A few days ago American Airlines announced it is switching to a revenue based loyalty program in 2017. American Airlines’ revenue based system is almost exactly the same as other airline loyalty programs. The Revenue Based program from American Airlines will require a combination of Elite Qualifying Miles and Elite Qualifying Dollars in order to qualify for certain levels of status.

Overall, the past two years have been very sad to AA loyalists. When I first set out to earn status with an airline, I chose American Airlines because it had the most lucrative frequent flyer program of any legacy carrier. Miles were all that mattered and in the eyes of American, a mile, was a mile, was a mile. What I mean by that is a mile flown was a mile earned. If you flew 100,000 miles in a calendar year, you would earn their top tier Executive Platinum status no matter how much you spent to earn it. Also, American awarded redeemable miles 1:1 and granted bonus miles for elites at a rate of 100% to Platinum and Executive Platinum members. It was by far the best loyalty program around. Last year, American announced several changes that many referred to as a devaluation. Now, redeemable miles are harder to earn and are based on the amount your ticket costed, but earning status remained unchanged. Now however, American delivered its final blow to their program by announcing a revenue based system.

I understand why an airline would switch to a revenue based system, its pretty obvious. Someone could do Mileage Runs at a rate of $0.05/Mile and earn Executive Platinum for just $6,000. In the process, assuming they were already an Executive Platinum member from the year before, they would earn 200,000 Redeemable miles (excluding any extra bonuses). With that, they could easily redeem the miles for a flight that would end up costing over the $5,000 they spent to earn the miles or they could use any of their Systemwide Upgrades to upgrade to a higher class of service while still paying dirt cheap economy fares. What this all means is, someone who only spent $6,000/year with the airline would be treated almost exactly as someone who spend 2 or 3 times that. American and every other carrier has figured out that this is not the MOST profitable way of doing business and put an end to it.

Today, members must spend $12,000/year PLUS fly the required 100,000 miles to earn Executive Platinum status AND priority is given based on the amount of money you’ve spent with the airline. Domestic upgrade lists are now based on who is spending more money with the airline! Again, I understand why American has made this decision, but it calls into question the reason I first decided to fly with American. I am sad to see American follow the crowd, but understand it is making the decision to please its shareholders, I just wonder if many AA loyalists will begin choose other airlines since all the loyalty programs are basically equal.

Advertisements