AAdvantage Members Redeemed $886 Million in Free Flights This Year. How Much Did You Get?

Apr 26, 2019

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On Friday morning, American Airlines announced its financial results for the first quarter of 2019. It wasn’t a great quarter, and it’s not getting better anytime soon. Airline management warned of potential $1 billion reduction in earnings due to the 737 MAX grounding and rising fuel prices.

One of the bright spots pointed out by airline management was “higher loyalty revenue.” But that’s not (just) from selling more miles to airline members and credit card issuers. Due to a revenue recognition change effective January 1, 2018, airlines now actually want you to use your miles. That’s because airlines have to defer revenue when miles are earned, whether through flying or earned through credit cards. This revenue can’t be recognized by the airline until “mileage credits are redeemed and transportation is provided.”

That’s why airlines are working to fill airplane seats with passengers paying with miles, if they can’t fill them with cash-paying passengers. We’ve seen new mileage initiatives from most domestic airlines:

And these efforts are showing. In the third quarter (July-September) and fourth quarter (October-December) of 2018, AA saw double-digit percentage growth in loyalty revenue travel. In the first quarter of 2019, American Airlines recognized $886 million in revenue from award redemptions. That’s a record since the airline has started using this new revenue-recognition procedure.

But it’s not just the revenue number that’s increasing. The percentage of total passenger revenue that’s from award travel has steadily ticked upward. In 2017, award travel made up 7.6% of total passenger revenue. In 2018, that number was up to 7.9%. For the first three months of 2019, as much as 9.2% of total passengers revenue is from award travel — but that includes the seasonal bump usually seen in Q1.

Quarter Loyalty revenue
travel (millions
of dollars)
Year-over-year
increase
% of total
passenger
revenue
(rolling
12 months)
Q4 2017 728 7.6%
Q1 2018 850 6.0% 7.6%
Q2 2018 797 5.8% 7.7%
Q3 2018 771 10.8% 7.8%
Q4 2018 801 10.0% 7.9%
Q1 2019 886 4.2% 8.0%

Hopefully you were part of that record-setting $886 million in free flights flown in the first three months of 2019. Even if not, it’s not too late to get into the game that airlines now want you to play more than ever. If you’re looking for some inspiration on how to use your AA miles, here are some of my favorite ways to redeem AAdvantage miles:

Reduced Mileage Awards: certain AA co-branded credit cardholders can apply a discount code to redeem award flights to/from certain airports for as little as 6,500 miles each way. On the latest version of the promotion that runs from April to July, there are 139 airports listed for at least one month and 43 airports listed for all four months.

Economy Web Specials: American Airlines’ newest mileage discount program seems to be a step toward dynamic mileage redemptions, but it’s also a way to get domestic award flights from 5,000 miles each way, Caribbean award flights from 5,000 miles each way and discounted awards to Hawaii, Europe and South America.

Business class awards to Japan: Another sweet spot in AA’s award chart is business class from the US to Japan for just 60,000 miles each way in business class. American Airlines has a solid business class product on routes to Japan, but you could also redeem AAdvantage miles for Japan Airlines business class instead.

Business class awards on the world’s best business class product: For the TPG Awards, we put the world’s best airlines to the test to figure out which was the top. The winner: American Airlines partner Qatar with its Qsuite product. Here’s where Qsuite is flying in the US in 2019 — including how to search award availability. It’ll cost 70,000 miles one-way from the US and the Middle East (e.g. Qatar, Egypt, Saudi Arabia, UAE) or Indian Subcontinent (e.g. India, Sri Lanka, Maldives) — or 75,000 miles each way between the US and anywhere in Africa (e.g. Seychelles, Mauritius, South Africa).

First class on Etihad’s Apartments: If only first class will do — and you can find award availability — you can redeem AAdvantage miles for one of the best first class products in the sky: Etihad Apartments. In testing for the inaugural TPG Awards, Etihad Apartments ranked #2 in the world — falling just short of Emirates first class. The world’s second-best first class product doesn’t come cheap at 115,000 miles each way, but that’s reasonable compared to some award rates on AA flights.

If you need more miles to make your redemption goals a reality, there’s a number of credit cards with sign-up bonuses:

The information for the Citi AAdvantage Platinum card and CitiBusiness AAdvantage Platinum card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Featured image by JT Genter / TPG

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