In the past few years, a number of airlines have changes their frequent flier programs to move away from a distance-based system. While these airlines still refer to their frequent-flyer currencies as "miles," many, like Delta and United, now award "miles" based on the value of the ticket, as opposed to the number of miles being flown. Similarly, American Airlines confirmed recently that it, too, will be moving to a revenue-based earning system for its AAdvantage loyalty program in August.
In the past, airlines were less sophisticated about revenue management. The average domestic fare has declined more than 20% since early 1995 and these fares earned just as many miles as they did when fares were higher. This makes these low fare tickets even less profitable for airlines.
Under the new AAdvantage program, which goes into effect on August 1, customers without elite status will receive five miles per dollar spent (not including taxes and government fees). Elite-level customers will get more miles: anywhere from seven miles per dollar to 11 miles per dollar, depending on the elite status tier.
Beginning in 2017, customers will have to spend a minimum amount to qualify for elite status as well: $3,000 per year for the lowest tier and $12,000 for the Executive Platinum tier.
In all three programs customers who spend the most money will earn higher benefits. Travelers which do not travel frequently will earn fewer rewards and may find it difficult to earn enough miles for a flight.
- by: Tammi Gelentere
- July 5th, 2016