Sunday, December 21, 2014

American sweetens premium flier awards to fend off Delta, United

American Airlines Group Inc. is sweetening frequent-flier awards for passengers buying the most-expensive tickets to fend off loyalty program changes made by its competitors.

During next year, AAdvantage or Dividend Miles program members who buy first- or business-class tickets will earn rewards based on the fare purchased, in addition to normal awards for distance flown and the member's elite status level, the airline said.

United Continental Holdings Inc. and Delta Air Lines Inc. next year will shift loyalty programs to base awards on fares purchased instead of the traditional miles flown. Those plans give the most benefit to fliers paying for the costliest tickets. American's one-year change lets the Fort Worth, Texas- based company continue to award discount-fare travelers as well as high-spending elite passengers, said Tim Winship, editor of

"It's the best of all possible worlds in a sense," Winship said in an interview. "That is in stark contrast to the way Delta's and United's programs are going to operate. American is getting the marketing effect of a revenue-based program without disenfranchising their lower-profit customers."

Delta's shift to the revenue-based system takes place on Jan. 1 and United's on March 1.

American's bonus plan announced today means a top-level loyalty program member on a flight between New York and Los Angeles could earn 12,000 additional miles on top of class-of- service and elite-status bonuses.

Merged Program

American plans next year to merge its loyalty plan with that of partner US Airways. That change is one of the biggest concerns for the most-frequent fliers, who don't want to lose benefits or their awards status. The program of the combined airlines is the largest, with about 100 million members.

"Consumers are going to have a very stark choice to make, to the extent their choice of carrier is driven by loyalty programs," said Winship, who is based in Los Angeles. "It's going to be interesting to see how it plays out."

American in October said it would make it harder for some of its most-loyal customers to reach top status starting Jan. 1 by increasing the number of required segments, or one-way flights. The rank also can be earned based on qualifying miles or points.

"Right now we're focused on integrating the two programs and providing the most benefit we can to our loyalty customers," said Casey Norton, an American spokesman. "It's integrate first, and then we'll innovate. This is something we wanted to do to reward our customers."

American's program follows changes announced by Alaska Airlines last month providing increased mileage bonuses to certain fare classes and elite Mileage Plan members.


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