HUGE AAdvantage Changes Coming in 2016: Devaluations to Both Earning & Redemptions & More Negatives Too!

Huge AAdvantage Changes – What You Need to Know

American Airlines has announced significant changes coming to AAdvantage in 2016. They are changing several aspects of the program including elite status qualification, mileage earning and the redemption rates on their award chart. Let’s look at all of the changes.

Elite Qualification

As of January 1, 2016 American Airlines is eliminating EQPs. This move is either good or bad depending on how you look at it. By eliminating EQPs, they are making it significantly easier to qualify for elite status. Under the new rules elites will be able to qualify with EQMs or by segments as shown above.

New EQM earning rates

As part of these changes they have increased the number of EQMs you earn. Here are the new EQM earning rates:

• 3 EQMs/mile – Full-fare First or Business
• 2 EQMs/mile – Discount First or Business
• 1.5 EQMs/mile – Full-fare Main Cabin
• 1 EQM/mile – Discount Main Cabin

Less 500 Mile Upgrade Stickers & More Expensive

Gold & Platinum members will now earn four 500-mile upgrades for every 12,500 EQMs instead of the current 10,000 EQMs. This is to compensate for the new EQM earning rates. Also, the cost to purchase 500 mile upgrades will increase to $40. If you want to buy 500 mile upgrades with miles, the cost will be 40,000 miles for 8.

Systemwide Upgrades

Instead of the current 8 systemwide upgrades that Executive Platinum members receive, starting in 2016 American will only issue 4. Executive Platinum members can then earn an additional 4 SWUs for earning more EQMs over and above what it takes to qualify.

Elite Status Expiration

Starting in 2017, elite status will expire on January 31 instead of at the end of February. Basically, those who don’t requalify will have one less (albeit short) month of elite status than before.

Mileage Earning

Beginning in the second half of 2016 American Airlines will copy Delta & United on the earning side with a revenue based model. Miles will be earned based on what you pay for your ticket excluding taxes. Here are the new earning rates:

• 5 miles/U.S. dollar – AAdvantage member
• 7 miles/U.S. dollar – Gold
• 8 miles/U.S. dollar – Platinum
• 11 miles/U.S. dollar – Executive Platinum

Yup! Pretty terrible. To put it in perspective, I just got back from Panama on my mileage run for the Elite Fast Track. For my most recent trip I earned 30,000 miles. Under the new system I would earn less than 6,000. This will of course favor people who spend big money on tickets and not mileage runners or those looking for a good deal.

Bonus Extended Until Changes

One sliver of good news is that the bonus for flying in first or business class that has been running for 2015 will be extended until these new changes go into effect in the second half of 2016. So we can still earn additional miles for a short time which will be good for those who booked the discount British Airways tickets.

Mileage Redemption

I am going to say it. American has GUTTED their first class award chart and made some significant increases in certain areas for business class redemptions. For the most part, economy awards will see small increases, but nothing substantial.

Here is a link to the new American award chart and new partner award chart. There is a lot to break down and I’ll do some analysis below, but I think Gary at View from the Wing has the best comparison of old and new rates for travel to/from the lower 48. He clearly got this information ahead of time and was able to create comparison charts.

First Class Butchery

As part of the award chart changes, American has significantly increased first class awards. For example, currently it costs 67,500 each way in first class on Cathay Pacific to Hong Kong (Asia 2). Under the new chart it will be 110,000 miles each way! That is by far the biggest increase for international first class, but South Pacific first class goes up from 72,500 to 110,000 and Europe increases from 62,500 to 85,000. Here is a full list of old and new rates:

First Class from Contiguous 48 U.S. States to:

• Contiguous 48 U.S. States: 32,500 to 50,000
• Canada & Alaska: 32,500 to 55,000
• Hawaii: 47,500 to 65,000
• Caribbean: 40,000 to 50,000
• Mexico: 40,000 to 50,000
• South America 1: 40,000 to 55,000
• South America 2: 62,500 to 85,000
• Europe: 62,500 to 85,000
• Middle East: 90,000 to 115,000
• Africa: 100,000 to 120,000
• Asia 1: 62,500 to 80,000
• Asia 2: 67,500 to 110,000
• South Pacific: 72,500 to 110,000

As you may have noticed, three cabin first class has increased from 32,500 to 50,000 within the United States. This means that the first class cabin on the A321T aircraft from LAX/SFO-JFK will increase in cost by 54%. Big changes!

Analysis

So a lot of this was expected and isn’t a huge surprise. We knew things like 67,500 to Hong Kong on Cathay First Class would go up since that rate was too cheap. But 110,000 for the same award? Come on. That is terrible. Thankfully economy awards remain largely the same which means families should be the least impacted if they fly in coach.

The reason these changes hurt so much is because at the same time they are raising the redemption rates, they are decreasing earning rates for the vast majority of customers. This means that this new award chart is more expensive than it looks, because we haven’t fully adjusted our thought processes to earning at such a lower level. This will hurt more than it seems.

Basically, miles will become more scarce (at least for those who earn them through flying) and costs will increase. On the flip side many more people will be joining the elite ranks and sucking up upgrade space. This combination will significantly impact the American Airlines customer experience in my opinion. For those who don’t care about miles, then this won’t matter, but for those who are loyal to American because of AAdvantage, this is not a good thing.

The truth is Delta is a better airline. American had a chance to differentiate themselves from the other two big airlines and they didn’t. If the earning and redemptions are similar, I will fly Delta almost 100% of the time. Their employees are friendlier and their planes (the newer ones) are more comfortable generally. American loses out here I think.

One Small Advantage?

Perhaps the best thing about this is that less miles will be earned by the vast majority of people which may mean that we will see increased award availability. Again, economy fliers will benefit most from that since their redemption rates won’t go up too much.

The Manufactured Spending Angle?

I won’t go into this too much today, but costs only go up for you personally if you can’t earn more miles. If for example you can easily generate more AAdvantage miles then this may be an inconvenience, but you can still achieve your goals. Some big MSers might like this since they will have less competition for the best awards. I’m not sure I really buy that last sentence, but I’ll say it anyway.

Conclusion

This is terrible news and none of it is surprising to me. I mentally underestimated how much some first class awards would increase, but the majority of the rest of these changes were leaked ahead of time. As of Sunday I am an Executive Platinum and will live with these changes for the next year, but to be honest I am only as loyal as the airline is. When I see a brighter pasture ahead, I’ll dump AAdvantage and move on.

Disclosure: Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.

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