Frequent flyers tend to use the same company when they fly because many offer an amazing loyalty rewards program. American Airlines currently uses an AAdvantage® program, which awards members miles every time they fly on America, oneworld® and other participating airlines. Those earned miles can be used for flights to over 1,000 destinations worldwide, upgrades, vacations, car rentals, hotels, and other retail products. It definitely pays to travel with the same company, however American Airlines announced that in 2016, they will be restructuring their rewards program to keep up with the rest of the airline industry.
Expected changes to the rewards program
American Airlines announced that their AAdvantage program® will reward elite members of the program, which are those who spend the most money on expensive seats and flights. Regular members of the program will earn five miles for every dollar spent. Executive Platinum members will receive eleven miles for every dollar spent. This basically allows those who spend the most money to earn the most milepoints, and gives fewer points to individuals who book discount or sale fares. The company is looking to reward their most loyal and valuable members.
A new common standard in the industry
Price-based rewards programs are becoming an airline industry standard. American Airlines is not the first company to make changes to their rewards program, and is instead following in the footsteps of their biggest competitors. United Airlines and Delta Airlines already converted their old rewards programs to the new version of giving points based on the amount of money spent. Popular discount travel company, Southwest, also made changes to their rewards program in April of this year. Points earned by travelers flying with Southwest’s rewards program will be obtained through a value based on destination, time, day of travel, and demand.
Details about program changes
American airlines has yet to release an official date in the new year, in which changes will take effect. The only information given, was that it will begin in the second half of 2016, so there is still time to utilize current reward program rules. American Airlines has recorded profit in 2015 and only wants to use the rewards program as a way to create even more money. Experts agree that major airlines in the United States have changed reward programs in order to gain more profits. If the company reduces the amount of points by travelers who are using low discount fares, and gives them to high fare flyers instead, the company gains a lot more. When consumers shop the lowest coach fare, the company can experience a loss in profits. American Airlines will also be recalculating the number of points it takes to earn a flight, and reducing the total points for flights to Mexico, the Caribbean, and Central America. There has been a high customer demand for flights to Europe and Asia. Points for these flights will increase.
A majority of frequent flyers are not trying to spend thousands of dollars for a flight, and would rather search for the best money saving options. It seems as though American Airlines just wants to keep up with the rest of industry, and make profits which will keep the company in business, especially since they are up against a number of other competitors.