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American to switch next year to fares-paid-based rewards program
Shar
LINDA LOYD, INQUIRER STAFF WRITER
LAST UPDATED: Tuesday, November 17, 2015, 3:25 PM
POSTED: Tuesday, November 17, 2015, 2:14 PM
image: http://media.philly.com/designimages/partnerIcon-Inquirer-2014.jpg
American Airlines announced Tuesday that starting in the second half of next year it will no longer reward miles for travel based on distance flown, but rather on dollars spent in fares.
That will hurt leisure travelers who fly long distances on bargain fares, in contrast to business travelers, who often book expensive last-minute tickets. Revenue-based travel-rewards programs favor passengers who spend the most with an airline.
American, which combined its frequent-flier program with merger partner US Airways, initially continued to credit miles rather than fares. That is changing, and the new program will resemble what Delta, United, and Southwest airlines already do.
American AAdvantage members will receive five miles for every U.S. dollar spent. Gold members (25,000 miles flown annually) will receive seven miles, platinum members (50,000 miles) will receive eight miles, and executive platinum members (100,000 miles) will receive 11 miles per dollar spent, American said.
The carrier said it was changing its loyalty program after "studying the combined customer base" with US Airways and "the competitive marketplace," said Suzanne Rubin, president of the frequent-flier program. "Some of the details are yet to be determined as far as exact dates" the new award-mile earning structure will take effect, she said."These changes in general will mean less value for consumers," said Brian Kelly, founder of ThePointsGuy.com, a blog and website for maximizing frequent-flier and credit-card points.
Here's how it will work: If you buy a $500 flight, you will get 2,500 miles even if it's a 200-mile trip.
"On the flip side, if you buy an $800 ticket to Asia, you are only going to get 4,000 miles versus 20,000 in the old program," Kelly said. "They basically adopted Delta's and United's earning structure."
Customers flying long distances on cheap fares will earn "many fewer miles than in the old program," he said. "Conversely, if you are flying on short-haul, super-expensive flights like Philadelphia to Manchester, N.H. - $1,000 last-minute because it's a business trip - you'll earn tons more miles."
Some award-redemption levels will be reduced by as much as 40 percent, and awards can be used any day with no blackout dates, American said. For tickets booked on or after March 22, award-redemption levels to popular destinations in Mexico, the Caribbean, and Central America will be reduced, the airline said.
MileSAAver awards for flights 500 miles or less in the United States and Canada will be redeemable for as low as 7,500 miles one-way, the airline said. Award-redemption levels on other routes, such as some flights to Europe and Asia, will increase.
"Bottom line, if you are buying super-cheap tickets you are going to earn fewer miles," Kelly said. "This system is designed to take away from those who buy cheap tickets and give to those who buy expensive tickets."
Travelers can book in the current awards system until March 22.
"My tip to consumers is don't sit on miles," Kelly said. "Redeem them now for flights later because after March they will be less valuable."
American transports 76 percent of fliers in Philadelphia.
Read more at http://www.philly.com/philly/busine...ased_rewards_program.html#W9WWJzePrvuwe3bJ.99
Shar
LINDA LOYD, INQUIRER STAFF WRITER
LAST UPDATED: Tuesday, November 17, 2015, 3:25 PM
POSTED: Tuesday, November 17, 2015, 2:14 PM
image: http://media.philly.com/designimages/partnerIcon-Inquirer-2014.jpg
American Airlines announced Tuesday that starting in the second half of next year it will no longer reward miles for travel based on distance flown, but rather on dollars spent in fares.
That will hurt leisure travelers who fly long distances on bargain fares, in contrast to business travelers, who often book expensive last-minute tickets. Revenue-based travel-rewards programs favor passengers who spend the most with an airline.
American, which combined its frequent-flier program with merger partner US Airways, initially continued to credit miles rather than fares. That is changing, and the new program will resemble what Delta, United, and Southwest airlines already do.
American AAdvantage members will receive five miles for every U.S. dollar spent. Gold members (25,000 miles flown annually) will receive seven miles, platinum members (50,000 miles) will receive eight miles, and executive platinum members (100,000 miles) will receive 11 miles per dollar spent, American said.
The carrier said it was changing its loyalty program after "studying the combined customer base" with US Airways and "the competitive marketplace," said Suzanne Rubin, president of the frequent-flier program. "Some of the details are yet to be determined as far as exact dates" the new award-mile earning structure will take effect, she said."These changes in general will mean less value for consumers," said Brian Kelly, founder of ThePointsGuy.com, a blog and website for maximizing frequent-flier and credit-card points.
Here's how it will work: If you buy a $500 flight, you will get 2,500 miles even if it's a 200-mile trip.
"On the flip side, if you buy an $800 ticket to Asia, you are only going to get 4,000 miles versus 20,000 in the old program," Kelly said. "They basically adopted Delta's and United's earning structure."
Customers flying long distances on cheap fares will earn "many fewer miles than in the old program," he said. "Conversely, if you are flying on short-haul, super-expensive flights like Philadelphia to Manchester, N.H. - $1,000 last-minute because it's a business trip - you'll earn tons more miles."
Some award-redemption levels will be reduced by as much as 40 percent, and awards can be used any day with no blackout dates, American said. For tickets booked on or after March 22, award-redemption levels to popular destinations in Mexico, the Caribbean, and Central America will be reduced, the airline said.
MileSAAver awards for flights 500 miles or less in the United States and Canada will be redeemable for as low as 7,500 miles one-way, the airline said. Award-redemption levels on other routes, such as some flights to Europe and Asia, will increase.
"Bottom line, if you are buying super-cheap tickets you are going to earn fewer miles," Kelly said. "This system is designed to take away from those who buy cheap tickets and give to those who buy expensive tickets."
Travelers can book in the current awards system until March 22.
"My tip to consumers is don't sit on miles," Kelly said. "Redeem them now for flights later because after March they will be less valuable."
American transports 76 percent of fliers in Philadelphia.
Read more at http://www.philly.com/philly/busine...ased_rewards_program.html#W9WWJzePrvuwe3bJ.99
