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American Airlines

post #1 of 15
Thread Starter 

Anyone care to comment around the pros/cons they see when airlines go from a mile-based rewards program to a $-based one?

American Airlines is following other airlines by basing perks like free flights on how much passengers spend on tickets, not how many miles they fly. The change, which matches those at Delta Air Lines and United Airlines, starts with flights on Aug. 1 and rewards American's highest-paying passengers.

Elite-status members of American's AAdvantage frequent-flier program will earn bonus miles for every dollar they spend.

American said most members will earn five miles for every dollar they spend on base fares and carrier-imposed fees. That multiple rises to seven, eight or 11 for elites — gold, platinum and executive-platinum members.

Miles alone will no longer make you elite. Starting Jan. 1, customers will have to hit annual mileage marks and spending minimums, including at least $3,000 for gold and $12,000 for executive-platinum. A fourth level will be added just below executive platinum.

Besides Delta and United, spending-based rewards are now the rule at Southwest Airlines, JetBlue Airways and Virgin..

post #2 of 15

My comment from recent experience is:  In America, all men (people) are created equal, except when you travel on an airplane.

post #3 of 15
Quote:
Originally Posted by naja View Post
 

Anyone care to comment around the pros/cons they see when airlines go from a mile-based rewards program to a $-based one?

American Airlines is following other airlines by basing perks like free flights on how much passengers spend on tickets, not how many miles they fly. The change, which matches those at Delta Air Lines and United Airlines, starts with flights on Aug. 1 and rewards American's highest-paying passengers.

Elite-status members of American's AAdvantage frequent-flier program will earn bonus miles for every dollar they spend.

American said most members will earn five miles for every dollar they spend on base fares and carrier-imposed fees. That multiple rises to seven, eight or 11 for elites — gold, platinum and executive-platinum members.

Miles alone will no longer make you elite. Starting Jan. 1, customers will have to hit annual mileage marks and spending minimums, including at least $3,000 for gold and $12,000 for executive-platinum. A fourth level will be added just below executive platinum.

Besides Delta and United, spending-based rewards are now the rule at Southwest Airlines, JetBlue Airways and Virgin..

Well it will be Pro for some folks who have more $spend  and Con for other folks who have more mileage runs.  

 

Overall for the whole thing it could be structured so it will wash out if they wanted to, but usually not.   Some folks have done the math and in general you're getting less miles.

 

 

http://viewfromthewing.boardingarea.com/2015/11/08/how-badly-will-americans-move-to-revenue-based-earning-hurt-your-mileage-balance/


However, if your into the status for the other status perks like free upgrades rather than just the miles, the more important thing is if the plan leads to status dilution or status concentration.  If it is easier for people to get status  (either through corporate airline mergers or credit cards or whatever) then the status becomes meaningless if everyone has it.  But if it becomes harder for people to get status, and you still can get it, this moves you up on the pecking order for free upgrades.

post #4 of 15
It's a response to the gaming of the system I'd guess. Airlines want to maximise revenues naturally and this is the easiest way of doing it by incentivising actual spend rather than perverse mileage runs or trading flights with outlying members of an alliance. I once got instant Star Alliance Gold for a single biz return UK-US credited to Aegean. Those loopholes have been closing but awarding miles based on spend is logical and some would say fair - why should I get loads more miles for snapping up a bargain biz class flight in some promo in advance compared to paying well over the odds for a cattle class fare booked the day before?
post #5 of 15
Thread Starter 
Quote:
Originally Posted by fatbob View Post

It's a response to the gaming of the system I'd guess. Airlines want to maximise revenues naturally and this is the easiest way of doing it by incentivising actual spend rather than perverse mileage runs or trading flights with outlying members of an alliance. I once got instant Star Alliance Gold for a single biz return UK-US credited to Aegean. Those loopholes have been closing but awarding miles based on spend is logical and some would say fair - why should I get loads more miles for snapping up a bargain biz class flight in some promo in advance compared to paying well over the odds for a cattle class fare booked the day before?

 

I don't see why I should get more "miles" than you on the same flight only because I am travelling on business on that flight and paid the going fair, versus you who might have looked around or timed it better and gotten a lower fair.

 

I also don't see why I should get more miles if I booked a next day flight from NYC to Chicago for $750 to go to a business meeting while you booked a much longer flight from NYC to LA a month out for $400.

post #6 of 15
At this point, it's a rather moot point. Every domestic airline of consequence except Alaska is Rev based. I used to pay extra to fly United, but it's all cost now with a preference to operational excellence...aka not united.

I quit mileage running in 2013. I miss the days of pulling 22k EQM for $300 that I (ab)used in 2012.
post #7 of 15
Thread Starter 
Quote:
Originally Posted by raytseng View Post
 

Well it will be Pro for some folks who have more $spend  and Con for other folks who have more mileage runs.  

 

Overall for the whole thing it could be structured so it will wash out if they wanted to, but usually not.   Some folks have done the math and in general you're getting less miles.

 

 

http://viewfromthewing.boardingarea.com/2015/11/08/how-badly-will-americans-move-to-revenue-based-earning-hurt-your-mileage-balance/


However, if your into the status for the other status perks like free upgrades rather than just the miles, the more important thing is if the plan leads to status dilution or status concentration.  If it is easier for people to get status  (either through corporate airline mergers or credit cards or whatever) then the status becomes meaningless if everyone has it.  But if it becomes harder for people to get status, and you still can get it, this moves you up on the pecking order for free upgrades.

 

I think the difficulty in getting upgraded or using miles to get tickets is not because so many people have status. Rather, I think it's more a reflection of fewer planes and fewer seats available for upgrade/mileage.

 

If anything, I think there are less people with Gold or Platinum or Executive Platinum. I think more and more people either can't afford to fly or they fly the most economical way possible, irrespective of the airline. I don't think too many people can afford to fly on one or two airlines all the time without regard to the price.

 

Just my $0.02

post #8 of 15
Quote:
Originally Posted by fatbob View Post

It's a response to the gaming of the system I'd guess. Airlines want to maximise revenues naturally and this is the easiest way of doing it by incentivising actual spend rather than perverse mileage runs or trading flights with outlying members of an alliance. I once got instant Star Alliance Gold for a single biz return UK-US credited to Aegean. Those loopholes have been closing but awarding miles based on spend is logical and some would say fair - why should I get loads more miles for snapping up a bargain biz class flight in some promo in advance compared to paying well over the odds for a cattle class fare booked the day before?

I should point out that there is some very atractive (sub $1600) business class fares right now through end of schedule from many us airports to various German airports. Octoberfest or ski season, your choice.
post #9 of 15

I have always been of the opinion that Air Miles was a violation of truth in advertising and the earning of Air Inches was more accurate terminology.

post #10 of 15
Quote:
Originally Posted by naja View Post
 

 

I think the difficulty in getting upgraded or using miles to get tickets is not because so many people have status. Rather, I think it's more a reflection of fewer planes and fewer seats available for upgrade/mileage.

 

If anything, I think there are less people with Gold or Platinum or Executive Platinum. I think more and more people either can't afford to fly or they fly the most economical way possible, irrespective of the airline. I don't think too many people can afford to fly on one or two airlines all the time without regard to the price.

 

Just my $0.02

That I will agree with, many have bemoaned the race to the bottom, where internet booking has made fare difference the most importnat thing.

 

But perhaps just the same as the US social structure, it's the middle class that's getting squeezed out, where you either need to make the run to elite, or you resign yourself to steerage class.

post #11 of 15
Thread Starter 
Quote:
Originally Posted by raytseng View Post
 

That I will agree with, many have bemoaned the race to the bottom, where internet booking has made fare difference the most importnat thing.

 

But perhaps just the same as the US social structure, it's the middle class that's getting squeezed out, where you either need to make the run to elite, or you resign yourself to steerage class.


Absolutely - the "middle class" will get screwed here.

 

The person who travels for business 2-3 times per month will new fine and continue to reap benefits. The person who can't afford to travel often - say once every few years - will continue to get zero benefits. And then folks like myself who travel 4-5 a year on business and 1-2 with my family, we will get screwed. 

 

I have 270K miles on American - thinking I should use them sooner rather than later!

post #12 of 15

Business travelers will make out just fine.  Those of us who make an occasional vacation trip and shop for the best fare will lose.  I figure I will get about half the miles I used to for my annual NY to Denver trip in February. 

post #13 of 15
Thread Starter 
Quote:
Originally Posted by JimH View Post
 

Business travelers will make out just fine.  Those of us who make an occasional vacation trip and shop for the best fare will lose.  I figure I will get about half the miles I used to for my annual NY to Denver trip in February. 

 

Yup - I think this will get people who travel on business to care even less than they may already do about the cost of the ticket - it will likely push many of them towards the more expensive ticket options so they can gain the points. It will likely lead to an increase in corporate/business spend on airline tickets. 

 

It will likely not impact the top 1% or have much of an impact on the bottom 33% who rarely if ever travel and are far from achieving any kind of status or accumulate any kind of significant amount of miles. The bottom 33% also cares more about price than airline loyalty the rare times they do travel.

 

The other 65% or so of people - a person who may travel two or three times a year for work and twice a year with their family - they will get screwed.

 

But this is what happens when what used to be 7 or 8 national carriers (TWA, Continental, Easter, US Air, Northwest,...) all merged, now there's 4 big carriers, soon maybe even less. 

post #14 of 15

Delta has upped it's Diamond requirement for $ every year for the past 3 which is now 125,000 miles and $15,000 / year. I don't like it, but get to that level anyway, without getting pricy fares.

 

Being on their planes every week, I expect to get some form of benefit, and usually do in the form of upgrades and perks, and honestly expect that versus someone who just comes on an occasional basis.

 

Hotels are doing the same thing, rewarding their best paying customers.

post #15 of 15
Quote:
Originally Posted by snofun3 View Post

Hotels are doing the same thing, rewarding their best paying customers.

Thankfully there is still a little more fragmentation. Hopefully the feds don't allow a consolidation to 4 main players. Losing spg to Marriott doesn't help.
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