thatmikereed

So I ran some numbers to plan for next year. I'm a hybrid AS/AA flyer, often flying on the cheapest economy fare (non-basic) on either carrier (business travel), with some personal thrown in. Because I'm on bottom-half economy fares, it's a significant loss to credit flights to anyone other than the operating carrier (25-50% vs. 100%).

If I assume I'm Gold on AA and MVP on Alaska (both OW Ruby), and a typical flight on AS might be AUS-LAX-AUS @ $176 fare, even if could buy and fly the same fare on AA then AS is the much better program choice for me.

Buying AS, crediting to AS: 2476 EQM, 13% of the way to re-qualifying MVP. I need 8 of these round trips to re-qual.
Buying AA, crediting to AA: 1239 LP, 4% of the way to re-qualifying Gold. I need 25 of these round trips to re-qual.

I literally earn three times as much, status-wise, by buying, flying and crediting to AS. Where those routes overlap, AS spend/metal/credit becomes the obvious choice.

olouie

AA is moving towards really rewarding large CC spenders. You can hit EXP (OWE) just by spending $200,000 on their CCs. In turn that will get you upgrade priority just behind AS 100K members when flying AS. Kind of nuts but a lot of people who own businesses are about to get top tier status very easily.

thatmikereed

Agreed. Assuming I get lifetime gold on AA, chasing $75,000 of spend for Platinum doesn't make any sense vs. the CSR points and/or 2% cash back I can earn elsewhere. Even though my example differs, I'm going to hit 75K this year and will easily re-qual MVP Gold the year after... maybe even 75K all over again.

garykung

First, AA always has a thing about credit card. So today's news isn't that much surprise.

OTOH - the big question remains - how long can AS resist from switching to rev basis?

jsguyrus

It appears the new AA "Loyalty" program is simply a dollars/spend program with a requirement to fly a few segments. It deprioritizes actually flying and prioritizes spending on the credit card and their other purchase programs. Pretty much as far as the loyalty program American in a credit card company that also has a few airplanes. If AS ever went this way that would be the end of me even attempting to maintain elite status and I would just fly whoever works best, and if I want F I will just pay for it.

I expect AS will pick up a number of elites with this change.

eponymous_coward

It’s been pointed out that AA in recent years doesn’t make money on flight operations; it’s the mileage program that makes the profit.

This isn’t true for AS- they’re still an LCC that uses operational cost control to help with making profits. This often makes the FT crowd gnash their teeth (“Why don’t you have lie-flats on NYC-California! Ugh!”) but they’ve stayed out of Chapter 11, unlike the big boys.

To a certain extent their award chart already HAS costs for redeemers baked in that are “revenue based”. Award tickets on AS metal could be anywhere from 5k to 80k miles. Some partners like EI and QR have “anytime” pricing that’s more expensive than saver prices.

If you’re asking “why don’t they turn MP earning into a revenue based plan”… they could have easily made VX Elevate the surviving loyalty plan from the merger. They didn’t. Presumably they had numbers to back up their decision. Would have been an easy sell to Wall Street given that is where DL/AA/UA all live. I note that WN seems to be doing fine with A-List not being some arbitrary number of dollars spent on WN though.

xliioper

The model isn't actually too far removed from DL Reserve Amex cards with MQM Boosts (except AA lets you do it with any AA card and it's incremental). You can earn Plat status on DL this year via MQM Boosts by simply spending $120K on an Amex Reserve card (4 x 18,750 = 75K MQM's). Which is equivalent of AA Plat Pro which can be earned by spending $125K on an AA credit card for 125K loyalty points.

keitherson

Credit card spending = pure profit, no cost to the airline

The airline doesn't want to be an airline and doesn't reward people that fly, because operating an airline costs money.

So ridiculous. Look forward to seeing a bunch of manufactured spending elites.

TravelingZoomer

This isn’t the AA forum, please discuss it over there.

xliioper

It's not actually pure profit as they are generating a mileage liability. Most of the profit in FF programs is in the aggregate from breakage (miles that will never be redeemed). People who mostly or entirely earn their status from CC spend aren't actually consuming much in the way of the benefits and don't actually cost much to the airlines. High CC spenders may also primarily buy F/J tickets where they already get many of the benefits conferred by status and it costs the airlines very little to provide them with status. While some people may find it "offensive" that people can earn status solely via spend, they aren't actually diluting the benefits you receive if they fly very little.

keitherson

Where do you think all the AA refugees are going to go?

keitherson

They are eating up all the award space. That's why some airlines had to create separate classes of inventory only available for elite fliers, because premium award space has been all booked away from non-flying, high-mileage account holders from spend/CC churns.

HIgh CC spenders don't buy F/J revenue tickets, people on corporate OPM do.

Why do you think Alaska put in a 24 metal requirement for 100K status? Why do this at all?

JetAirways77W

AS being mileage based is the only reason why it's worth it for me to chase status at all. I'm a college student flying ~5x BOS-SFO roundtrip per year (to get to campus and back) on cheapest non-basic fare, which means due to pure distance I can hit MVP without having to do anything extra (2700*2*5 = 27000 EQM). Trips with family help too (a BA I fare trip to India earlier this year earning 27k EQM alone will boost me to MVPG once I get an additional AS segment in).

On AA it would be much, much harder to even qualify for AA Gold with the change - just my campus trips would only get me ~1000-1400 LP per direction (starting from scratch or assuming existing Gold status) assuming an average ticket cost of ~$200, so I'd only be hitting about 10000 LP a year before credit card spend - which, as a college student, is fairly minimal even if I try to manufacture spend by paying for others and having them pay me back. No chance I'm making any status with that.

TravelingZoomer

I don’t know, but a forum to discuss Alaska Air and it’s affiliates isn’t the place to think about changes to AAdvantage and it’s impacts

thatmikereed

Who cares? If they're not flying, they're not competing with me for flight benefits.

With Oneworld, it sort of has to be now. Several bloggers are already talking about shifting their focus to AS vs. AA, which means an influx of folks that actually DO fly on AS competing for benefits, being in lounges, etc. If anything, this helps AS - it's likely far more profitable for most flyers to use AS metal over AA and credit to AS, even if only for the Oneworld status.