How AAdvantage Devaluations Will See Me Change My Tactics

---

TravelingForMiles.com may receive commission from card issuers. Some or all of the card offers that appear on TravelingForMiles.com are from advertisers and may impact how and where card products appear on the site. TravelingForMiles.com does not include all card companies or all available card offers.

Some links to products and travel providers on this website will earn Traveling For Miles a commission which helps contribute to the running of the site – I’m very grateful to anyone who uses these links but their use is entirely optional. The compensation does not impact how and where products appear on this site and does not impact reviews that are published.

From the moment that American Airlines announced that Executive Platinum members would only be receiving 4 systemwide upgrades (instead of 8) starting in 2017 I knew that the way I book my flights was probably going to have to change. That “probably” turned in to a “definitely” when I worked out just how badly I was going to be affected by the airline’s move to a revenue-based system for redeemable mileage accrual.

I started thinking about my plans for 2017 quite a few months ago but I haven’t been making any concrete plans until recently. I could say that the latest set of devaluations to AAdvantage were the final straw but, if I’m being honest, I had a reasonable idea what I’d be doing before American devalued lifetime Platinum status and introduced minimum spend requirements a couple of weeks ago.

How I’ve Booked Up Until Now

I mainly book long-haul flights and, up until now, I’ve had a very simple tactic: Book economy class fares on American Airlines for as cheap as possible and use systemwide upgrades to move from Economy Class into Business Class.

Somewhat incredibly, I’ve spent more hours in this Business Class seat than any other airline seat

For flights to destinations not served by American Airlines I’ve usually booked Business Class seats using AAdvantage Miles and, occasionally, I’ve booked a Business Class a fare when it’s been deeply discounted.

Why The Need To Change

Systemwide Upgrades

I don’t like the idea of traveling in Economy Class. 10-across cabins where seat width is just 17″ and seat pitch is just 31″ are absolutely not my idea of fun.

In the past I’ve been able to avoid Economy Class seating (mostly) by planning well in advance and by using my 8 systemwide upgrades sensibly and strategically. Yes, I’ve been seated in long-haul Economy Class a few times in the past few years but not on an overnight flight which is when it really counts.

With only 4 systemwide upgrades available per year, from 2017 onwards, buying discount Economy Class fares with the idea of upgrading them to Business Class won’t work for someone who travels as much as I do – especially if I’m traveling with Joanna – so I need to come up with a way to get around this issue.

American Airlines Economy Class – where hopes and dreams go to die

Even if I was to fly enough to earn more systemwide upgrades (you can earn up to 4 bonus systemwide upgrades – 2 for every 50,000 Elite Qualifying Miles (EQM) earned above 100,000) I’m not sure they would be too much use anyway:

American Airlines is introducing Premium Economy cabins to its international fleet from late 2016 and, although we don’t know for sure, it’s more than likely that systemwide upgrades will only upgrade to the next cabin of service – i.e you’ll have to pay for Premium Economy tickets if you want to upgrade to Business Class.

Redeemable Miles

I don’t like the idea of earning 50% fewer redeemable miles than I’ve earned in the past.

American’s move to a revenue-based mileage accrual system will be a killer for travelers like me and, when you factor in the already increased cost of award travel, earning AAdvantage miles through flights on American simply doesn’t make sense.

Minimum Spend Requirements

By the end of 2016 I will have spent approximately $8,000 on trips that will earn me AAdvantage Executive Platinum Status…..and that figure includes all the taxes and fees that come bundled up in the cost of flights.

From 2017 American Airlines will require flyers to spend a minimum of $12,000 if they want to reach Executive Platinum status (50% more than I’m spending this year to reach the same status level) and, to compound the issue, the airline will not be counting taxes and fees towards the minimum spend thresholds.

I don’t know what proportion of my $8,000 was made up of taxes and fees but I suspect it was at least $1,000 and I’m not overjoyed by the idea of having to pay American at least $5,000 more next year just to get a watered down version of the status I already have.

What I’m Going To Change

I’ve had a look at the other alliances out there (StarAlliance and SkyTeam) and have come to the conclusion that the oneworld alliance still suits my needs best…so I need to focus on how to maintain top-tier oneworld status without having to pay more than I have to and without having to change the frequency or nature of my trips too much..

For what I have in mind American Airlines Executive Platinum Status is still be the one I need to aim for….but I’ll be going about earning it in a different way to how I earn it now.

The Plan

• Focus bookings on deeply discounted Business Class fares
• Book trans-Atlantoic and trans-Pacific trips through American Airlines Partners, not American
• Save systemwide upgrades for routes on which discounted Business Class flights are hard to find and for flights on which they will clear at the time of booking.

Why?

• We’re seeing a lot of deeply discounted Business Class fares for travel on oneworld airlines – especially for travel originating in Europe (which suits me fine) – and I believe that these fares could be the key to securing top-tier status for as little outlay as possible while earning a lot of redeemable miles into the bargain.

• While we’re still waiting for American Airlines to tell us what earnings on partner airlines will look like, it’s still possible to make some educated guesses thanks to the sheep-like mentality of the Big 3 US airlines – American is unlikely to make partner earnings substantially worse than what flyers earn on Delta or United so the earnings these airlines offer can be used as a benchmark.

• To keep my spending as low as possible (while trying to meet EQM requirements) I’ll be sure to make sure I book some heavily discounted economy class fares (on flights without a Premium Economy cabin) to make use of my 4 systemwide upgrades. Because of how upgrades will be prioritized going forward I’ll only be booking flights where I can clear my upgrades at the time of booking – I’m not prepared to take my chances in the upgrade lottery.

Tools like ExpertFlyer are now even more indispensable in the hunt for upgrades that will clear at the time of booking

How I Expect It To Work

To earn American Airlines Executive Platinum Status in 2017 I will need:

• 100,000 Elite Qualifying Miles (EQM) and
• 12,000 Elite Qualifying Dollars (EQD)

As things stand, if I was to book discounted Business Class flights via American Airlines airlines and credit those flights to AAdvantage this is what I would earn:

• EQM: 2 EQM/mile flown
• EQD: Base Fare + Carrier fees
• Redeemable Miles (RDM): (Base Fare + Carrier fees) x 11

If I was to book discounted Business Class flights via British Airways/Iberia/Cathay/JAL (primary trans-Atlantic and trans-Pacific partners) and credit those flights to AAdvantage this is what I would earn:

• EQM: 1.5 EQM/mile flown
• EQD: unknown – but we know that it will be based on a percentage of miles flown
• RDM: 1.25 RDM/mile flown

Under this system, if I book a cheap Business Class fare, I would earn more EQM per mile flown by booking though American Airlines but I would lose out on RDM.

Take the recent West Coast to Europe fares as an example:

I’m going to ignore any AARP and Chase discounts I can get by booking on British Airways just so that this post is relevant to as many readers as possible.

The San Francisco to Rome Business Class fare cost $1,580 and was available on both American Airlines and British Airways. The Base fare + Carrier imposed fees came to $1,456 and the trip distance was 13,339 miles.

If I was to book a fare like this in 2017, and credit the flight to AAdvantage, this is how the earnings would break down

Book though American Airlines:

• EQM: 26,678 (distance flown x 2.0)
• RDM: 16,016 (base fare + carrier imposed fees x 11)
• EQD: $1,456

Book through British Airways:

• EQM: 20,008 (distance flown x 1.5)
• RDM: 30,013 (miles flown + 100% Executive Platinum Bonus + 25% cabin bonus)
• EQD: Unknown – but we know that it will be based on a percentage of miles flown

I don’t expect this to change significantly when American announces how we’ll earn miles on partner marketed flights in July.

Why?

Because American already offers worse partner earnings than United Airlines and I don’t see American making things even worse when compared to a primary competitor. If anything, the airline may make earnings a little bit better.

Let’s take a look how a fare like this could be parlayed into Executive Platinum Status:

If I was to book this fare 4 times through American Airlines I would hit my EQM target comfortably (106,712 EQM). But I would only earn $5,824 EQD and that’s still a long way short of the requirement.

I would need to spend a further $6,176 (excluding taxes and fees) before I would qualify for Executive Platinum Status. That would take my spending to well over $12,000.

Now let’s take a look at the figures if I was to:

(a) Book the exact same flights through British Airways and

(b) If American was to copy Delta’s percentages for EQD based on distance traveled – not a big stretch!

If I booked through British Airways I’d need to take 5 such flights before I crossed the EQM threshold for Executive Platinum status (100,040 EQM).

For flights taken on primary partner airlines Delta awards EQD at a rate of 25% of miles flown for the cheapest Business Class fares……

……so, as I’m sure we can all agree that British Airways is a primary partner of American Airlines, let’s apply that percentage here.

EQD earned by booking through British Airways (one trip): 3,335 EQD (13,339 x 25%)

In the five trips it would take to earn enough EQM to reach Executive Platinum status I would easily pass the EQD requirement: 5 x 3,335 = 16,657EQD

That means that I would have earned American Airlines Executive Platinum status at a cost of $7,900 (over 35% cheaper than if I’d booked through American).

Bear in mind what I said at the beginning of this calculation – I didn’t take into account AARP or Chase discounts that can be used on British Airways Business Class fares. Imagine how much cheaper those would make this!

Bottom Line

Flights between the West Coast and Europe are the ones I do the most so the example I’ve chosen is quite a good one for my situation.

I get to choose when I fly and where I fly to so it’s easy for me to book my trips around the numerous Business Class deals we’re seeing on a regular basis. And this tactic could work for me on a number of levels:

• I don’t have to worry about upgrades clearing – I’ll be flying in Business Class most of the time anyway.
• I don’t have to give up the great American Airlines 777-300 Business Class seat as I can always book American Airlines flights via British Airways – the best of both worlds
• By focusing my bookings on American’s partners I should be able to avoid spending $12,000 to attain a status I regularly achieve for under $9,000 and I’ll earn a lot more redeemable miles too.

I fully appreciate that the example I’ve worked with is, to a degree, an extreme….but I used it to highlight a very specific point: If you fly long haul trips (10,000+ miles) with any regularity there’s a very good chance you will do a lot better by booking through American’s partners rather than through American.

Going forward, Joanna and I will be booking a lot more trips based on which cities the fantastic Business Class fares are available to – This year I’ve already seen great fares to most of Asia, both coasts of the US as well as the Middle East so I don’t think we’re going to be too constrained with our travels.

Will we always get fares for sub $1,300? No, of course not…but we will be getting them for a lot less than American expects us to pay for Executive Platinum status….and that’s the important bit!

Once American Airlines actually announces what partner earnings will be I’ll update this post – it will be interesting to see if my assumptions were right or if I have to rethink my plans 🙂