Sweeping changes at American Airlines: Is the program more AAdvantageous than before?

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American Airlines announced sweeping changes to its AAdvantage loyalty program yesterday. CNBC claimed that “American Airlines will make it harder to earn frequent flyer status next year“, but that was a huge oversimplification. The truth is that elite benefits will be easier than ever to earn for folks who learn how to play the Loyalty Points game. Requirements for the lowest tier of elite status will increase, but other tiers won’t — and suddenly, even those of us who don’t fly American Airlines frequently will have the chance to play for meaningful elite perks like systemwide upgrades. Those who primarily earned elite status by flying won’t find much to like in these changes, but they up the fun factor for those of us chasing status for sport.

American Airlines Gold will require 40K Loyalty Points (up from 30K), all other elite levels remain the same

American Airlines Planes

The nugget of truth in the CNBC headline is that American Airlines Gold status, the lowest level of elite status offered by American, will require more Loyalty Points for those looking to qualify in 2023 and beyond. That change could really stink if you’re used to primarily earning Loyalty Points with paid flights since you’d need to pay for and fly an additional $2,000 in American Airlines flights at the standard 5x earnings rate in order to earn an additional 10,000 Loyalty Points (and basic economy earnings are going to drop to just 2 Loyalty Points per dollar spent).

However, there are several tiers of good news. First, you’ll earn a small benefit along the way to status. Once you reach 15,000 Loyalty Points, you’ll get Group 5 boarding (up one from general member boarding in Group 6) and the chance to choose between:

  • Priority check-in, security, and Group 4 boarding for one trip
  • 5 preferred seat coupons

Requirements to earn all other elite levels remain the same (though earning benefits that you might associate with those levels will change — more on that in a minute).

Offering choice benefits before reaching traditional elite status sounds an awful lot like what JetBlue just announced and I think this is a really smart play for American Airlines even if not terribly exciting. While 15K Loyalty Points isn’t much, neither is it insignificant and American is now offering a taste of what it’s like to have Gold status (which receives Group 4 boarding and preferred seat selection for free). Giving members a chance to choose which benefit is more meaningful is a good way to give them a reason to continue being loyal. Smart play, American.

For those of us playing the Loyalty Points game, the change from 30K to 40K Loyalty Points to earn Gold status isn’t a very big deal given that we’ve seen plenty of opportunities to earn miles cheaply through the AAdvantage eShopping portal and SimplyMiles and if you have an AAdvantage credit card you could use spend on that card to fill in the gap. The news is certainly a bummer for anyone accustomed to squeaking into Gold status, but for those who wouldn’t have even thought about earning status I think the choice benefit at 15K is nice and for those into the Loyalty Points Game, Gold likely wasn’t the goal anyway.

American Airlines elite status requirements and benefits

Beginning in 2023, you’ll need to earn 40K Loyalty Points for Gold status, but the number of Loyalty Points required for Platinum, Platinum Pro, and Executive Platinum will remain the same. As a reminder, here are those requirements:

  • Platinum status requires 75,000 Loyalty Points
  • Platinum Pro status requires 125,000 Loyalty Points
  • Executive Platinum status requires 200,000 Loyalty Point

Here are the benefits associated with each level of elite status that will remain when qualifying in 2023 and beyond:

Elite Benefits

AAdvantage elite status Gold Platinum Platinum Pro Executive Platinum
Loyalty Points Required 40K 75K 125K 200K
Mileage Bonus 40% 60% 80% 120%
Preferred Seating Y Y Y Y
Main Cabin Extra Seating Upgrade at Check In Y Y Y
Domestic First Class Upgrade 24 hour window 48 hour window 72 hour window 100 hour window
Upgrade on Alaska Airlines N N Y Y
Free checked bags 1 2 3 3
OneWorld Status Ruby: Access to biz class check-in, preferred seating Sapphire: Access to OneWorld Business Class lounges Emerald: Access to OneWorld First and Business Class lounges

Other benefits that you may historically associate with elite status are going to become “Loyalty Point Rewards”, a form of milestone benefits unlocked based on the number of Loyalty Points you accumulate.

Loyalty Point Rewards choice benefits now reward players, not flyers

Etihad guest Sweet Spots

If you have long earned American Airlines elite status the hard way, with many hours of butt-in-seat miles, please forgive me for being a bit excited about the changes announced to the AAdvantage program. As the saying goes, don’t hate the player, hate the game.

I say that because, while this year some of the aspirational benefits of American’s higher tiers of elite status were only accessible to those who earned the associated Loyalty Points and flew at least 30 segments on American Airlines, that requirement to fly segments on American will disappear for those qualifying in 2023 and beyond. You will no longer have to fly on an American Airlines plane at all to earn valuable benefits like systemwide upgrades. Unfortunately, neither will you receive those specific benefits by virtue of achieving status but rather by earning even more Loyalty Points. The good news is that there are going to be some potentially interesting benefits along the way.

American Airlines is introducing its own version of milestone rewards that they are calling Loyalty Point Rewards. Here are the various tiers:

Loyalty Rewards 2023 and onward:

Loyalty Points Earned Loyalty Point Rewards
15K Automatic Benefit: Group 5 Boarding Choose 1: • Priority privileges & Group 4 boarding for a trip • 5 Preferred seat coupons
40K Automatic Benefit: AAdvantage Gold Status
60K Automatic Benefits: • 20% Loyalty Point Bonus (AA Vacations, SimplyMiles, AAdvantage eShopping, AAdvantage Dining, and AA Hotels) • Avis Preferred Plus
75K Automatic Benefit: AAdvantage Platinum Status
100K Automatic Benefits: • 30% Loyalty Point Bonus (AA Vacations, SimplyMiles, AAdvantage eShopping, AAdvantage Dining, and AA Hotels) • Avis President's Club
125K Automatic Benefit: AAdvantage Platinum Pro Status
175K Choose 1: • 2 systemwide upgrades • 20K bonus AA miles (25K w/ AA credit card) • 6 Admirals Club One-Day Passes • $200 Trip Credit ($250 w/ AA credit card) • Carbon offset • $250 donation to select nonprofit organization • 15% award rebate • 2 gifts of AAdvantage Gold status • 35K AA miles towards a Mastercard Priceless Experience
200K Automatic Benefit: AAdvantage Executive Platinum Status
250K Choose 2: • 2 systemwide upgrades • 20K bonus AA miles (30K w/ AA credit card) • 6 Admirals Club One-Day Passes • $200 Trip Credit ($250 w/ AA credit card) • Carbon offset • $250 donation to select nonprofit organization • 2 gifts of AAdvantage Gold status • Bang & Olufsen product (requires 2 choices) • 1 Flagship lounge single visit pass (2 passes w/ AA credit card) • 35K AA miles towards a Mastercard Priceless Experience
400K Choose 2: • 1 systemwide upgrade • 25K bonus AA miles • Admirals Club membership (requires 2 choices) • $200 Trip Credit ($250 w/ AA credit card) • Carbon offset • Gift of AAdvantage Platinum status • Bang & Olufsen product (requires 2 choices) • 1 Flagship First Dining pass • 40K AA miles towards a Mastercard Priceless Experience
550K Choose 2: • 1 systemwide upgrade • 25K bonus AA miles • Admirals Club membership (requires 2 choices) • $200 Trip Credit ($250 w/ AA credit card) • Carbon offset • Gift of AAdvantage Platinum status • Bang & Olufsen product (requires 2 choices) • 2 Flagship lounge single visit passes • 1 Flagship First Dining pass • 40K AA miles towards a Mastercard Priceless Experience
750K Choose 2: • 1 systemwide upgrade • 25K bonus AA miles • Admirals Club membership (requires 2 choices) • $200 Trip Credit ($250 w/ AA credit card) • Carbon offset • Gift of AAdvantage Platinum status • Bang & Olufsen product (requires 2 choices) • 2 Flagship lounge single visit passes • 1 Flagship First Dining pass • 40K AA miles towards a Mastercard Priceless Experience
1M Choose 1: • 4 systemwide upgrades • Carbon offset • Gift of AAdvantage Platinum Pro status • Up to 100K miles back on award redemptions • 150K AA miles towards a Mastercard Priceless Experience
3M Choose 1: • 6 systemwide upgrades • Carbon offset • Gift of AAdvantage Executive Platinum status • Up to 300K miles back on award redemptions • 350K AA miles towards a Mastercard Priceless Experience
5M Choose 1: • 10 systemwide upgrades • Carbon offset • Gift of AAdvantage Executive Platinum status • Up to 500K miles back on award redemptions • 550K AA miles towards a Mastercard Priceless Experience

As you can see, American Airlines has completely separated benefits like systemwide upgrades from elite status and turned them into achievements for scoring more Loyalty Points. That will surely appeal to the gamers out there, but it does change the game in what is likely an unpleasant way for the old guard.

It isn’t entirely clear to me how some of those benefits will function in practice, but at a base level it will be possible to earn even more benefits without flying.

I’m particularly curious about a couple of the benefits in the list:

  • Loyalty Point bonus at AA Vacations, SimplyMiles, AAdvantage eShopping, AAdvantage Dining, and AA Hotels (a 20% bonus unlocked for 6 months at 60K Loyalty Points and a 30% bonus unlocked for 6 months at 100K Loyalty Points). Will this be an uncapped 20 or 30% on all earnings via those avenues? This could certainly make it easier to reach higher tiers of Loyalty Points. Greg pointed out that one of these bonuses could be particularly interesting if you earned it at the end of one loyalty year. Since this bonus lasts for six months, if you earned one of these benefits right at the end of a loyalty year, you could use the bonus earnings to jump start your path toward status in the new year.
  • 15% award rebate as a choice benefit option at 175K Loyalty Points. Remember that you only get one choice benefit when you reach 175K Loyalty Points. Most will likely gravitate toward systemwide upgrades. However, I wonder how the award rebate will work: will it only be valid for a single passenger? Will it work round trip or only one-way? Will it be one-time or for the remainder of the loyalty year? I could see this rebate being the most valuable choice depending on how it works (and obviously depending on whether you intend to redeem many American Airlines miles in that year).

Furthermore, I’m really curious about American’s decision to create listed benefits for those achieving levels like 1 million, 3 million, or 5 million Loyalty Points in a single year. Those numbers are obviously eye-popping quantities of Loyalty Points. Under ordinary circumstances, I would think that the only customers achieving that many points are corporate customers or large enough small businesses to be able to earn points based on a lot of spend. I would think that there would be so few people earning so many Loyalty Points in a year that it wouldn’t be worth creating and publishing those levels unless American expects to have customers reaching those levels. It would be wishful thinking on American’s part to think that there will be enough customers earning those points through paid airfares to make it worth publishing outlandish levels like 5mil LPs — again, unless American sees a path that will enable more folks to get there.

To me, this begs the question as to what kind of promotions they intend to put out via SimplyMiles and the shopping portal (or other avenues). Are they gearing up for the return of something like last year’s crazy 240x SimplyMiles promo? Every $4,166 donated to charity would have earned a million miles under that promotion. Unfortunately, that was before the days of Loyalty Points. Is the existence of these million-plus tiers an indication that something like that will come back and give us the opportunity to actually earn millions of Loyalty Points without millions in spend? Don’t misunderstand me: I don’t think we’ll see a return of 240 miles per dollar for donations to Conservation International in particular. I think that promotion worked out differently than intended and I don’t get the sense that Conservation International was interested in a repeat performance. But I do wonder what AA has up its sleeve that will make it possible for some to meet the higher tier requirements.

Upgrades to be based on rolling Loyalty Points earnings, basic economy earns fewer miles and points

Those hoping for a free upgrade should know that moving forward, upgrade priority will be based on your rolling 12-month Loyalty Points total. In other words, if two customers at the same status level are vying for an upgrade, the one who earned more Loyalty Points in the preceding 12 months will get priority. In other words, existing elite who earned their status based on the previous year will have somewhat of an advantage over new elites who did not earn Loyalty Points in the previous year.

The other key change coming is that basic economy fares will only earn two Loyalty Points per dollar spent rather than 5 beginning in 2023. That’s a huge devaluation for those who prefer Basic Economy. As my friend Ed Pizzarello of Pizza in Motion pointed out long ago, airlines appear to be trying to make a product that is so undesirable that nobody will buy it in their efforts at making Basic Economy less and less appealing. Gone are the days of flying long-distance cheap mileage run flights, but here to stay are the days of signing up for a trial subscription to Barron’s and the sort.

Does this make an AAdvantage credit card more interesting?

Don’t fall for the in-flight pitch, you can probably earn more redeemable miles online.

Up to this point, I have focused entirely on earning Loyalty Points through the AAdvantage eShopping portal and SimplyMiles. With the removal of the segment requirement to earn valuable choice benefits, I am more interested in those choice benefits than ever before. Would it make sense to get an American Airlines credit card to help give me a boost?

On this weekend’s podcast, you’ll hear Greg argue that he doesn’t see much benefit in the credit cards (beyond the obvious value of their welcome bonuses, which have little to do with earning Loyalty Points since the intro bonuses themselves do not count as Loyalty Points and neither do bonus categories). His lack of interest is because you’ll just earn 1 Loyalty Point per dollar spent on the cards available in the US. Since one could alternatively spend on a credit card that earns 2% cash back, Greg equated the choice to earn 1 American Airlines mile with paying $0.02 per mile (looks like I got through to him after all!). While I agree with him if you’re only valuing the airline miles earned, the Loyalty Points game adds an additional dimension. Not only are you earning 1 redeemable mile per dollar spent, but you are inching toward higher benefits with each dollar spent. Are those benefits “worth it”? Beauty will be in the eye of the beholder.

For instance, let’s imagine that you didn’t take advantage of any of the shopping portal shenanigans or SimplyMiles offers but rather you just spent $175,000 on an American Airlines credit card (which shouldn’t be hard for someone like Greg, who for several years spent $250K per year on Delta cards to maintain elite status). You would end up with 175,000 redeemable miles and also the benefits associated with the tiers in the chart above. You’d unlock the chance at 2 systemwide upgrades at 175K. While I think the 15% award rebate could be more valuable depending on how it works, let’s imagine that you’re confident that you’ll be able to use the systemwide upgrades to good value. Might it make sense to have spent $175K to get them?

To keep the math simple, let’s say that you value American Airlines miles at just 1c per mile, so your $175K in spend essentially generates 1% back in AA miles. If you get more than $1,750 in value out of the two systemwide upgrades (an additional 1% in value), you are perhaps “ahead” of a 2% cash back card (at least by some measure). Would I recommend taking 175K AA miles and 2 systemwide upgrades over the alternative ($3,500 cash if that spend were on a card that offers 2% cash back)? It wouldn’t be a clear “yes”, but neither would I be convinced that the answer is certainly no. If you intend to use those AA miles to fly Etihad apartments between London and Abu Dhabi for instance, which you could do round trip for one or one-way for two passengers and have miles left over and you are confident that you can use the upgrades to good value, maybe it isn’t totally insane. To be clear, I do think it would be crazy to spend $175K on an AA credit card rather than learning how to leverage the other parts of the Loyalty Points game, but from a value perspective I think someone could make an argument that I’d disagree with but respect.

More realistically though, some people will use an American Airlines credit card to fill in the gaps. For instance, if you would have earned the 125K Loyalty Points necessary for Platinum Pro status through your natural combination of the portal, SimplyMiles, flying, etc, but not the 175K points necessary for the higher-tier choice benefits, maybe it wouldn’t be nuts to consider spending $50K on an AA credit card (assuming you have the spend to support that). It becomes far less nutty as you get closer to a valuable tier with regular activity.

While I’m not excited by the opportunity to earn 1x airline miles or 1x Loyalty Points for credit card spend (or both as the case may be), I will certainly be more tempted to consider an American Airlines credit card if I anticipate needing to fill a gap. I’d certainly want to consider the timing of getting a card since any spend put toward the intro bonus spending requirement would yield 1 Loyalty Point per dollar spent (might as well earn those Loyalty Points when the points are meaningful). I don’t currently have an American Airlines credit card; the chance to pick up perks might convince me to want one.

Bottom line

American Airlines is clearly recognizing that its most profitable customers aren’t necessarily those flying in its airplanes but rather those creating the opportunity for them to sell more airline miles. Starting in 2023, those who play the Loyalty Points game well will be able to reap more reward than ever before thanks to the elimination of the requirement to fly 30 segments on American Airlines to get the most valuable benefits. Unfortunately for those who are used to earning status the old-fashioned way, elite status will have far less value than before. Still, on the whole, I think this makes American Airlines far more interesting to far more people and gets them to invest in caring about earning miles every day rather than only when they fly. I take these changes as a win while recognizing that for some they will be a sore spot. But compared to the old days of flying 200,000 butt-in-seat miles to get top-tier benefits, I’d argue that it is now easier than ever before for the casual traveler to earn the benefits typically associated with airline elite status. That’s what makes the Loyalty Points game fun — so game on.

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Heather

I’m wondering how this works from the prospective of family travel. If you travel with 2 adults , 2 kids, and one adult gets auto upgraded are you able to refuse the upgrade if you are not upgraded with the rest of the party? Then if so, I would assume both adults would need status since this only works with one companion. I’m wondering if you can make it worthwhile still in this situation. Any thoughts?

Oliver

Earning 2x on a Citi AA Business card at a gas station is not that bad! AA miles are worth at least one cent. I value AA miles relatively high. On the other hand, I would be giving up earning 4x at gas stations on my Amex Business Gold.

(Min value -> 4 points * $.011 Schwab = $.044)

Are 2 AA miles plus 1 loyalty point worth $.044? Would you buy 1 AA mile plus half loyalty point for $.022?

PS Despite the analysis above, I am slowly accumulating AA miles and loyalty points primarily via the AAdvantage shopping portal. I don’t have a way to purchase AA miles with a transferable currency.

Nun

I’m dreaming of a Conservation International Christmas!

I know there’s close to 0% chance it will happen but would love to know if any blogger reaches out to them this season.

J H

So has anyone else had this issue… on one flight it is doing the points calculation off of miles flown, and other times it’s doing it off of the fare. I have flow to Europe 7 times this year, and I have gotten as many as 30,000 points for a round trip and as few as 6,000 points. It makes no sense to me at all. And the funny thing is, the fare classes on those two examples were the same.

jerry

Car rentals with budget and Avis earn 2x-5x loyalty points. I paid $325 and received 975 loyalty points. 3x for holding an advantage platinum card with no status

Last edited 3 months ago by jerry
JoeSchmo

Great post. So when do we start the chatter again about getting LPs for miles earned via Bask?!

Christian

Hi Nick. You’ve mentioned systemwide upgrades a number of times in the article and the comments. I’ve hit the 350K mark in LP’s so I’m naturally wondering where to go on the choice awards, including SWU’s. Any gems of insight you can provide about how easy or hard it is to find upgrade space on intercontinental AA flights? The upgrades are the heavy hitters but if the fare bucket availability is crazy hard to find, they become pretty close to worthless, especially since you need a paid ticket to use them.

Alex

Wondering how getting rid of saver award space works for award booking. I’m sitting on a stack of British Airways Avios from a canceled trip that I prefer to use for direct AA flights, any thoughts on how that dynamic might change?

rj123456

The only thing left is for American Airlines Group to be renamed Aadvantage Inc.
The US Big 3 are green stamps that happen to run airlines.

A B

Another overlooked benefit is the new 20% loyalty point bonus for AA shopping, hotels, Simply Miles, etc. which comes at 60k LP. That kicks up to 30% when you hit 100k LP. That effectively lowers the number of LPs you need to earn for higher status. If the ONLY LPs you earned were through AA partner spend, this would mean you would need only 72.5 LP to Platinum (3.3% discount), 112,654 LP to Platinum Pro (9.9% discount), and 170,256 to Executive Platinum (14.9% discount). Someone check my math on this, but I think that’s right.

A B

Ugh. Shows me for speed reading.

brandon

what are the chances that this would also count towards doing surveys? from milesforopinions? Because i was surprised earlier this year when doing my surveys that I was earning loyalty points from it also?

JustSaying

I’d just prefer to drive my Tesla.

JustSaying

Who cares?

petersfo

I briefly looked into AA status based on the Hyatt status match promotion and the fact that I fly Alaska on the West Coast fairly frequently.

The issue with the AA loyalty program is that for the non-MS crowd, you’d have to concentrate entirely on their program to get anywhere even if you fly them regularly on non-business/first class fares.

There’s opportunity costs associated with using the AA portal vs. Capital One Shopping or Rakuten, same with using a AA branded credit card as neither offers the best value. At least for me, my whole loyalty game would have to revolve around AA to get me to Platinum Pro or beyond which would make the game extremely boring.

For the MS crowd, we’ll see how tolerant CITI and Barclay will be on MS on their cards.

jeph36

Absent from the list of Loyalty Point Bonus is RocketMiles. I have used that some to capture a bunch of LPs as the price usually seems to be marginally cheaper than AA Hotels. If it is actually excluded from the bonus list, I would probably switch to AA Hotels after nearing 60K.

Brian

I guess I just don’t understand why you guys are so interested in AA status. Is it really that valuable or are you chasing it “for sport?” Greg doesn’t even live in an AA hub.

Harry

100% agree and my home airport is DFW! P2 and good friend are lifetime Platinum. He 4 million miler and she 2 million. It means nothing. A good credit card gets the same only when traveling. Put your spend on transferable points. No airline is worth it IMO.

Christian

There’s an awful lot of YMMV. I live in Tennessee and frequently fly through CLT on American. The only viable alternative is Delta and their avalanche of devaluations over the past several years shows what they think of engaged loyalty members, so AA it is. I’ve gotten upgraded on about half of my short haul flights with AA and their network works for me.

AztravelGuy

The more an airline complicates their loyalty program, the less I care about loyalty. I’ll just earn and burn like always.

Geoff Stuart

Hey guys, I guess I just don’t get the Loyalty Points model. Basic newbie question: When you achieve these “Automatic Benefits” levels, do you pay for them with Loyalty Points or do your Loyalty Points really represent a status level, and just keep increasing forever? For example, if I achieve the 40K level and get AAdvantage Gold Status, does AA reduce my Loyalty Points balance by 40K points? How long do I get AAdvantage Gold Status? Just for a year or is this a forever thing? If it’s a spend-down model, can I decline the 15K AAdvantage Gold Status in favor of going onward to the one of the next levels? I would hate to get knocked back down from 15K to zero for the “privilege” of Group 4 boarding for one flight! (I never see anyone in that group anyway when I’m boarding in Group 5).

jeph36

You do not redeem LPs at each new level, in fact LPs are not redeemable at all. As I understand it, you increase you LP balance during the plan year (which will be Mar 1st thru end of Feb). Reaching the threshold will automatically make the benefits available to you (or in the case of “Choice” levels, I assume it will be an option in your account to select). For example, after reaching 15K LPs, your next AA flight should automatically put you in Group 5 boarding if you would have otherwise been in a lower boarding group. Then when a new plan year starts (the following March 1st), the LP-counter will reset to 0.

Once you achieve a status (e.g. reach 75K and achieve Platinum), you keep that status the remainder of the plan year and the following plan year. So when I hit Platinum in a few weeks, I will keep that for the remainder of this plan year thru Feb 28, 2023, and all of the next plan year (Mar 01, 2023, thru Feb 29, 2024).

Geoff Stuart

Thanks for the clarification!

Jan W

Hi NIck. I’ve been around since almost the beginning of FM, but I really appreciate that you took the time to write such a detailed explanation for a newbie. It’s always hard to be new at anything, and I appreciate FM’s way of helping everyone from the newbie to a true heavy hitter…

Geoff Stuart

Nick, I second Jan W’s comment. You and Greg and Tim (to mention just a few) are so responsive–no question is too dumb–and that’s why FM is the one and only site I recommend to relatives and friends.

I’m embarrassed to admit that Loyalty programs are nothing new to me. I’m Marriott Platinum, Hilton Diamond, and my wife is IHG Diamond. However, in the case of AA, I just never connected the dots to realize their program is the same concept, bc I’m so laser-focused on points. But why are they changing to a non-calendar accrual year? Just to screw with us, I guess.

BTW, we just came back from a trip to Jordan and Egypt and thanks to your post about the first-class policy at Qatar’s Al Safwa lounge, we flew CAI-DOH-PHL business class (but the CAI-DOH leg was in First), so we got the royal treatment at Al Safwa. Despite the World Cup frenzy, they gave us a 2-bed overnight room and even extended it two hours to match our departure time. Wife is now officially spoiled on Qatar service and refuses to fly anything other than QSuites. Had it not been for your post we would have suffered on BA all the way back to Philly, just like we suffered on the way over.

Greg The Frequent Miler

It’s an interesting question of why they’re moving away from calendar year accruals. When the March through Feb elite year was first announced, I thought it was a great idea. It can be really tough for those seeking airline elite status to take extra flights at the end of December when they realize that they’re close but not close enough to the level of status they want. Late December is just an awful time to be flying unnecessarily (plus prices are usually way up). But now that AA status can be most easily achieved through shopping, December is actually a great time of year to secure your remaining needed loyalty points!

So, ironically, I think that most other airlines would do well to move away from calendar year elite accrual, but I think that AA made a mistake in doing so!

That said, I think there are hints that AA may be taking baby steps in moving away altogether from fixed annual accruals. The fact that upgrade priority will be based on a rolling 12 months of Loyalty Point earnings is an example. Another is how they’ve set-up elite challenges to where you can keep status only by earning enough loyalty points every 4 months. They want their best customers to be great customers year around and not just in the last month or two of the elite year.

Lee

Here’s what the change was really about: higher Loyalty Point requirements (175k and 250k) to compensate for the elimination of the segment requirement. That’s it.

Since the current system took effect, I have had several conversations with AA’s executive liaison group. They had a blind spot. The segment requirement was actually penalizing AA’s highest revenue customers. They realized a change was necessary. But, they had to assess the monetary cost of eliminating the segment requirement and they had to balance that cost. The answer was to raise the level at which those benefits kicked in.

The new benefits at 15k, 60k, and 100k were add-ons without cost.

This was NOT about how to best screw their customers.

Lee

And, while it is really a revenue management issue and not an AAdvantage issue per se, I’ve pinged them about AA needing to clarify partner redemptions on AA given the elimination of Saver awards.

Last edited 3 months ago by Lee
Andrew

I remember a few years ago I got 8 system wide upgrades and executive platinum for 100k miles (had to do a mileage run to Hong Kong). The devalues have been so intense and honestly, for large trips I just book business or first class with points so I don’t need status. Unless you’re traveling weekly for work, it doesn’t make sense anymore to have status.

Geoff

Only flown business a handful of times. Have United silver. Something as simple as complimentary upgrade to priority seating in that extra leg room makes all the difference for me. I am just fine flying in premium economy for a 2-hour flight in the US.

I think some of the big spenders, wealthier people, MS ers get caught up in things at times. Not everything needs to be luxury all the way. That said I wouldn’t turn it down if somebody handed to me for free

Andy

The fact that they buried this sentence as the very last sentence of the email should terrify everyone:

Also in 2023, award travel on American will become fully dynamic with a new, simplified award chart.

Geoff

Are we going to get an update of where every one stands with the loyalty game this year?

Greg The Frequent Miler

I don’t know when we’ll do a post about it. Currently I’m sitting at only about 81K LPs. Plat Pro might not be in my near future unless some great deals appear. I’m not planning to push too hard to get there because really I don’t need Plat Pro

Anita

“but they up the fun factor for those of us chasing status for sport” Made my morning! That 30 segment requirement was in the way.

Theresa

So you only get 2 systemwide upgrades at 175k points? It’s frustrating to reach platinum pro at 125 but not get a system wide upgrade.

Theresa

Hi Nick. I do see your point. I am on the other side. I am someone who is spending on my AA cards to get status. I am almost to Platinum PRO.

So for 2022, right now, I still do need the 30 segments? That waived 30 segments doesn’t apply til 2023? So that’s March 1, 2023?

Thanks for all your great info always. Appreciate the Disney post too as I’m going next year for Christmas. Will get the Genie + for sure!

Theresa

Thank you for the clarification. I really wasn’t sure what I was doing when AA started all this. I kinda just wanted to see if it was possible. I hadn’t realized in the beginning about the 30 segments for 2022 until a couple of months ago. So 2023, game on!

DSK

Kind of odd the way it all lines up. So, if someone had a decent amount of credit card spend but not unlimited, he or she could either (a) buy AA Platinum Pro for $125K of credit card spend (minus loyalty points earned elsewhere), or (b) buy Hyatt Globalist for $140K of credit card spend (minus nights at Hyatt), or (c) ignore status and earn a lot more AA and Hyatt points by spending on other credit cards (such as Bilt on the first of the month for AA and Hyatt, or the whole Chase ecosystem for Hyatt). Interesting decision.

Nick C.

Thanks for the article. Will there be discussion on the whole dynamic award pricing model that AA says they’re going to move to? Will this dynamic model now apply to partner awards, say AA miles used to book Japan Airlines?

Tony

The opportunity cost is actually greater than 2 cents per dollar spent. There’re a number of credit cards (some without annual fees, or essentially without annual fees after various travel-related credits) that offers 2 points/miles per dollar spent. Even by the most conservative valuation, each of their points/miles is worth more than 1 penny.

Last edited 3 months ago by Tony
Greg The Frequent Miler

That’s true. 2 cents per dollar is just an easy comparison point for people to understand since there are several 2% cash back cards available.

Greg The Frequent Miler

Awesome post.

Regarding this comment “Greg equated the choice to earn 1 American Airlines mile with paying $0.02 per mile (looks like I got through to him after all!).” I just want to emphasize that there’s a difference between saying that using an AA card actually costs you 2 cents per mile vs. saying that it is “like” paying 2 cents per mile. I used to argue the former (see this post from 2011, just a few months after I started this blog: The Cost of Credit Card Points), but a post by Travel Is Free convinced me that rewards earned from credit card spend ARE free. That doesn’t change the fact that it is useful to look at the opportunity cost, in order to make good decisions. If your best alternative card earns 2% cash back, then the opportunity cost of earning 1 AA mile per dollar is 2 cents per dollar, but there’s no actual cost.

Tyler

Do you happen to have a link to the post by Travel is Free? I’d be interested in reading it.

Greg The Frequent Miler

I can’t find the one I remember, but the argument that convinced me (as I remember it), was something like this: Imagine you won a prize on a game show and you get a car. Obviously that car is free, right? Now suppose that you are given the choice between a car or $10,000. The car is still free, nothing has changed about that, but there’s an opportunity cost of $10,000. Now you have to choose which free prize to accept: the car or the money. To me, that’s the same with using a rewards credit card for spend. The rewards earned are free: they didn’t cost you anything (unless you are paying fees to manufacture spend, but that’s another story). You simply need to choose which rewards you want. For example: Do you want 1 AA mile + 1 Loyalty Point per dollar? Or do you want 2 Citi points per dollar?

Greg The Frequent Miler

By adding in the instant cash deposit I think you’re changing the analogy. Now I have $10,000 and I’m faced with an opportunity to buy a car for a great price. In that example, the car isn’t free because I’m explicitly buying it with the money I got for free.

With credit cards, it literally costs you nothing to choose to use a credit card instead of cash (with some rare exceptions like some gas stations). As long as you pay your cc bill in full each month, the rewards you earn are FREE. By capitalizing “free” I made my point inarguable (unless you reply with all caps, but don’t do that).

JTI

I’ve always gone with the valuing points more along the game show line – i.e. someone shows up at your door and has cash in one hand and points in the other…the value at which you choose the cash over points is the point value when earned by spend/sign up bonus etc. Just found a comment I made here a while back – https://frequentmiler.com/reasonable-redemption-values-a-work-in-progress/#comment-405767

P.S. You guys are really crushing it these days. I’ve followed since the initial perpetual point machine posts, and between the podcast and blog y’all are better than ever.

Nun

Im sorry but I think Nick gets the A in microeconomics. :-). I totally agree that earned points are equivalent to a cash deposit at some floor value which you then exchange for something else like an award (car). Yes “it literally costs nothing” to earn but that’s true in both cases. Maybe I’m missing something?

Last edited 3 months ago by Nun
Greg The Frequent Miler

I think that the only difference between Nick and my position is semantics. He thinks that the opportunity cost is an actual cost where I see it as a useful tool for making decisions. Either way we make the same comparison in order to decide how to proceed.

JTI

In your example, you actually get the cash then have a decision as to whether to change for the car. I most point earning scenarios, it does not happen that way. You have to decide ahead of time which method to choose and then can’t switch back. True, the opportunity cost is the $10k, but that is not the same as a cost. To think of it another way…if you earn an hourly wage and can work as much as you want, you could theoretically work 168 hours a week. If you only work 40, does it cost you 128 hours*your rate to take those hours off or is that just the lost opportunity cost?