American Airlines today released their new AAdvantage program for the combine US Airways and American Airlines frequent flyers. The news has made many bloggers very happy as there are not any significant changes (for the American elite) and really will only affect the US Airway elites who are used to getting complimentary upgrades (or at least having the ability to receive them), no matter the elite level.
To read the writeups about the new program, check out these posts at View From the Wing and One Mile At A Time. They are both Executive Platinum (AA’s highest tier) members and can provide the best analysis as one who is at that tier. While I have held top tier status on Delta and United, I have never made it past Platinum on AA so they would be able to give a better sense than I would.
The New AAdvantage Program
Some of the more significant (and nicer) changes that were made were things like:
- Complimentary upgrades on flights under 500 miles (when you would have had to use a sticker – AA’s upgrade process for Golds and Plats – before)
- Upgrades will be automatically requested
- And the top tier elites in both programs will now receive snacks and drinks when in the main cabin 🙂 (not really incredibly significant, but they did make a point of mentioning that in Right Now section of changes)
What they left off of the new program was any mention of a revenue component for earning status (like Delta and United have). I know that many AA top tiers who qualify on cheaper tickets were very happy to hear about that. However, to be fair, they have had a somewhat revenue-tied qualifying component for a while anyway. Of the ways to reach elite status with American, qualifying on points is one of them. Points are determined by the class of travel that you have purchased – the cheapest economy tickets only get .5 a point while premium fares get 1.5 points.
The combining of elite levels
Another positive in the announcement is that the programs will be combined in the 2nd quarter which will allow your US Airways Dividend Miles and your AA AAdvantage miles to be in the same account and combined. This will be very helpful for booking award tickets as your total will include all of your US Air and AA miles.
The Elephant In The Room
The glaring thing that is missing from this announcement of the new AAdvantage program that will kick in in 2015 is any mention of what the new AAdvantage award redemption charts will look like. There were many mentions made that AA did not make any changes but that is just that they have not made any changes yet. Here is their current award chart.
They will certainly have to make changes to the award chart as it is currently the most generous of the big three airline programs with what they allow you to do. Not only is the program generous, but they also allow you to book awards on partners in their premium cabins that are really awesome.
United has hiked the cost of award redemption for partners’ premium cabins to huge amounts of miles and Delta has not really said what things will look like for partner flights yet (they still have not released award charts that cover the whole world). Even if Delta leaves it as it is now (which is that partners book at the saver level), they are still miles behind American Airlines in that regard since you cannot book first class on partners with Delta miles (because Delta does not have their own international first class cabin).
Some of the partners that you can book premium cabins with are Cathay Pacific, British Airways, Japan Airlines, Qantas, Malaysia Airlines, Etihad Airways, and Qatar Airways. All of those airlines have really good premium cabins and you can book them for less than 100,000 miles one-way (some of them much less).
oneworld partner airlines
What Award Changes May Look Like
American Airlines has to change the redemption charts for a number of reasons:
- The combination of two large programs and all of their miles (will create a huge mileage pool that people will use for mass redemptions)
- The sale of US Airway miles (they have sold so many miles at a cheap price for premium redemptions, many of those purchases waiting to have those miles combine with AA miles)
- The Citi Executive AAdvantage 100K bonus (letting that deal run for several months with people opening multiple cards minted millions of AA miles)
Those are just the three big reasons why AA will need to make some change. When the programs combine, it will create a pool of billions of AA miles that people will be eager to spend. While many miles have been spent already, there are still many more in accounts and some of those account holders are just waiting for the accounts to combine.
The Areas Affected The Most
My guess would be that American Airlines will hike the partner awards up (for premium travel) with the Asia regions and the Middle East seeing the largest increase. That is where their most expensive partners have hubs and where the greatest value in redemptions lie. I imagine there may be a bump on their own premium redemptions but nothing too significant.
Given that the programs are expected to merge in the 2nd quarter, I imagine we will be seeing the roll out of a new AA award chart either just before that merging occurs or immediately after. American has already shown us this year that they do not have a problem making changes without announcement and in immediate effect so that could be something they do with the chart.
Why They Did Not Announce This Today?
But, my biggest feeling for how bad the new award chart is going to be comes from the fact that American released their new program details now. Nothing really is going to change until 2015 and even then, the qualification requirements are for the 2016 year (people have until December 31 to qualify for elite status in 2015). They released a program that, for the most part, is incredibly pleasing to their elite base and they are getting a lot of goodwill from that. People were expecting the worst and instead got something very generous that could actually bring over elites from Delta and United.
With all of that being said, they have to do something to balance it out. That they did not release their new award chart at the same time tells me that they did not want it to muddy the pleasant announcement of the elite program. Not only that, but they may be hoping to bring over elites from Delta and United in the early part of 2015 and that would give them several months of having a new customer base before they drop the bomb on the award chart.
What To Do To Plan For Redemptions
In light of a potentially horrible award chart, I think we at least know that we have several months to book awards at the current rate. I seriously doubt we would see anything happen in the first couple months of the year as they allow their elites to adjust to the new program. So, we have time to accrue more miles from credit card applications, plan out trips, book those trips and have it in place when the new chart comes.
American Airlines has the best credit card offers when it comes to easy to achieve bonuses. That is because, historically, people have been able to get multiple credit card bonuses sometimes while still holding the same card. Not to mention that the offers are almost always available at the 50,000 mile level, AA miles are easy to get.
Here are some links to those cards that will give you the most miles (these are not affiliate offers):
– Application Link – CitiBusiness AAdvantage World Mastercard – 50,000 miles after spending $3,000 in 90 days – $95 Annual Fee (waived the first year)
– Application Link – Citi AAdvantage Platinum Mastercard – 50,000 miles after spending $3,000 in 90 days – $95 Annual Fee (waived the first year)
– Application Link – Citi Executive AAdvantage World Elite Mastercard – 50,000 miles after spending $5,000 in 90 days – $450 Annual Fee (not waived)
Honestly, this is just pure speculation from a non-AA elite. this is about as useful as asking a random person on FT what their thoughts are.
No, it is speculation from someone who follows this industry closely. I would venture to say that I am still better informed on some of this than many AA EXP since their focus does not have to be about awards. That is why I left the elite status area to Ben and Gary and chose to comment on the award structure.
So, what part of my speculation do you disagree with?