New York – American Airlines Group Inc on Tuesday said it will change its loyalty program in the second half of next year so customers earn frequent-flier miles based on the fares they pay rather than the distance they fly.
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The move, long anticipated by investors, makes it harder for travelers to attain elite status and benefits on American by booking flights on the cheap that log thousands of miles. It follows similar changes to the loyalty programs of Delta Air Lines Inc and United Continental Holdings Inc.
American had held off on the switch while integrating the loyalty program and reservations platform of subsidiary US Airways so customers and employees were not overwhelmed by change. The two companies merged in 2013 to form the world’s largest airline.
Frequent fliers will earn five award miles for every dollar spent on tickets, with elite members earning higher amounts.
American also said it was lowering the number of miles travelers needed for free flights to destinations in Latin America. Miles needed on some flights to Asia and Europe “will increase due to changes in market pricing and demand,” it said in a news release.
“It will be accretive to (American’s) bottom line as it’s a more efficient program and (it’s) harder to game the system,” Sterne Agee CRT analyst Adam Hackel said.
Shares fell more than 1 percent, although Hackel attributed this to jitters about demand for travel to France in light of attacks Friday in Paris that killed 129 people.
“This isn’t doomsday,” said travel writer Brian Kelly in a post on his website, ThePointsGuy.com. “There will be winners (people who spend more and fly on expensive tickets) and losers (economy-class international flyers).”
Frequent flyer programs are meant to reward frequent flyers that bring high revenue to the airline, it is just that simple! It is about enticing people to use that airline and even sometimes pay a higher fare if the cost is paid by an employer.
These programs were not designed to be used or abused by hordes of followers of Dan and others, flocking to travel on mistake fares and crying when they don’t get miles with the mistake fares.
Miles come in a big way from gaming the credit card offers also using them.
The best frequent flyer/loyalty program is EL Al and thus anyone flying to EY should fly EL Al. The elite level members of the Matmidim program get special benefits such as the ability to pre-order special meals prepared by caterers using only top of the line hashgachos rather than the pedestrian meals served in the main cabins with hashgachos that most frumme yidden would never rely upon.