I think even detractors of American Airlines will say these changes could have been worse.

I noted last week that I thought American didn’t have a choice when moving to a revenue-based earning scheme.  I got kicked around a bit for that (and it was a bit tongue in cheek).  But, these wheels were set in motion a long time ago, right around the time AA filed for bankruptcy.  Their destiny was taken out of their hands and delivered to the folks at US Airways who definitely were eager to execute on the revenue-based playbook.

They did the smart thing and waited until the merger was mostly complete.  No sense piling on top of customers with bad changes to the loyalty program while you’re operating a faulty airline (looking squarely at you, United).

There’s a lot more to discuss here, but these are my first thoughts.  This is not “we dodged a bullet.”  But, smart travelers will still be able to find value for their miles.  The reasons to collect miles may have changed a bit over the last couple of years, but plenty of good reasons still exist.

7 Comments

  1. Ed — I’ve got to agree with you on many things that you have written being a NYC based flyer, as well.

    As a mainly Coach class flyer, I like the fact that you highlighted some things that the doomsayers neglected — that flights to the Caribbean and Mexico are going DOWN, rather than up in cost — that has not even been mentioned by the others — just goes to show where there heads mostly are!

    I would like to point out as others have noted, however, that some of the other changes that AA has made are not that revolutionary or so beneficent.

    Sure, AA reduced some mileage awards, but anyone worth his or her salt in this game knows that for short haul domestic flights, BA Avios are still a better deal than using AA miles, if for nothing else because there are no close in ticketing fees or cancel charges, so AA’s short haul move, although nice, is not such a big a deal to those in the know.

    Likewise, although AA has kept off-peak pricing, it has constricted in greatly on a number of routes so that the deal is not as wonderful as before — still nice to have, but nowhere as generous as before — but that’s fine with me as tinkering is better than getting rid of altogether.

    Strangely, it appears that they have actually EXPANDED off-peak pricing to Hawaii during the Winter holiday season, though!

    Anyway, kudos to you for demonstrating that the sky is not falling for most who would use AA as their airline.

    However, here is my question to you.

    Why do you have a moniker that states “Life’s too short to fly in Coach” when you appear to take a reasonable view of the changes made by AA to it award chart as well as to status and mileage accumulation on that airline?

    1. Horace, thanks for your thoughts. Keep in mind that BA Avios short-haul awards are changing drastically. And, while I may have missed it, I haven’t read anything that says these be 500-mile reduced mileage awards replaces the discounted awards we currently get through Citi cards. So, I wouldn’t just infer that’s the case.

      As to my slogan, it’s always been a saying I’ve used. That being said, I have debated changing it recently. But, I still don’t want to fly in coach to Europe. Or Hawaii for that matter. Or a lot of places.

      I don’t see much changing for the worse in how I earn status with AA (one could argue it’s getting easier with EQPS going away). And, if you’re earning most of you’re miles through flying, you’re missing the boat. Plenty to be earned through credit cards to balance out these changes.

      Really appreciate your weighing in. This change isn’t “bad” or “good”. It’s nuanced, and we should treat it as such.

      Though the partner earning and SWU reduction really are still a kick in the gonads!

  2. Ed, I have to say that there’s no dodged bullet here. This was a gutting.

    Discounted mile awards have long been available on domestic markets for AA cardholders, rendering the new lower mileage flights much less valuable.

    AA is now charging comparable prices to Europe in Business to DL/UA, but with vastly worse availability, unless you count BA, witch has enormous fuel surcharges.

    Low season flights to Europe have been increased in price, while heavily curtailing available dates.

    Prices to Asia in first are now more expensive than using Alaska miles to fly Emirates First.

    Low season redemptions to South America have been removed.

    None of these are good. Put together, along with a general lack of award availability, they’re just awful. I (naively, in retrospect) figured that with the terrible changes in earning miles that there was no way that American would eviscerate the redemption side of things without a year or two in between. Mea culpa.

    1. Christian,

      I think we’re just going to have to disagree on some of these points here. I do understand these changes are bad for you, and a lot of the diehards I call friends. No doubt the prices on Asia F awards are big changes.

      But, the vast majority of people redeeming for flights (literally could be 99%) aren’t redeeming for F to Asia.

      Most people don’t redeem for low season either. And, while BA might charge fuel surcharges, I don’t see anywhere near as much UA Business availability as I used to, which means paying 140K to fly LH. Some might like the higher mileage versus fuel surcharges, and I think reasonable minds can disagree on how bad this is.

      Discounted awards have been around, but a dedicated bucket for all flights 500 miles or less is a big plus, unless they don’t put anything in the bucket.

      I’m an AA fan, so you may accuse me of rose-colored glasses. But, I just can’t bring myself to call these changes horrible. I’m open to being wrong…..

  3. What is your base to make a statement of “There are negative changes in a number of places on the chart, including specifically to Asia..but it’s not where the majority of folks will be looking to book awards to. “ ? Just because you visit exclusively to Europe doesn’t mean the rest of your readers are the same. In fact, the Asiazone 2 falling in the most bombarded area on new redemption scheme more or less reflects it is actually a hot zone that AA need to charge ridiculous 42.5% more miles. I am also a very loyal EX PLAT for 8 years and I am very upset about all these changes. I just don’t understand, as a blogger, EX PLAT and self acclaimed AA fan , how can you not feel the pain like the most your readers? What bring you so far from the people? That in general very light, calm and even sugarcoated tone sounds like a PR release straight from AA.

    1. Shannon, I’ve got Australia booked next year and will also likely do HKG and Tokyo as well. So, I’m not exclusive to Europe. But, it’s just reality that some very small number (I think it’s 1% or less) of people who redeem miles are doing it for F awards to Asia. In the four cases I list in my post, I’m not 3 of them (don’t use miles for coach travel in the US or Hawaii all that often, occasionally to the Caribbean or Mexico).

      We are the outliers, you and I. It sucks that AA raises some awards you value, but they catered these changes to where the majority of people are redeeming. You asked me “What brings you so far from the people?” In reality, you and I are both pretty far away from “the people”. Most of the people I speak to are looking to save up enough miles to get to the Caribbean, Hawaii, or maybe Europe. Not First Class to Asia.

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