'That's off': American Airlines backtracks on changes to how passengers earn miles and Loyalty Points
American Airlines is canceling changes that it planned to make to its booking experience, which would have seen some passengers become ineligible for earning miles or Loyalty Points.
Under the originally planned changes, passengers on American would only earn frequent flyer miles and Loyalty Points, or credits for elite status on the airline, if they had booked their ticket either directly with the airline or through one of its preferred channels. A variety of third-party booking platforms would have potentially been excluded, including some corporate travel-booking portals.
Speaking at a Bernstein financial conference Wednesday, American Airlines CEO Robert Isom said that the airline was scrapping the plan as part of a broader effort to pull back on its recent distribution strategy. That strategy was meant to encourage customers to book directly with the airline, meaning the carrier would not have to share a cut with a travel agent or booking service.
However, Isom said, the broader strategy, along with the specific tactic of restricting mileage earning, were creating confusion which has driven customers to book flights with rival airlines.
"That's off — we're not doing that because it would create confusion and disruption for our end customer," Isom said. "We need to work closely with our agencies and partners to ensure that the transition that we're making is not disruptive to our end customers."
"We know that NDC [New Distribution Capability], modern retailing, provides a better experience for the customer," he added, referring to new distribution tools available when passengers book directly with the airline or with certain preferred partners. "We know that we will get there over time. We have to go about it differently."
The changes to mileage and elite status earning were originally slated to go into effect May 1, but had already been pushed back to July 11.
Loyalty basics: Best ways to earn airline miles
The pivot in strategy — which is likely welcome news to American flyers, particularly those who travel for work and book tickets through a corporate platform — comes less than a day after American unexpectedly announced the departure of Chief Commercial Officer Vasu Raja. American also lowered its financial outlook for the second quarter Tuesday, saying it now expects unit revenues to decline as much as 6% compared to the same quarter last year. It previously projected a drop of up to 3% compared to last year. The airline said it would cut capacity growth in the latter part of this year.
Raja was a major driver of the airline's new distribution strategy, along with other strategies that have produced disappointing results for the airline, like reducing long-haul flying in favor of booking passengers on codeshare partners, along with the airline's network strategy focusing on the so-called Sun Belt, broadly lining the southern third of the United States at the expense of its northern and coastal hubs.
On Wednesday, Isom recommitted to the Sun Belt strategy, however, even as the airline's shares fell more than 15% following the opening bell.
"I haven't seen anything that suggests the Sun Belt cities aren't going to continue to be a real economic engine in the United States," Isom said. "Our regional network is so important," he added, referring to criticism that the airline has sacrificed some of its broader network in the interest of servicing the Sun Belt hubs.
"When you take a look at that region, our unit revenue performance has been down considerably, but it's not something that we're going to abandon," Isom added. "We're going to make sure that we're there when the [air travel market] dynamics change."
Related reading:
- Your ultimate guide to American Airlines AAdvantage
- Best credit cards for American Airlines flyers
- American Airlines elite status: What it is and how to earn it
- Maximize your airfare: The best credit cards for booking flights
- The best credit cards to reach elite status
- Everything you need to know about flying basic economy on American Airlines
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | 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. |
| 4X | 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. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
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 $8,000 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.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.