Revenue-Based AAdvantage Program Cleared For Takeoff

American Airlines says that it will switch from a mileage-based to a ticket-price model for its AAdvantage frequent flier program on Aug. 1 — a move it had indicated it would make late last year — with an added twist: there will be annual baseline spending levels to reach “elite status.”

“Effective Jan. 1,” Susan Carey writes for the Wall Street Journal, “to be a gold level flier, a customer will have to spend $3,000, along with flying 25,000 miles or flying 30 segments in a given year. A platinum flier will need to spend $6,000 and fly 50,000 miles or 60 segments, and so on.”

It is also adding a “Platinum Pro” tier between its Platinum and Executive Platinum levels, Carey reports, which “will require fliers to travel 75,000 miles or 90 segments and spend $9,000 on tickets. This tier will provide complimentary automatic upgrades on all eligible flights in North American, two free checked bags and pay 9 award miles per dollar spent.”

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Bridget Blaise-Shamai, American’s managing director of customer insights and loyalty, has this simple take on the program changes: “The more you spend in travel, the more benefits we will offer.” 

It’s really just joining the crowd. 

“The shift in awarding miles based on how much a customer spends for airfare instead of how many miles they travel follows similar changes at Delta Air Lines and United Airlines,” writes Andrea Ahles for the Fort Worth Star-Telegram. Both Delta and United also have instituted minimum-spending requirements in their frequent-flier programs.

But the AAdvantage has about 100 million members and is the industry’s largest, Bloomberg’s Mary Schlangenstein reports, writing that American “delayed the change … while it focused on integrating operations with merger partner US Airways” — a task that took a couple of years to complete.

But at Delta and United, frequent fliers “can skip most EQD [elite qualifying miles] requirements by spending $25,000 on their respective airline-branded credit cards,” Ben Mutzabaugh writes for USA Today. “(United exempts its top “1K” tier from the credit card waiver, meaning fliers must rack up the requisite $12,000 EQDs to earn that status.)”

When asked if something similar might be worked out for American’s co-branded credit cards, Blaise-Shamai said “something is under consideration,” Mutzabaugh reports.

Blaise-Shamai also said that the changes are a product of a lot of groundwork and contact with customers, Casey Smith reports for the Tulsa World. “This is done with a lot of work behind it, a lot of analysis from American and talking with our customers,” she said.

“Though many of American's millions of AAdvantage members may find the new requirements more onerous, they at least can't complain that they alone now must deal with a new reality in airline loyalty programs,” observes Lewis Lazare in Chicago Business Journal.

“The widespread shift to a fare-based airline loyalty program template in recent years has caused some frequent travelers to conclude it no longer pays to remain loyal to a single carrier and its program. Others, especially those who travel very frequently, have decided the loyalty program perks, such as they still are at the elite levels, are worth the changes they have seen in the various programs.”

In other news, American has signed ViaSat to provide speedier, satellite-based WiFi Internet capable of streaming video on 100 of its new Boeing 737 MAX planes schedule to take off in fall 2017. United, Virgin America and JetBlue, among others, currently use ViaSat to offer “an ‘at home’ Internet experience when in-flight.”

In addition, American’s current air-to-ground Internet provider Gogo Wireless “will be retrofitting 134 mainline aircraft … with its latest 2Ku system starting in 2017,” Conor Shine reports for the Dallas Morning News, leaving about 550 American domestic planes with the slower technology. Of those, 150 will be retired shortly and the others will eventually be upgraded to a faster technology, too.

“The Wi-Fi push is part of a broader $3 billion initiative by American to improve the passenger experience that also includes retrofitted planes, upgraded airport lounges and new in-flight entertainment offerings,” Shine writes.

“The change reflects larger trends in the industry, with airlines investing heavily to attract lucrative business class travelers,” writes Olivia Lowenberg for the Christian Science Monitor.

At least they’ll be able to plan their bonus-mileage getaways from road warriordom with more efficiency.

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