American Airlines Loyalty Points program replaced Advantage earlier this year. Some data points have demonstrated its generosity, but is it too generous to stay as it is?
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Initially, I Didn’t Love Loyalty Points
I wasn’t shy that Loyalty Points put undue stress on flyers looking to earn American Airlines status actually flying the airline. At that time, I noted that a new American Airlines flyer would need to spend more than $27,000 on American Airlines tickets (excluding taxes and fees) to earn Executive Platinum status, the top tier for which requirements are published. In just the last few years, mileage and segment requirements shifted to spend, initially requiring $10,000 spent on airfare in the old Aadvanatage program to earn the status. In the last few years, Executive Platinum elite status qualification moved to a revenue requirement of $15,000 spent on airfare with a remaining segment requirement. To push that above $27,000 during the COVID lockdowns was an absurd notion.
Some might suggest I wouldn’t admit when I am wrong. Here it is, for everyone to see, I was wrong about Loyalty Points. To be clear, it’s not any easier than I stated for a new flyer to American and really for any flyer with American to earn status actually flying on the airline. No, I was right about that. I was wrong in my estimation of just how little the airline actually cares about whether customers fly the airline – they solely care about income which has been great news to those who have embraced the new system.
Truly Rewarding Spend
In a post I published a few months ago, I highlighted the lucrative opportunities to gain vast amounts of Loyalty Points – which now count toward status – for hotel stays with Rocket Miles. In some cases, a single $300 stay was enough to earn entry-level Gold status on American along with enough miles for a domestic roundtrip (usually.)
Some enthusiasts have been even more ambitious and posted that they received the airline’s elusive ConciergeKey status with very little flying activity but high levels of spending in the program. Boarding Area’s own, Gary Leff, was one such recipient. Matthew covered his reaction to seeing this news yesterday and I don’t really have more to add on that particular instance. Gary wasn’t alone, as he pointed out. Other members of AA Loyalty Points Facebook groups were also shocked but delighted to see that the same behavior was rewarded, though their spend seemed to be on a wider variety of participating outlets.
The notion that American Airlines would reward spending across the program so long as it benefits the bottom line is something I didn’t properly take into consideration. During an investor call in the past, one banker asked if the airline should spin off the frequent flyer program independent of the airline. Management said it felt the two needed each other to work properly together, but that highlights just how independent the loyalty program has become and what an important revenue source it is for the airline.
Frankly, the move makes a lot of sense. Rewarding customers who earn loyalty points that have a material effect on American’s bottom line is the most logical way to incentivize behavior. Award travel (redeemed from those points) is usually very inexpensive for the airline and allowing those who participate heavily with the program to earn elite qualifying miles in the program as a result of a non-flying transaction of value to American makes a lot of sense. It’s a very honest way to run a loyalty program without the illusion of being a successful, profitable airline.
I’ve personally considered making a run for Executive Platinum status this year and haven’t started the process because they seem so easy to obtain, why rush? I don’t have to fly American or even member oneworld airlines to be a Loyalty Points guy and hold high status within the program. End-of-the-year mileage runs on partner airlines be damned.
Increased Requirements Coming?
The question that remains in the back of my mind is whether American Airlines increases its requirements for status even higher to fend of swelling elite ranks at the top. Blame it on years of airlines (and hotel chains) changing the rules of the game to their favor – but if anything seems easy in this hobby, it usually goes away.
From a math perspective, there’s little reason to raise requirements. Customers are responding with lots of financial impact to the company, reducing the benefits of those transactions may disincentivize how active customers are.
However, if a number of true American Airlines elite travelers who fly on the carrier with regularity are outranked for program perks and crowded out by those exercising their elite choice rewards for international upgrade space, American will likely be forced to act.
I’ve focused a lot on the top of the program but the lower levels return even less for the airline in terms of revenue to achieve them. Recent offers from Motley Fool have paid over 9,000 Loyalty Points for a $99 transaction. New Verizon Business accounts offered as much as 14,000 (halfway to Gold) for a purchase that was even further reduced by American Express offers. I fear the lowest tiers will be the first to see hikes which scares off those that may be new to our hobby.
I was wrong about American Airlines Loyalty Points because I was still stuck thinking that it was an adaptation of the Aadvantage program. Unlike Aadvantage miles earned, which only counted toward redeemable miles, in the new program members earn points that can be used for redemption as well as status. There are trememndous ways to utilize the program, gain status, and nearly free travel for purchases customers may already intend to make. However, I fear that this will lead to an increase in the program requirements or a reduction in program benefits. I hope that I am wrong about this too.
What do you think? Have you embraced Loyalty Points? Do you think American will adjust the program following the overly generous approach?
The question is how many of these elites earning points primarily outside of flying are actually causing issues for elites? I’d assume the “credit card” (probably a better term out there but this gets the point across) elites fly less and that most of their flights are award tickets since they have so many miles. Unless they are EXP, there’s no ability to join the upgrade list on those award tickets. Priority lanes can be enlarged to accommodate more elites. When they do get on the upgrade list, there will likely be fewer total people on there as the flying elite numbers are likely going to decrease.
I imagine the coming recession will alleviate the “swollen ranks of elites” problem (if there really is one ).
AA pretty much purged its non-US elites with the new program since we have no access to an AA credit card and earn next to nothing in miles or points. Even flying domestic F does little to get close to even Gold. So, after decades being Platinum or ExecPlat, my AA flights now go to AS or BA accounts for both status (MVP and ExecClubGold) and redemptions.
For someone who also is international, the same goes for Aeroplan (you had lowered SQD amounts which were somewhat achievable) and MileagePlus (prior to 2020, MP was a solid program for non US residents), so they became general and not tied to a country. But hard to incentivize non US residents to sign up for these.
First AS joins One World & then AA makes it easy to earn partner status – especially getting to double dip for Jan, Feb & Mar. Kinda nice for us on the West Coast. At worst we get E+ seats & first access to the overhead bins. I don’t have any real data to back this up but the theory that these people that don’t fly to qualify really don’t fly that much to snag upgrades rings true from my experience. The upgrade lists are not crazy long & I have been able to snag a couple of upgrades to Biz.
I will re-qualify for Platinum Pro here in a couple of weeks & have stopped collecting LP’s via non flying activity. The opportunity cost of spend on AA cards & hotels through AA Hotels/Rocketmiles/AA shopping is too high to keep going since Platinum Pro gives One World Emerald.
If the likes of DL roll over status or lowers the bar, I’m guessing AA keeps it this easy. Otherwise, I can see some “refinements” to make it a little more difficult to qualify next spring.
@Sam. This has been an argument that many are using, “that they don’t fly much anyway so what does it matter.” However, as we have seen with the lounges this summer that is not necessarily true. I fully expect that AA will double or triple its elites for 2023. That has been my prediction and why I switched to UA in March after seeing this mess unfold. Sure, they don’t all actually travel all the time – every week. But imagine if just 10% do on peak days or 20% during peak summer travel…then we see exactly what has occurred at the lounges this summer with the end result being they piss everyone off, both Butt in Seat flyers and Rakutan Flyers (my new name for them). The end result being that by 2024 AA will see even more Butt in Seat loyalists jumping ship, leaving them with Rakutan Elites clogging the system and seldom ever buying last minute premium cabins like we have to at times.
Perhaps you’re correct.
I’m curious if its corrilated to the post mask demand. Everyone is traveling more on top of the folks that were already traveling anyway + folks that are only yearly summer vacationers. So a certain percentage of the “demand bump” in the lounge from credit cards & purchased status drop off due to recession fear, pent up demand waning & typical fall demand dropping? I’m just not entirely convinced it’s causation as opposed to coorilation.
I’m platinum and clear upgrades for work travel 50-75% of the time, I’d guess. Obviously depends on the route. Not sure what AA elites have to do with crowded lounges since having status doesn’t grant domestic lounge access. All of the stories with crowded lounged this summer have been related to Delta anyway.
@ Kyle, My reference to crowded lounges is comparing the similarities of offering access to so many via credit cards which has completely ballooned the crowds and made the previous more private atmosphere completely absurd. I am not sure which lounges you are accessing, or when, but it’s been far more than at Delta. AA in Charlotte has had epic wait lines as an example. Certain days in certain cities are also so packed that not a seat remains. It was never like that before.
This is exactly what AA will extend further by offering Elite, many of who will easily reach Exec Plat, to these same people purely on CC spending and shopping portals. That will now add God knows how many more (2x,3x) Elites in the system bogging down premium check-in lines, seat allocations, premium boarding and upgrades. You will not see this really take hold until spring/summer ’23 and then I am quite certain the experience will be something else. Like the lounges now, most everyone, many of who are not regular flyers, will have Elite.
I am surprised you are clearing upgrades at that pace with only Platinum. Did you mean Exec Plat? I was, prior to switching to UA in the spring, clearing maybe 75%, as Exec Plat and hardly ever on transcon or high volume elite flights like DFW-LAX. Regardless, if you are basic Platinum I bet next year you will barely ever see an upgrade. Even Mabel in Cedar Rapids will get regular Plat now with her weekly grocery shopping.
Understood. I just don’t think Mabel is flying enough to cause me any concerns. AA is happy of course because Mabel is giving them money without flying and thinking she is living the high life with her coveted status that she doesn’t even use like you or I would.
@Kyle. That’s what they said about lounges. Problem is that when you double or triple the numbers they don’t all have to fly like you or I. Just a percentage on peak days, holidays or during summer and it turns into a feeding frenzy…the very thing we gave our loyalty to be guarded from.
I don’t understand the in lounge argument in relation to status gained from LPs. AA elites don’t get lounge access on domestic itineraries unless they have a Admirals Club membership. The swelling of elites and lounges over capacity are separate issues.
Having said that, not a month goes by that Citi doesn’t send me an email asking me to upgrade my card. If I flew domestic on a regular basis I would definitely, but I tend to average less than 10 domestic flights a year, and those are usually on the ticket with my international flights.
@DavidK It’s not about the lounges directly. But the chaos of the lounges this year shows quite well how easily offering everything to the masses via a credit card, instead of rewarding for actual flying or requiring paid membership outside of a CC, will dilute the whole product. And that’s exactly what loyalty points is doing. “Be careful what you wish for” is what happened to the lounges. Elite status on AA is next. You will start to see the fallout next year just as we did the lounges over the past months.
I have One World Emerald through another airline.
Loyalty points are worth nothing to me. I had a number of paid 500 mile upgrades in my account that were essentially cancelled. Not acceptable. They need to be refunded since I paid for them. AA told me to pound sand.
Not always a fan but this was a great post, Kyle. I was completely baffled by your original post a few months as I saw right away that this was going to make Exec Plat the airline equivalent of Hilton Diamond, easy to get and pretty worthless. Glad to see you have come around to better seeing the repercussions.
To everyone else, if you want a preview of AA in the future, just look at the lounge situation this summer. That’s your destiny everything if you stay with AA.
AA is on the verge of filing BK (at least according to their latest financials). Why don’t they just file BK, give back the planes, cancel leases, terminate employees in their re-org and just become a bank? Credit card spend is clearly more important to them.
Airline operationally, they are a clown show IMO.
Quite frankly, this AA LT Plat is tired of flying them , especially after 2 cancellations, 2 involuntary overnites at their hubs (at my expense) and 3 flights delayed 4-5 hours all in the past two weeks, none of which were weather or ATC related.
Loyalty points are essentially worthless to me.
As a person who actually flew for a number of years with an eye toward renewing the annual status for the modest but appreciated benefits, I guess I’m a dinosaur or soon to be one … the whole loyalty points thing just seems silly and convoluted to me, potentially turning us all into chasers of cheap tricks and semi-scams with hotel bookings and whatnot.
How it could be argued to be too generous is lost on me. Just another slick trick with an amurican bidness trying to chase profit without providing much in return, and get away with whatever it can in trying to sell it as an “improvement.”
Then they sit back and see how much further they might be able to push it. Maybe some marketing dirtbag will even come up with a more obscene turn of phrase than “loyalty” under the circumstances.
The stuff some of these people are doing to get Loyalty Points is crazy. They are booking hotel rooms they will never use because the return is 35-40 times the spend in Loyalty Points.
Did they paid you to write this?
@FlyUAL – I wish. If you know someone over there who wants to send me a check, I’d happily accept.
Exec plat for a number of years here. This is the year I gave up on AA.
Now I buy my tickets with whatever airline has the cheapest 1st class seat on the most convenient time.
The ability to use miles for award flights is limited, you have to be willing to suffer through meaningless connections, red eyes, partners fuel surcharges, non existing system wide upgrade availability, and so on.
Used to be fun, there was some mutual loyalty, now I just don’t understand it anymore.
For all you butthurt elitists there is a thread on flyertalk about how delta kicked out a passenger from first class to economy because the first was oversold and the guy got only fare difference and some measly compensation.
The problem is the regulators and the politicians are easily bribed, the corporations are too strong and the passengers are untied and not united. Welcome to capitalism, where everyone is told to look out only for themselves and look what we have.
American has surely taken away the loyalty of flying only. Its all about the dollars! Points for travel later would not be too bad, but to allow those points to use for PRIORITY upgrades is not helping loyal flyers!
Hi Kyle – so wait, are you saying that spend that generates Loyalty Points outside of flying AA metal counts towards Concierge Key? I’m working on both airline and non-airline spend and have 335,000 Loyalty points. At what threshold do you think I’ll get it? Do I have to wait til the end of the year to find out? Looking for your advice. Have lots of flying and spending yet to do this year but also concurrently trying to earn GS status on United and that requires flying United planes and only airline spend.
I’m curious too. . .I’m up to 536K LP with several international and cross country trips still to come. No CK yet. 🙁
It is interesting to note that for Loyalty Choice Rewards you have to fly 30 segments and you have to dig to find that information What is even most interesting as far as I can tell AA does not track the segments you have earned. You have track them yourself. Why is that?
Hi Sally – I noticed this too. AA apparently tracks this behind the scenes which is weird because you’d think they would want to provide an easy way for travelers to anticipate meeting this milestone.
They do provide a way. It’s just poorly placed within the app. The segment count is located at the bottom of the promotions tab.
You do need 30 segments plus points for the Loyalty Choice Rewards. Interesting that you have to really look for those rewards and that AA does not keep track of the segments that you fly.
AA is inexplicably turning its back on passengers who fly a lot on high fares. If a passenger buys 10 JFK-LHR-JFK round-trips in business class (and nothing else), the passenger will easily get EXP on LP, but will get no Elite Rewards. Every prior year of the EXP program, this passenger would get Systemwides. Now, no longer. Why? Is this passenger worse? If the passenger doesn’t need to travel anywhere else — think executive who splits time between those cities, but doesn’t have needs elsewhere — why ask the passenger to do a segment run? Not well thought out.
Suggestion: If all 200k LPs are from flying, AA should waive the 30 segment rule for Elite Rewards.
Possibly, AA could consider the number of flight segments as a differentiating factor in allocating upgrades… I have easily hit the EXP LP requirements, BUT still need to achieve my 30 segments for the sometimes worthwhile Loyalty Choice Rewards.. A well planned Systemwide upgrade on an international overnight flight is actually worth it!
IF AA is keen on maintaining their relationship with their passengers, the number of segments flow is probably a decent way of identifying the regulars rather than the gamers.