American Airlines devalues sharply – how are flights from the UK impacted?

American Airlines announced a sharp devaluation of the AAdvantage loyalty programme on Tuesday evening.  We knew it was coming, as the merger of American and US Airways is now completed.  What was disappointing is that it contained very little original thinking.

The important thing to note is that the changes to the spending chart do not come into effect until 22nd March 2016.  In terms of booking redemptions, you would be able to book until February 2017 at the old rates if you could commit 11 months in advance.

Earning miles and status:

This is not hugely relevant to the UK market as not many HFP readers choose to earn status with AA rather than BA.  You can get a more detailed analysis on some of the US sites such as View from the Wing here.

About 18 months ago, Delta Air Lines decided on a fairly random way of running a revenue-based frequent flyer scheme.  Instead of awarding miles based on distance, it decided to award 5, 7, 8 or 11 miles per $1 spent on their own flights, depending on your status with the airline.

I’m sure there was some logic behind these numbers but it wasn’t based on any great mathematical formula. (Why not 5, 7, 9 or 11?!) Despite this, United and now American have slavishly copied the exact same structure.  It is a bit pathetic.

Miles earned on partner flights, such as British Airways flights credited to American, continue to accrue on the old basis of distance flown multiplied by a cabin bonus.

The changes above will only start in ‘late 2016’.

In terms of earning status, American has gone for something similar.  ‘Elite Qualifying Miles’ for flights marketed by AA will accrue at the following rates:

Gold (BA Bronze) requires 25,000 EQM’s.  Platinum (BA Silver) requires 50,000 EQM’s and Executive Platinum (BA Gold) requires 100,000 EQM’s.

(EDIT: I have deleted a paragraph because an error above, now corrected, made it irrelevant.)

The changes to earning status points based on spend will start on 1st January.

If you are crediting British Airways flights with a non-AA flight number to American, you continue to earn EQM’s based on distance flown.  You will earn 1.5 EQM per mile for any flight in World Traveller Plus or above and 0.5 to 1 EQM per mile for World Traveller.  When flying to North America, you would need to see (based on ticket price and class of service) whether you should buy a ticket with a BA or an AA flight number!

American Airlines

Redemption prices increased sharply:

If you are redeeming American Airlines miles for flights from the UK, you are more likely to have obtained some or all of your miles from the AA credit card or via a transfer from, say, Starwood Preferred Guest.

You may even have focussed on buying all of the AA miles you needed as that was cost effective in many cases if there was a good bonus promotion running.

Here is the new reward chart for flights on AA planes.

Here is the new reward chart for partner airlines, which includes BA and Etihad.

Remember that this only applies to flights booked after 22nd March.

It isn’t pretty.  There has been very little movement on economy redemptions.  Business Class has taken a hit.  First Class has taken a complete beating.

Let’s take London to Abu Dhabi on Etihad (or BA, but you’d be mad to choose BA given the fuel surcharges) as an example.  This used to cost:

  • 40,000 miles return in Economy
  • 60,000 miles return in Business
  • 80,000 miles return in First

This was a great deal even before the April 2015 Avios changes.  Since April it has been even better as Avios pricing went up to 100,000 – 120,000 points for BA Club World return.  From March, AA will charge the following:

  • 40,000 miles return in Economy
  • 85,000 miles return in Business  (up 41%)
  • 125,000 miles return in First (up 56%)

Yes, it is a big hit.  It is still a far better deal than redeeming Avios, however, unless you have a British Airways 2-4-1 voucher to use.  Of course, it isn’t that simple for most of us since earning AA miles for a UK resident is a lot, lot harder.

Another amazing deal was from the UK to Australia.  This used to cost:

  • 90,000 miles return in Economy
  • 120,000 miles return in Business
  • 160,000 miles return in First

From March it will cost:

  • 120,000 miles return in Economy
  • 170,000 miles return in Business (up 41%)
  • 230,000 miles return in First (up 44%)

Again, a big increase.  Again, it is still far fewer miles than an equivalent Avios redemption (100,000 in Economy; 300,000 in Club World; 400,000 in First – plus the fuel surcharges).

If you want to take a look at other routes, the links above bring up the relevant award charts and there is a link in each chart to the current pricing.

All in all, it is disappointing but not too surprising.  There are still reasons to credit your flights to AA, especially if you are a business traveller who is regularly on fully flexible business class tickets and earns the bulk of his/her miles from flying.  The redemption chart remains cheaper than the BA one in many instances and – except for BA redemptions – you won’t be paying any fuel surcharges.

100% bonus on Heathrow Rewards transfers (it makes the sign-up promo worth 6,000 Avios!)
Bits: Bonus miles with Virgin Trains, 25% off SPG points (= cheap miles), Tesco Delivery Saver free trial
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Comments

  1. As a Middle East to Europe traveler this will hit me hard. The whole reason I started collecting AA was because the redemption was far less than Qatar Airways. Now its only 500 miles less than QA!

  2. We’ve (2 adults, 1 child, 1 infant-turned-child) only just started gathering AA miles as we jumped on the LinkedIn status challenge and with one PE flight to Asia we’re now all platinum – I should get Exp Plat when I do a short EU flight in December.
    The status is handy, trouble is it means we are now 4 pax with 30, 20, 20 + 0 miles to our name and I’m not quite sure how best to make use of them. Possibly a holiday milage run to South America using our SWUs, and try to earn enough to get a biz return to India or Africa (with a small purchase on top) before March? Seems a bit rushed tho, hadn’t planned to go anywhere until at least april next year!

  3. Raffles, not sure if what you’re saying above about hitting status is correct. Isn’t AA Gold only equivalent to BA Bronze, not Silver (in other words it’s OW Ruby), and similarly AA Platinum is only BA Silver (or OW Sapphire), not BA Gold, which makes the calculations above incorrect?

  4. Agree the 5 / 7 / 8 / 11 thing is funny/pathetic.

    I bet BA’s earning will be 2.5 / 3.5 / 4 (/ 5.5) per £ (not $) by 2025.

  5. Must admit the increase from 50k to 57.5k for flights across the Atlantic in Business on AA is a lower increase than I had feared.

    • Agreed, a 15 per cent increase in business to Hawaii, round trip, from 100,000 to 115,000 is not too bad

      • Think again. Hawaii has a separate entry on the award chart, different to the 48 contiguous states. It’s now 70k miles each way as a sAAver award. Also the off peak economy award from Europe to the Caribbean, Hawaii and Mexico have been removed. The cheapest award to Hawaii is now 40k each way in economy.

  6. Atlantico says:

    What will happen to award bookings changed after March 23rd? Date change, will it remain on old rates or new rates will apply? With BA changes at least old rates remained valid.

  7. Sebastian says:

    I still maintain that the changes are reasonable and in many ways, in redemption terms, people could’ve expected worse. The problem with AA was that it was ludicrously overvalued. I mean come on, with the current chart you can get a return flight to Oz in first for 160k points, with no tax! while with the new one it’ll be 230,000 with no tax, which still beats BA by a country mile. Also, a flight from LON to LAX is now 115k return no tax compare to 100k return no tax, still excellent value when you compare it to BA. On top of this it needs to be remembered that in the states points can be gained incredibly easy as it’s quite common to see 50k-100k points sign ups so the majority of Americans are still going to fly for a lot less and much more easily than anyone else can.

    • No tax? I was just pricing up a o/w to oz in first on Etihad and it was coming in at just under £400 each?

      • I think he meant no fuel surcharge [that BA charges]. Majority of that tax will be UK APD on the departures from the UK. Start the trip in DUB and it will drop down significantly.

      • Also unless they’ve loosen the routing restrictions, Oz via AUH is priced as 2 awards, 62.5k+100k e/w F.

    • I agree the changes are disappointing but largely fair. Of course those of us in the EU who don’t have access to the massive sign up bonuses that they do in the US will find it rather difficult to collect the revised mileage. The excellent value to be had from simply buying miles to redeem for first on etihad & cathay has been killed.

  8. I move the question here,

    If AA wants to stop rewarding cheap Economy flights, but with the other hand regularly sells long-haul flights for several hundreds USD — what are they trying to achieve? Clearly if a flight is available for $300-400 for months, the capacity is not taken up.

    If those cheap Economy flights will stop being attractive to mileage runners… then who will take those seats?

  9. Another I keep my eye on is Asia to South West Pacific, because I regularly need a way to “extend” my one main LH redemption a year out to NZ to see family, and amassing 100k AA every couple of years is achievable.
    Asia1-SWP has gone DOWN from 45k to 40k e/w J (that’s Japan/Korea). Asia2-SWP (the rest of Asia) is up from 35k to 40k. That’s less than Europe-ME yet maybe 60% longer, and would be 60-90k avios.
    Cash fares are stiff competition but a BA 241 to Asia and AA onwards is still a pretty good way to NZ, and Oz to a lesser extent.

  10. Has it ever been pointed out here that an SQ redemption Europe-ME is a bit of an anomoly: 50k return J, 70k return F. The J rate is bizarrely less than Europe-Europe. And they’re an MR partner too. That seems even more of a standout now … shame there aren’t top class carriers available though.
    http://www.singaporeair.com/pdf/ppsclub_krisflyer/charts/StarAlliance_RoundTrip_Aug15.pdf

    • Sebastian says:

      Who exactly flys to the ME with the Kris miles? At 50k return that’s decent

      • That’s the *A chart so it’s Lufthansa, SWISS, Turkish, Egypt I think for DXB/AUH/MCT. A few others if you want somewhere more exotic like Tehran!

        • I notice that SQ have separate charts for non-*A partner like VS. For ME, VS is the same 35/50/70 except that’s for Y/W/J not Y/J/F. So the *A chart could be an accident or a typo: I’m not certain if they’d honour it so maybe call before doing any MR transfers.

          • Sebastian says:

            I feel like I don’t know anything, who are the VS partners? In regards to Kris miles accepting that, I’ll take it on board, although if I am being honest I’ll probably just move my MR points to BA or VS.

        • Swiss business is fantastic, would strongly recommend that.

          Remember that Swiss does not release award seats in F and Lufty only releases them to partner airlines 14 days before travel.

  11. flyforfun says:

    On the “travel from Europe” chart and looking at the “travel wholly in the UK” section, it has a listing for 15K for business/first class travel. Is there anyone that does business or first in the UK currently? I thought BA Domestic was one class? Or do they know something we don’t??

    • The current equivalent (pre 3/22) is 17.5k. Guess what the cost is for LGW-JER J. They’re just being a bit American in their understanding of Europe!

  12. EvilGazebo says:

    I can’t see anything about any impact on upgrade award cost, either on AA or partners?

    If they stay the same I will abandon my plans to use my measly 50K AA for a o/w US -> UK and save it to upgrade a hypothetical future AA/BA/IB biz travel flight……

  13. Henrik1888 says:

    I credit all my AA miles and tier points to BA. It’s my AA tier points which pretty much guarantee my BA status each year due to their very generous 60 points per domestic sector in ‘First’. I’ve read through the changes a few times but I still can’t figure out how this will impact my particular situation. Any ideas?

  14. I was hoping it wouldn’t be as drastic as this. The flight I was saving for (Europe – probably Turkey/Georgia – to Hawaii) has gone from 20k to 45k each way in economy…

    • A flight from turkey to Hawaii for 20k? I think 45k is more realistic.
      they are not a charity, 45k is still good value for such a flight

  15. Franklybrit says:

    You’ve missed the 50% increase in economy ticket costs to the Caribbean and Mexico (was 40k off peak, now 60k) and the 100% increase in costs to Hawaii (was 40k, now 80k), as AA have taken them out of the ‘North America’ category they used to be in. These used to be great value economy awards – not any more.

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