American is rolling out a revenue requirement that will impose a certain cash amount for members to qualify for elite status in 2017.

What You Need to Know About American Airlines’ Loyalty Program Changes

American is rolling out a revenue requirement that will impose a certain cash amount for members to qualify for elite status in 2017.
American is rolling out a revenue requirement that will impose a certain cash amount for members to qualify for elite status in 2017.

American Airlines launched the first frequent flier program in 1981 and watched as every other major carrier moved quickly to follow suit. This was in the aftermath of airline deregulation, which introduced competition to the industry, and was well received by travelers who embraced loyalty programs. Over the years, airlines have continued to tweak their programs by charging fees for reward travel, adding expiration dates to miles, adding higher thresholds to earn elite status and raising requirements to redeem miles for award flights.

Here’s what you need to know about the latest changes to American’s AAdvantage loyalty program, and other frequent flier program changes on the horizon.

American’s Latest Loyalty Program Shift

Starting in August, American Airlines will be following Delta Air Lines’ move to tie miles (and elite status) earned to dollars spent. The miles you earn will be calculated against the base fare paid per flight ticket times a multiple based on your AAdvantage loyalty program status. Those with a high elite tier status who pay a high fare will see their mileage rewards, while those without elite status will see their accumulated miles drop well below their actual miles flown, the previous benchmark.

Do Airlines Need Loyalists?

With continual consolidation within the industry, major carriers don’t need the loyalty of infrequent, leisure travelers flying once or twice a year. The top legacy carriers – United Airlines, Delta Air Lines and American Airlines – aim to bolster loyalty from frequent business travelers to maximize revenue. For this reason, major airlines are adapting their programs to keep their business traveler clientele.

Despite the increased competition, and new flight routes, most U.S. markets are dominated by one or two major carriers. These airlines want to protect their most profitable customer base and use pricing, not rewards points or free upgrades, to drive leisure travelers. Meanwhile, smaller carriers don’t have the frequency or the network to get these travelers where they need to be in many cases. A strong loyalty program, and large network with high a frequency of flights, on the other hand, has an advantageous position to retain loyal business travelers. Therefore, the latest moves from American and Delta have zeroed in on their business travel clients who pay the highest prices and travel the most, rather than focusing on occasional, leisure travelers.

[via travel.usnews.com]

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