And then there were none: As expected, American Airlines has joined rivals Delta and United in converting its AAdvantage frequent-flyer programme from a mileage-based to a revenue-based model. There's irony at work here, given that American launched the mileage-based model (and indeed, launched the entire modern loyalty industry) with the original AAdvantage programme in 1981. Now that the airline has bowed to the inevitable, how will its frequent flyers react?
The AAdvantage programme will also make changes to how members qualify for elite status and introduce a new elite level in 2017. Money quote from Andrew Nocella, American's Chief Marketing Officer: "American Airlines is evolving AAdvantage to continue our tradition of having the best loyalty programme in the world by rewarding our most loyal customers with the benefits they value the most."
For travel beginning August 1, 2016, flights marketed by American will earn award miles based on the price of the ticket purchased. Elite members will earn even more miles based on their status level.Earnings per tier are nearly identical to those offered by Delta and United:
- General AAdvantage members: 5 miles/dollar
- Gold (earned after flying 25,000 miles): 7 miles/dollar
- Platinum (earned after flying 50,000 miles): 8 miles/dollar
- Executive Platinum (earned after flying 100,000 miles): 11 miles/dollar
On January 1, 2017, the AAdvantage programme will add a fourth elite level for customers: Platinum Pro, which can now be earned after flying 75,000 miles (or 90 segments) plus $9,000 in matching spend. Placed between Platinum and Executive Platinum levels, members will receive benefits, including:
- Complimentary auto-requested upgrades on all eligible flights within North America and between the U.S. and Central America
- Earn 9 award miles/U.S. dollar (80% bonus)
- Two free checked bags
- Oneworld Sapphire status
The most noticeable and certainly the most potentially irksome programme change for members will be changes to upgrade priority for elite flyers. If you're a high-spending flyer who often books full fares at the last minute, then you'll be spending more time in business class; if you fly a lot of miles but typically book ahead to save money on fares, you'll likely spend more time in steerage. If you're the latter type of flyer, you won't like the changes - but where will you go? Delta and United won't upgrade you any more than American will.
That's the new world of parity for major U.S. carriers, and the new reality for frequent flyers. The truth is that the industry is finally issuing a corrective that should have occured a long time ago: rewarding its most valuable customers rather than the ones who merely book a lot of miles on cheap fares to earn status. If American Executives could time-travel back to 1981 and convince AAdvantage architects to change the original programme to a revenue-based structure, there's no doubt they would do so. While these changes may outrage the flyers who hang out on the frequent-flyer forums, they are necessary to the long-term success of these programmes. With the three major U.S. carriers now aligned, the winner will be the airline who best leverages the programme to deliver a personalised, relevant, and rewarding customer experience.
-Rick Ferguson
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