On Monday, American Airlines Group Inc. (NASDAQ: AAL) announced the company would change its frequent-flier program to a revenue-based program for customers who were awarded miles based on the ticket prices rather than flying distance, which will begin on August 1st. Roughly a hundred million members would be affected by the new changes, since the merge between American Airlines and US Airways Group in 2013, which contributed more members into its AAdvantage plan that greatly made American Airlines the top U.S. airline by traffic.
AAdvantage members will earn at least five award miles for every dollar spent on tickets, excluding government taxes and fees. The number of miles awarded will increase based on the passenger’s elite status; Elite customers will earn more, with Gold members earning 7 miles per dollar, Platinum 8 miles per dollar and Executive Platinum 11 miles per dollar.
Another two important changes according to American Airline’s announcement on Monday, include a new tier of elite status as well as a change in how elite frequent-flier members are ranked for upgrades. For both gold level fliers and platinum fliers, American Airline requires minimum annual spending for keeping the levels of fliers in the following year. To be a gold level flier, a customer will have to spend $3,000, along with flying 25,000 miles or flying 30 segments in a given year. A platinum flier will need to spend $6,000 and fly 50,000 miles or 60 segments, and so on. There are three levels for its members, which include Platinum, Platinum Pro and Executive Platinum. The new dollar thresholds range is from $3,000 to $12,000 per year.
Here’s a look at the changes announced Monday (cited from The Dallas Morning News):
Dollar-based award miles
American announced its plans to do away with the “fly a mile, earn a mile” model in favor of a dollars-spent system in November, but didn’t specify when the change would take place until Monday.
Starting Aug. 1, AAdvantage members will earn at least five award miles for every dollar spent on base fares and carrier-imposed fees.
The redemption ratio will increase based on a flier’s elite status — seven miles per dollar spent for gold status, eight miles per dollar for platinum level and 11 miles per dollar for executive platinum members.
Elite qualifying status
One of the biggest changes announced Monday is a new annual spending threshold needed to qualify for elite status along with the previous requirements for miles flown.
For instance, to achieve gold status, members will need to spend $3,000 on qualifying fares in addition to the 25,000 elite qualifying miles or 30 elite qualifying segments.
For platinum, the required amount to spend is $6,000 in addition to 50,000 qualifying miles, and for executive platinum, you’ll need to spend $12,000 along with the 100,000 qualifying miles flown.
American is also adding a new elite status level to its program starting in January 2017.
The platinum pro level requires 75,000 qualifying miles and a $9,000 spending threshold, situating it between the existing platinum and executive platinum levels.
Blaise-Shamai said the new level was added to help bridge the 50,000-mile gap between qualifying for platinum and executive platinum.
Platinum pro members will receive free auto-requested upgrades on eligible flights in North America and between the U.S. and Central America, two free checked bags and Sapphire status through the Oneworld alliance. They will earn nine award miles per dollar spent under the new accrual program that takes effect in August.