American Airlines to Move to Revenue-Based Frequent-Flier Program
June 06 2016 - 12:50PM
Dow Jones News
American Airlines Group Inc. said Monday it will change its
frequent-flier program to award miles based on ticket price rather
than distance flown, becoming the largest carrier to shift its
loyalty program to favor bigger spenders.
The top U.S. airline by traffic said that its AAdvantage
program, which has about 100 million members, will make the change
on August 1. Starting then, customers who have no status in the
plan will receive 5 miles for each dollar spent on tickets,
excluding government taxes and fees. The number of miles awarded
will increase based on the passenger's elite status, with the lower
"gold" members receiving 7 miles to a dollar and top-tier
"executive platinum" fliers getting 11 miles per dollar spent.
American also said that effective Jan. 1, it will add minimum
annual spending levels fliers must meet to reach elite status the
following year. 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.
The outlines of the new AAdvantage elements closely mirror
changes already made to the loyalty programs of Delta Air Lines
Inc., the No. 2 carrier by traffic, and United Continental Holdings
Inc., No. 3. Other carriers including Southwest Airlines Co.,
JetBlue Airways Corp., and Virgin America Inc., also already have
moved to the so-called revenue model, intended to reward frequent
fliers who spend more money.
American, the result of the late 2013 merger of the old American
Airlines and US Airways Group, has been busy integrating its
operations and just over a year ago folded US Airways' loyalty plan
into AAdvantage. Now it is making good on its pledge late last year
to bring make bigger changes to the enlarged program.
One change it will also make in January is to add a new elite
tier, "Platinum Pro" between its Platinum and Executive Platinum
levels. Pro 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.
American said it hasn't made any changes to its redemption
options aside from some modifications made in March, and said it
still plans to show the award redemption requirements on its
website. While American was preparing to make the program changes,
it found itself uncompetitive with its largest rivals on the more
expensive tickets. So it has had a special mileage promotion in
place that will be phased out in August.
Changes to the program for customers who use co-branded American
credit cards to book travel are still under review, the company
said.
Write to Susan Carey at susan.carey@wsj.com
(END) Dow Jones Newswires
June 06, 2016 12:35 ET (16:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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