Apparently loyalty now has a price
In a move that will likely kill the program, American Airlines joins Delta in announcing changes to the frequent-flier program. Changes included new fees and higher mileage requirements for upgrades and free tickets.
American’s steps, which take effect Oct. 1, came a week after Delta revised its frequent-flier program, including the addition of a three-tier system for travel using awards.
The move by American means the industry’s first- and third-largest carriers have added fees or revised their frequent-flier programs. American did not announce the steps, but informed members of its AAdvantage program of the changes in an e-mail message. It also posted a new fee and mileage schedule on its Web site, aa.com.
“The disparity between discount and premium-class fares is too great to be offset by miles alone,” an American spokeswoman, Marcy Letourneau, said. Shares of AMR, American’s parent, fell 5.75 percent, to $10.33.
American’s program, which celebrated its 25th anniversary in May, is one of the most closely watched. Last year, more than 2.6 million people claimed free tickets on the airline, while 843,000 received upgrades under the AAdvantage program, which has more than 60 million members.
Like other airlines, American is struggling in the face of high prices for jet fuel. It lost $1.16 billion in the second quarter, and has announced cost-cutting moves that included grounding older aircraft and eliminating jobs.
“The increase in fuel has an impact on everything we do right now,” Ms. Letourneau said. She declined to predict whether the changes would reduce the number of awards issued, but said that “we anticipate that they’ll continue to use the program.”
Beginning Oct. 1, a one-way upgrade from a discounted coach seat on American will cost $50, plus 15,000 miles.
Previously, American required 15,000 miles each way, but did not charge a fee. A round-trip upgrade will now require a $100 fee, plus 30,000 miles.
The airline said passengers traveling to many destinations in Central America and some countries in Latin America will pay 15,000 miles, plus fees of up to $150 each way, for upgraded tickets.
Previously, American charged 12,500 miles but no fee on upgrades to destinations including countries in Central America, as well as Colombia, Ecuador, Peru and Venezuela.
Flights to several other overseas destinations will require a $350 fee each way, plus 25,000 miles. These places include Argentina, Bolivia, Brazil, Chile and Uruguay, as well as Japan, Europe and China. American will charge 40,000 miles to India as well as a $350 one-way upgrade fee.
Previously, American required 25,000 miles and a $300 fee each way to all those countries, and 40,000 plus $300 to India.
The fees – which the airline called co-payments – are nonrefundable in case a trip is canceled.
American also raised the number of miles required for upgrading full coach tickets to many destinations. The 5,000-mileage requirement for travel within the United States remained in place, but American said it would charge 8,000 miles for upgrades on full coach tickets to the Caribbean, Hawaii, Central America and Colombia, Ecuador, Peru and Venezuela, up from 7,000 miles.
Full coach tickets to other South American countries and Europe will require 15,000 miles for an upgrade, compared with 10,000 miles now.
Beyond the charges for upgrades, American made a series of changes to its free ticket awards. Economy-class tickets within the United States will remain at 25,000 miles for advance bookings and 50,000 miles for last-minute bookings. The requirements are for round-trip tickets.
But American raised the number of miles needed for a business-class flight to 50,000 in advance, 100,000 at the last minute. The requirement had been 45,000 and 90,000 miles. First-class tickets will require 65,000 to 130,000 miles, from 60,000 and 120,000 miles.
Last-minute coach bookings to Europe using award tickets will require 120,000 miles, up from 100,000, while bookings in business class will require 100,000 to 200,000, up from 90,000 to 180,000 miles.
Via NY Times