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American's loyalty program is worth more than Airbnb

May 20, 2020
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3 min read
American Airlines Project Kodiak Oasis 2.0 737 Zach Griff ZGriff - 1 (1)
American's loyalty program is worth more than Airbnb
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Airline loyalty programs are massive businesses in and of themselves. In some cases, they're more valuable than the rest of the airline's operations.

In American's case, the carrier plans to use the AAdvantage program as collateral for a federally subsidized CARES Act loan. And as part of that process, the carrier's had the loyalty program appraised. Just how much the program is worth? Between $18 and $30 billion, according to AA's CFO Derek Kerr.

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The Fort Worth-based carrier plans to pledge the AAdvantage program to the feds by the end of the second quarter. Interestingly, United also suggested that it could use its MileagePlus program as collateral for federal aid.

Throughout the coronavirus, we've seen hotel chains leverage these assets by pre-selling millions of dollars worth of points to credit card issuers in order to raise some much needed cash. American's two chief competitors — Delta and United — have reportedly been in talks with Amex and Chase, respectively, about doing just that.

Even if the loyalty program is given as collateral to the feds, Kerr stated that the airline could still work with Barclays and Citi on preselling miles or "other forms of liquidity."

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Related: American Airlines ‘not going away’ because of the coronavirus crisis

This is the first time that the appraisal of the AAdvantage program has been disclosed publicly. At its current valuation, the program, which is widely considered America's first airline loyalty program, could be worth more than the airline itself.

Related: Maximizing redemptions with American Airlines AAdvantage

This hasn't stopped American from making changes to AAdvantage over the course of the past few weeks. It all started when the carrier extended elite status across the board. As part of the announcement, American revised its award change and redeposit fee structure, which was bad news for some members. Then on May 19, the carrier introduced the ability to use miles for seat assignment purchases. AA also removed its legacy award search tool too, in a sign that dynamic award pricing is here to stay.

Nonetheless, the AA loyalty program is still incredibly valuable, and enough to keep the carrier (partially) funded by the government for the foreseeable future.

All photos by the author.

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Apply for American Express® Gold Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best for dining at restaurants

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TPG Editor‘s Rating
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  • Intro Offer

    As High As 100,000 points. Find Out Your Offer.

  • Annual Fee

    $325

  • Recommended Credit

    Excellent to Good

Why We Chose It

There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)

Pros

  • 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
  • 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
  • Packed with credits foodies will enjoy
  • Solid welcome bonus

Cons

  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber and other dining credits
  • You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
  • Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
  • Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
  • Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
  • $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
  • $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
  • $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
  • Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
  • No Foreign Transaction Fees.
  • Annual Fee is $325.
  • Terms Apply.