American Airlines AAdvantage Devaluation: How The Earning Rate Changes Will Affect Me

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We started to find out about American Airlines’ devaluations to their AAdvantage loyalty program around the beginning of November…and they weren’t pretty. I’ve already covered some of the bigger hits that I’ve noticed:

American Airlines AAdvantage Award Chart Devaluations – Euro Travelers’ Viewpoint

American Airlines AAdvantage Changes – Effect on Redeemable Miles

But one of the better ways to see what effect the devaluations to a program will have is to compare what you earned under the existing policies and earning structure to what you would have earned if the new, devalued, policies and earning rates had been in place instead. So that’s exactly what I’ve done.

What I’m Comparing

I’ve analysed out my travels for the year (2015) and seen how the redeemable miles I earned this year compare to what I would earn if I took the exact same trips after the AAdvantage devaluations have kicked in.

As American Airlines has, to all intents and purposes, kept the way we earn elite status the same (at least for the time being) I have not performed any analysis on the number of Elite Qualifying Miles I’ve earned.

Redeemable Miles: Current Earnings v New Earnings

All the following figures are take from the point of view of an American Airlines Executive Platinum member (OneWorld Emerald).

Current Earning Structure:

Travel booked through American Airlines:

• Passengers earn 1 redeemable mile (RDM) for every mile flown – irrespective of fare code/ticket price.
• Passengers in Business Class and First Class earn an additional 50% “class of service bonus”
• AAdvantage Executive Platinum members get a 100% mileage bonus

Travel booked through Partner Airlines

• Passengers earn RDM based on the fare code on which the passenger is traveling. On most partner airlines the cheaper the fare the fewer RDM are awarded. The actual number of RDM earned varies from partner to partner.
• Passengers in Premium Economy, Business & First Class will earn “class of service bonuses” ranging from 25% to 50%.
• AAdvantage Executive Platinum members get a 100% mileage bonus

New Earning Structure (from late 2016):

Travel booked through American Airlines:

• AAdvantage Executive Platinum members earn 11 miles/dollar spent
• Earnings are on the base airfare and carrier charges only. Taxes are excluded from the calculation.
• No other bonuses will apply.

Travel booked through Partner Airlines:

• No changes to how the airlines calculate the redeemable miles earned but the multipliers that determine how many miles are earned are reduced in the case of most partner airlines.

My Travels In 2015

While I traveled to a fair few places in 2015 the airlines I used weren’t that varied at all.

As usual, in 2015 my primary carrier was American Airlines and I supplemented my travel on American with a few flights booked with British Airways and one booked directly with Finnair.

Redeemable Miles Earned On Flights Booked Through American Airlines in 2015

In this case the $ figure is only included for reference as, under the current earning rules, it plays no part in working out how many redeemable miles are awarded.

So, in 2015, I earned a total of 175,423 AAdvantage miles from flights booked through American Airlines. How would that number change had the new rules been in place from the start of the year?

Under the new AAdvantage earnings system (based on $ spent) I would have earned just 98,143 redeemable miles. That’s a 44% drop.

And that’s not the worst of it. I don’t have the breakdown of all my fares to hand so the dollar figures in these tables is the full amount I paid…including taxes. As American Airlines will not be including taxes in its calculations I would have actually earned even fewer redeemable miles than the table shows!

Redeemable Miles Earned On Flights Booked Through British Airways in 2015

During 2015 all my flights booked through British Airways were not only in Economy Class but also in the lower fare buckets of Economy Class. In 2015 this didn’t matter as even the lowest fare buckets still earned redeemable miles at a rate of 100% of miles flown.

However, under the newly devalued AAdvantage Partner Award chart for British Airways, the lower fare buckets don’t earn anywhere near 100% of miles flown…they earn just 25%. So how would that have affected my earnings for 2015?

While I actually earned 42,800 AAdvantage Miles for my flights booked on British Airways in 2015, under the new award charts I would have earned just 10,431 – a 76% drop!

Other Flights

That leaves just one flight that I haven’t yet covered at that was a short-haul Finnair flight.

As things stand there haven’t been any changes to the Finnair Award chart so my earnings would not change under the new rules:

Summary

In 2015 I earned a total of 220,525 redeemable AAdvantage Miles through my travels on various airlines. But, had the new devalued award charts and earning methodology been in place, those same flights would have earned me just 110,875 AAdvantage Miles – a 49.7% drop.

Bear in mind two very important things:

• I hold top tier status in the AAdvantage program so I will be earning the maximum number of miles possible on these types of flights under the new earnings system – just think how those with lower status will fare.
• The dollar figures I’ve used include taxes (as I have no way of stripping them out from my figures) so my projected earnings under the new methodology would actually be lower than what my figures show.

My travel patterns don’t differ much from year to year. Sure I go to different places but I also usually purchase the same class of tickets (usually in the lowest available fare buckets) and I usually travel roughly the same number of miles – so this comparison is probably a good indication of how my redeemable mileage earning will drop once the new earnings system is in place.

So, a quick question to those who were telling us that the AAdvantage devaluation wasn’t so bad: If you don’t consider a 50% decrease in earned miles a “bad devaluation”, what exactly does a devaluation have to look like before you call it bad?