American's New Rewards Program: Who Wins, Who Loses?
Image via American Airlines
American Airlines customers who use the AAdvantage loyalty program will have to get used to thinking of their mounting rewards in monetary and not mileage terms.
The airline, via a press release, reports that it will evolve its rewards program from one that utilizes distance for its respective flyers and use one that takes into account dollars spent beginning in mid-2016.
President of AAdvantage Suzanne Rubin spoke to the change that is becoming a growing standard in the industry.
Rubin states, “American Airlines has spent the last two years being singularly focused on integration. Now we're at a point where we can begin to look ahead and lay the foundation for the future of the AAdvantage program to ensure we're rewarding our most loyal customers with the benefits they value the most. We seamlessly integrated our programs in 2015, and we're excited about the opportunities that the program will offer our customers in the years to come.”
As Fox News found the loyalty program will do more in the future for the more extravagant traveler than it will be for those stuck in the back of the plane: “Travel experts say that economy travelers flying long distances are most likely to lose out and the winners are those who frequently fly with high priced tickets.”
As for the particulars, the new initiative takes place in the second half of 2016 and rewards as little as five miles for every U.S. dollar spent for AAdvantage members and as much as 11 dollars for Executive Platinum members.
You can see for yourself the breakdown thanks to this handy table, via a press release:
LOSERS: Less miles for short-trip flyers
Those on the lower end of the spectrum do miss out on what is currently offered. Fox News found: “Under the new program, regular AAdvantage members will earn five miles per every dollar spent instead of the miles flown. For example, a $350 round-trip flight from Phoenix to Chicago will earn 1,750 miles in 2016, compared with about 2,800 miles today.”
WINNERS: Less miles needed for most shorter trips and hotspots
Now there is some good news thrown in with the bad. The airline proclaimed that redemption levels with be reduced under the new program “by as much as 40 percent.”
Also, “redemption levels to popular destinations in Mexico, the Caribbean and Central America will be reduced, and MileSAAver awards for flights 500 miles or less in the U.S. and Canada will be redeemable for as low as 7,500 miles one way (plus any applicable taxes and carrier-imposed fees).”
However, popular domestic and European destinations will see an uptick in value. American Airlines explains in detail as Rubin continues, “A significant percentage of our flights are less than 500 miles, so offering a lower MileSAAver option only makes sense for our customers. Other routes will be adjusted to match increased customer demand.”
WINNERS: Long-haul luxury business and leisure travelers
LOSERS: Economy-class international flyers
The Points Guy spells out in detail what this means for consumers with affected routes: “For example, beginning on March 22, 2016, SAAver-level business class to Europe goes from 50,000 miles to 57,500 each way and first class to Asia Region 2 (including Hong Kong) goes from 67,500 to 110,000 miles.”
What this all means is those who use the premium offerings will get a bit more bang for their aviation buck. Simply put, the rich get richer and the middle class gets the shaft.
The Points Guy states: “There will be winners (people who spend more and fly on expensive tickets) and losers (economy class international flyers). If you’re not earning more miles in the new system, you’ll likely also feel the pinch of the increase in miles needed for award flights.”
The airline will still allow flyers to get in on premium offerings in two ways, discarding Elite-qualifying points.
You can either earn Elite Qualifying Miles by purchasing flights at higher fares or get in on Elite Qualifying Segments with “eligible” flight segments.
The airline also boasts “the most generous multipliers in the industry.”
American Airlines is following suit with an industry that is already leaning favorably towards fare based loyalty rewards programs over the time-honored mileage ones.
For those who consider an airplane seat something of a second home and pay handsomely for that real estate, the program just became a bit more lucrative, giving the luxury traveler a way to cash in on exhausting itineraries.
More by Gabe Zaldivar
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