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.
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.
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.