American Boosts Requirements by 20% for Top Loyalty TierMary Schlangenstein
American Airlines Group Inc. is making it harder for some of its most loyal customers to reach top status, while sidestepping a total revamp as it prepares to combine its travel awards plan with that of merger partner US Airways Group Inc.
American will remain the standout among the biggest U.S. carriers as Delta Air Lines Inc. and United Airlines plan to shift the basis for awards to the amount spent on tickets from miles flown. That move penalizes those who gain status by flying a lot on the cheapest fares.
Meshing loyalty plans is one of the biggest concerns for the most frequent customers at American and US Airways because they don’t want to lose benefits or their awards status. The airlines merged in December to create the world’s biggest carrier. It also has the largest loyalty program, with about 100 million members.
“If there was a time to make a big change, I would have thought this would be it,” said Brian Kelly, who runs a website called The Points Guy that helps consumers maximize travel awards. “American was the first frequent-flier program, and they’ve always been a leader in the space. This could differentiate them down the line.”
Delta’s shift to the revenue-based system takes place on Jan. 1 and United’s on March 1.
“We’re watching the marketplace and will continue to do so, but our top priority remains integrating the airlines as well as we can,” Suzanne Rubin, president of the AAdvantage loyalty program, said of sticking with a miles-based plan.
American almost certainly is studying the moves by rivals, but decided “this is just too much to change all at once,” said Randy Petersen, editor of InsideFlyer magazine. “The advantage they have is that the revenue-based programs at Delta and United aren’t into play yet.”
To qualify for the elite executive platinum status in AAdvantage starting Jan. 1 a flier will need to have accrued 120 segments, up from 100 now, the Fort Worth, Texas-based carrier said in a statement today. That rank also can be earned based on qualifying miles or points. A segment is a one-way flight.
“It’s definitely a blow for those who qualify by segments,” Kelly said. “That stood out to me as almost unnecessary punishment for people that have to fly that much to begin with.”
The bulk of changes disclosed today affect Dividend Miles members, said Brian Karimzad, director of MileCards.com, a website that compares travel award credit cards. What American didn’t make clear today is whether it will retain fees charged by US Airways to redeem an award or to change the date of a reward ticket, he said.
American began allowing program members to earn and redeem miles on either airline in January, a month after the close of their merger.
Benefits for card-holding platinum members on US Airways and American include unlimited complimentary upgrades, free checked bags, priority in lines throughout the airport and bonuses for miles traveled. Under the new plan, fliers can join the elite club with 100,000 miles or points earned from purchases and 120 segments traveled.
Fewer than one-third of AAdvantage members reach executive platinum status through flying 100 segments, the airline said.
“This is consistent with the marketplace today, and where the US Airways program was until the combination,” Rubin said in explaining why American raised the segment portion. “As we bring these two networks together and introduce a lot of shorter-distance flights, we thought that change made absolute sense for the new program.”
Dividend Miles members used to getting automatic upgrades when available in all domestic markets will lose that benefit unless they become Executive Platinum in AAdvantage. Lower-level elite status will receive the free upgrades on flights of 500 miles or less, and will have to purchase or earn upgrades for longer flights.
Members of US Airways’ Dividend Miles plan will move into AAdvantage in the second quarter of 2015, one of the final steps before the programs are integrated. Dividend Miles’ four elite status levels will move into three AAdvantage elite categories with the shift.
Customers with an account in both programs that already have been linked will have their Dividend Miles elite-qualifying activity, award mileage balances and Million Miler balances moved into the existing AAdvantage account, the airline said. New AAdvantage accounts will be created for Dividend members who don’t already have one.
AAdvantage elite status through February 2016 will be based on combined elite-qualifying activity from 2014, the airline said. Year-to-date 2015 qualifying status will be combined to set status through February 2017.