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Back in November American Airlines announced that it would be following the pack and devaluing the once excellent AAdvantage loyalty program. The devaluation had been coming for sometime (AAdvantage was simply too good compared to the rest) and most of us weren’t surprised when the news finally came out. What was surprising, however, was the amateurish way the devaluation was handled by the airline – something I feel too many bloggers have given them a pass on.
American Airlines Amateurism
The amateurism started with the way American Airlines’ customers were fed the news of the devaluation via a series of leaks.
Rather than coming out with one big announcement and telling us all what the future of the AAdvantage program was to look like, everything came out piecemeal.
During the week of 2 November the airline allowed various bits of information about the changes to AAdvantage to be drip fed out into the internet through unofficial channels….but nothing was made official. The leaks told us that the AAdvantage program would be moving to a revenue-based model, we found out that the way elite status was earned wouldn’t change too much and we found out that numerous benefits (SWUs etc…) would be cut or eliminated.
On November 16th Suzanne Rubin (AAdvantage President) was happy to use a press conference in Sydney to hint at the changes to the AAdvantage program but it wasn’t until the 17th that American actually made any official announcement.
On November 17th American Airlines confirmed all the news we’d already had via the leaks 2 weeks before and added information about the new award charts….but still couldn’t tell us when the new revenue-based program would be put into place.
Let me just emphasise that last point. The world’s biggest airline had been working on the changes to their loyalty program for over a year but, when it came time to announce the changes, the best they could do was to tell us when half of them would be enacted. We were told that revenue-based system would come in to effect in the “second half of 2016” (possibly 3Q). That’s the best they could do – it was pathetic.
Why Is This Important?
The way AAdvantage miles will be awarded under the new revenue-based system is very different to how they’re currently earned and passengers have a right to know what miles they can expect to earn before they book their tickets. Right now they’re in the dark.
American Airlines customers can, as of now, book flights into December 2016 but, with no date given for the program change-over, they have no way of knowing how many miles their flights will earn them – will flights in August earn under the current methodology or the new one? It can make a big difference!
Here’s an example at work for an Executive Platinum Member:
Currently there are some exceptionally good First Class fares available for travel between Dublin and Las Vegas in July & August 2016. The flights are on British Airways but, as you can see from the screenshots below, they can be booked as American Airlines codeshares:
AAdvantage Miles earned under current system
Under the current AAdvantage rules, miles are awarded based on the cabin a passenger travels in and the distance traveled.
This trip breaks down into two short-haul Full Fare Business Class segments (between Dublin and London) and two long-haul Discount First Class segments (between London and Las Vegas):
Dublin – London
Distance traveled = 280 miles in Business Class
Earnings: 500 AAdvantage Miles (500 mile minimum kicks in) + 500 miles (EXP bonus) = 1,000 AAdvantage Miles.
London – Las Vegas
Distance traveled = 5,229 miles in First Class
Earnings: 5,229 base miles + 2,614 (50% Class of Service Bonus) + 5,229 (EXP bonus) = 13,072 AAdvantage Miles
The total miles earned between Dublin and Las Vegas is 14,072 AAdvantage miles but, as this is a round trip, this needs to be doubled to 28,144 AAdvantage Miles
But the mileage earning doesn’t end there. Under the current system American Airlines flyers earn yet more bonus miles for flights in premium cabins.
An AAdvantage Executive Platinum member will earn the following:
On this trip that amounts to an additional 26,000 miles (1,000+12,000+12,000+1,000) giving a trip total of an impressive 54,144 AAdvantage Miles.
But what was to happen if American Airlines was to introduce their revenue-based program before these flights were taken?
AAdvantage Miles earned under the new, revenue-based system
Under the new revenue based system things are a lot simpler. There are no separate EXP bonuses or class of service bonuses to consider – everything is wrapped up in the price of the ticket and a multiplier based on the passenger’s AAdvantage status.
The new system calculates the AAdvantage Miles to be earned using this simple formula:
Price of ticket (excluding taxes) x AAdvantage Status Multiplier
The AAdvantage Status multipliers are as follows:
- No Status – 5 miles/dollar spent
- Gold – 7 miles/dollar spent
- Platinum – 8 miles/dollar spent
- Executive Platinum – 11 miles/dollar spent
In the example I’ve been working with American Airlines gives a breakdown of the ticket cost:
Carrier imposed fees are included in the new revenue-based calculation so the formula would look like this:
2,676.68 (Base fare + Carrier-imposed fees) x 11 (EXP multiplier) = 29,445 AAdvantage miles.
That’s 24,699 miles less than a passenger would earn under the current system.
What’s The Alternative?
Passengers don’t have to credit the miles to AAdvantage, they always have the option of crediting to another program (like Alaska’s) or simply booking the fare via British Airways and crediting the trip to the British Airways Executive Club.
Earning Avios For the Trip
As bad as the British Airways Executive Club (BAEC) is (and boy is it bad!) at least it hasn’t gone down the road of a revenue-based system. Also, the BAEC is quite generous when it comes to awarding Avios for premium cabin travel.
For the purposes of this example I’m going to assume that the passenger crediting the flights to British Airways has no status with BA – If the passenger has EXP status with American (which I what I based the last calculation on) he/she is unlikely to have a good status with BA.
The Booking Classes for the British Airways Flights are J & A
Dublin – London
Distance traveled = 280 miles in Flexible Business Class (J)
Earnings: 280 miles x 250% = 700 Avios…but the minimum of 1,250 Avios kicks in.
London – Las Vegas
Distance traveled = 5,229 miles in Lowest First Class
Earnings: 5,229 x 250% = 13,072 Avios
The total Avios earned between Dublin and Las Vegas is 14,322 but, as this is a round trip, this needs to be doubled = 28,644 Avios.
Bottom Line
I’m sure there will be a lot of people who will argue that they would still prefer to earn 29,445 AAdvantage miles (under the new revenue-based system) than 28,644 Avios, but I’m not sure I’m one of them…..and there’s always the option of crediting the flights to Alaska if that’s better for you.
Before the devaluation there would have been no question as to which miles I would prefer – I’d have chosen AAdvantage Miles every single time – but possibly not now.
I can make very good use of my Avios balance on short-haul intra-Europe trips where the “Reward Flight Saver” option removes the ridiculous surcharges that BA loves to impose and where some flights can be very expensive during peak months.
With international Business class fares regularly coming below the $2,000 level (just check the Airfare Deals page) I’m not convinced that AAdvantage Miles can get me as much value as I can extract from Avios on the expensive short-haul routes.
With all that in mind, I expect to be able to make an informed decision when I come to purchasing flights for 2016 travel but
American Airlines’ inability to get their act together is preventing that from happening.
Is it too much to ask an airline to let us know how many miles we will earn before we hand over any cash? Apparently American Airlines thinks it is.
[…] some point in the second half of 2016 (they still can’t tell us when) American Airlines will be the third and last US legacy airline to change over to a revenue based […]