American Airlines, JetBlue unveil reciprocal mileage and elite earnings — with a major twist

American Airlines and JetBlue are expanding their Northeast Alliance — but not with new routes or codeshare markets.

This time, the two carriers are teaming up to announce the first major loyalty benefit of their Northeast-focused partnership: the ability to earn miles and elite-qualifying progress on either airline.

While there's a lot to unpack here, the first thing to note is that the new feature is already live for any flights taken on or after today, May 26.

TPG sat down with Rick Elieson, president of the AAdvantage loyalty program, at American's Fort Worth headquarters, and his message was loud and clear: the goal is to make it as seamless as possible to do business with either airline. "This is always true where you look at your inorganic or virtual network," he said, "how seamless can you make it? How neutral can you approach it?"

Turns out, American and JetBlue are getting pretty close to metal neutrality when it comes to earning miles.

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Earn American Airlines AAdvantage miles on JetBlue flights

Effective immediately, you can choose to earn AAdvantage miles for JetBlue-operated flights. This includes itineraries booked directly with JetBlue or those purchased via American as part of the alliance agreement. The only exclusion is JetBlue's soon-to-launch London service.

No matter where you book, you'll earn redeemable AAdvantage miles based on the fare you purchased, excluding government-imposed taxes and fees.

You'll earn miles at the same rate as if you were flying American itself, specifically:

• AAdvantage member – five miles for every U.S. dollar
• Gold elite member – seven miles/U.S. dollar (40% bonus)
• Platinum elite member – eight miles/U.S. dollar (60% bonus)
• Platinum Pro elite member – nine miles/U.S. dollar (80% bonus)
• Executive Platinum elite member – 11 miles/U.S. dollar (120% bonus)

For example, a $120 ticket from Los Angeles to Las Vegas with JetBlue would earn roughly 500 AAdvantage miles for a general AAdvantage member.

Other than the London carve-out, all JetBlue tickets, including those booked in basic economy, will earn redeemable miles.

American's first partner to earn based on fare

This one's big. JetBlue will be the first of AA's current partners to earn miles based on the fare paid.

Until now, most major airlines (including American) awarded redeemable miles for partner flights based on a combination of the cabin purchased, the distance flown and the elite status level.

But Wednesday marks a major industry shift that'll be interesting to follow. Savvy frequent flyers (and TPG readers) have historically been able to take advantage of generous mileage accrual charts for partner flights. For instance, a deep-discount Qatar Airways business-class ticket from New York to the Maldives might cost $2,000 round-trip. Under the current mileage earning rates, you'd net nearly 18,000 AAdvantange miles as a general member on that ticket.

With JetBlue, a similarly priced $2,000 round-trip Mint biz ticket will earn just 10,000 AAdvantage miles, regardless of the destination.

In Elieson's words, "JetBlue is in. We are embedded. We want people to feel indifferent about which one they fly."

Interestingly, this mileage accrual scheme is strikingly different from when American and JetBlue last teamed up in 2010. Back then, all eligible JetBlue flights earned AAdvantage miles at a rate of 100% of the distance flown.

If you're a big spender or travel on short routes, odds are that you'll make out better with the fare-based earning model. But if you purchase discounted coach tickets on longer flights, you likely would've preferred the traditional earning rates based on distance flown and cabin purchased.

Just be sure to crunch the numbers before you credit a JetBlue flight to American.

Either way, this move to a fare-based earning model could usher in a new era in how airlines award miles with partners. Of course, it requires an integrated back-end system that passes fare data securely between airlines. But if it can be pulled off in a way that doesn't upset regulators, it's likely only a matter of time before other airlines consider implementing something similar.

AAdvantage elite-status qualification with JetBlue

Though you'll earn redeemable AAdvantage miles based on the fare spent with JetBlue, elite-qualifying criteria will follow the legacy model: you'll earn elite-qualifying miles (EQMs) based on fare class and miles flown, according to the chart below.

As you can see in the chart, JetBlue's Blue Basic tickets do not earn any AA elite-qualifying progress, which is the same way that AA handles basic economy tickets on its own metal.

For example, if you bought a discounted $599 Mint business-class fare from New York to Los Angeles, you'd earn 4,950 EQMs (2,475 flown miles multiplied by two), one EQS and roughly 550 EQDs, in addition to the 2,750 redeemable AAdvantage miles you'd earn as a general member.

Earn JetBlue TrueBlue points on American Airlines flights

At this point, it's likely no surprise to learn that JetBlue will also award TrueBlue points based on the fare purchased with American Airlines. All AA flights worldwide are eligible to earn TrueBlue points — there are no exclusions.

You'll earn TrueBlue points according to the chart below.

The first thing to note in this chart is that you aren't eligible for the JetBlue app/website booking bonus if you purchase a ticket through American Airlines booking channels. So, if you're planning to credit your AA flight to JetBlue, you might as well purchase it directly through the JetBlue app or website.

Of course, only routes and codeshare markets covered by the Northeast Alliance are available for purchase via JetBlue. If you're purchasing an AA flight not covered by the Alliance and crediting it to JetBlue, you'll forfeit the booking bonus.

Additionally, the Mosaic bonus is only applicable to JetBlue elite members. Note that the base points earned from an AA flight do count toward Mosaic qualification progress.

Finally, to earn the JetBlue Plus Card bonus, you need to book with a cobranded JetBlue credit card, and not all cobranded JetBlue credit cards earn the same six-point bonus.

What's next for the Northeast Alliance

In addition to a slew of new routes and codeshare markets launching in the coming weeks and months, there are additional frequent flyer benefits coming as well.

Both airlines have promised access to reciprocal mileage redemptions, meaning that you'll soon be able to use AAdvantage miles for JetBlue flights, and vice versa. Additionally, American and JetBlue have teased reciprocal loyalty perks for elites, regardless of which carrier they fly. The details remain to be seen, but this could include free checked bags, extra-legroom seats and more.

Elieson explained that Wednesday's announcement is just the first step in a larger journey in creating reciprocal loyalty benefits. "That's what it is today," he said, referring to the mileage accrual details, but promised more announcements will come as the details are ironed out.

In the meantime, he encouraged to customers to be patient with the rollout, saying "please recognize that it may look uneven or lumpy or may not unfold exactly how someone would've wished it to, but it's going to keep coming together."

We'll be following how it unfolds, but one thing's for sure — American and JetBlue just began their loyalty partnership with an interesting twist.