American Airlines Will Reward Fliers Based On Dollars, Not Miles
Follow CBSMIAMI.COM: Facebook | Twitter
DALLAS (CBSMiami/AP) — American Airlines will now base perks like free flights on how much passengers spend on tickets - not how many miles they fly.
The change, which matches those at Delta Air Lines and United Airlines, starts with flights on Aug. 1st and rewards American's highest-paying passengers.
Elite-status members of American's AAdvantage frequent-flier program will earn bonus miles for every dollar they spend.
American signaled late last year that changes were coming, but gave few details until Monday.
AAdvantage is the oldest and biggest major airline loyalty program, with about 100 million members. It started with easy math: Fly one mile, earn one mile.
Today that simplicity is a quaint throwback. Airlines compete fiercely for high-paying customers — they lavish elite travelers with upgraded cabins, lie-flat beds, better food and bigger frequent-flier rewards.
American said most members will earn five miles for every dollar they spend on base fares and carrier-imposed fees. That multiple rises to seven, eight or 11 for elites — gold, platinum and executive-platinum members.
Miles alone will no longer make you elite. Starting Jan. 1st, customers will have to hit annual mileage marks and spending minimums, including at least $3,000 for gold and $12,000 for executive-platinum. A fourth level will be added just below executive platinum.
"American is making it clear — if it wasn't already — the more you spend, the more love you get," said Brian Kelly, who runs a travel website called ThePointsGuy.com. He said it will be very difficult for most travelers to earn elite status on the major U.S. airlines.
After Delta and United announced that they would switch to spending-based rewards in 2015, American responded by giving bonuses to high-fare customers. American officials decided that the promotion wasn't a dramatic enough change.
But the overhaul of AAdvantage was pushed back last year as the company focused first on integrating American and US Airways following their merger in December 2013. "This was as quick as we could do it," said Bridget Blaise-Shamai, the company's managing director of loyalty.
American, however, denied that AAdvantage's traditional format was causing the airline to lose high-paying customers to rivals.
"If there had been significant book-away, you would have seen it in our revenue," said Casey Norton, spokesman for Fort Worth, Texas-based American Airlines Group Inc.
Besides Delta and United, spending-based rewards are now the rule at Southwest Airlines, JetBlue Airways and Virgin America.
(TM and © Copyright 2016 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2016 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
