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Is it time for AAdvantage to once again follow Delta's lead?

April 05, 2020
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6 min read
American Airlines Boeing 787 Dreamliner
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Delta maintained their position as the industry leader in US aviation customer service with the announcement today that elite status and benefits would be extended due to the impact COVID-19 has had on travel.

The announcement has already been met with a huge wave of positivity from the frequent flyer world and will serve to score Delta a quick PR win in rather grim times. I believe there are downsides for Delta in making this move and remind you it would never have been made if times weren't as dire as they are for the US airline industry.

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Taking into account the downsides we'll discuss below of opening the proverbial flood gates and gifting all members an additional year of status, should American once again follow Delta's lead?

The downsides of gifting free status

Before even discussing the downsides of gifting flyers a free year of status, it has probably already become a moot point. The public backlash against any airline that doesn't extend status now that one of the Big Three has done it would most likely be insurmountable. Nevertheless, there are a few negative aspects of extending status to consider:

  • By gifting status to your most loyal (and most profitable) customers, you actually de-incentivize them to fly you. There would be no reason to chase status until February 2022 — that's 22 months of your most loyal customers perhaps now searching by price and itinerary convenience alone.
  • Co-branded card usage, a very profitable aspect of airline loyalty programs, drops because those looking to hit spend thresholds for added perks or Elite Qualifying Miles no longer have to worry about it.
  • The data needed to weigh how many customers you'll gain by gifting status versus how many ticket sales you'll lose isn't available this early in the COVID-19 pandemic and no precedent exists to model off of.

Mark Ross-Smith, former head of the Malaysia Enrich loyalty program and creator of Travel Data Daily, argues extending status this early in the elite qualifying year is a "sugar hit" and a potential fallacy:



A business cannot solve a transactional problem (pax not flying) – with an emotional solution (extending status for free). All that will achieve in the member’s mind is devaluing elite status. It won’t help the members and it won’t help the airline in the long term...Any perceived PR/branding/marketing benefits the airline may enjoy from the short-term sugar hit of gifting out free elite status to the entire loyalty member base – will certainly be overshadowed by the loss in ticket sales in the coming one, two, three years.

I'd argue that with Delta burning more than $60 million a day in cash and with revenue down 97%, the current situation meets the criteria of extending status and takes an emotional win from the customer base. There aren't any more passengers to lose right now and you want to take the first mover advantage in the headlines.

What Should American do?

I was gifted American AAdvantage Executive Platinum status through my Hyatt Globalist concierge at the end of 2019 and had been enjoying a fantastic domestic flying experience on American until we were all grounded. Being Atlanta based, my competition for upgrades has been nonexistent and I've cleared every upgrade five days out from departure.

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Would I like to experience that all the way until January 31, 2022? Yes, and I don't think there's any alternative AAdvantage can offer that wouldn't now alienate customers. American should:

  • Extend elite status an additional year through Jan 31, 2022 for all members at their current permanent status level regardless of how they earned it
  • Count all Elite Qualifying Miles (EQM) and Elite Qualifying Dollars (EQD) from flying or co-branded card spend in the 2021 qualifying year for 2022 status
  • Extend current system wide upgrades (SWUs) with an additional six months of time to be flown by July 31, 2021. However, I do not think an additional four SWUs need to be given to current Executive Platinum members.
  • Allow anyone who was signed up for a status challenge before March 1, 2020 to re-sign up and try again from scratch, for free, at any date upon their request
  • Extend all companion certificates, Admiral's Club memberships and other co-branded card benefits by one year (Note: 500-mile certificates do not expire but you must be an elite member to use them)

Bottom Line

I'm a bit surprised Delta pulled the trigger this early in extending status. With no end date in sight for the current crisis and with no one flying, I don't think it was necessary to make this decision or announcement so early. However, now that they have, the Big Three likely have to follow suit or face a public uproar, one that American Airlines may not be able to withstand given their current debt and existing discourse among their own loyal flyers that predated COVID-19.

American doesn't need to make an announcement any time soon, but they should go ahead and line up the specifics and then have those vetted by a few of their most loyal customers to gauge the public reaction. Now certainly isn't the time to try and come up with prorated elite thresholds for 2020, which would inevitably become complicated and would be illogical as there is no end date on the horizon to the pandemic. It's time for American to once again follow Delta's lead.

For more, check out:

Here’s how Delta, Hilton and Hyatt impressed me during a crisis

Featured image by NurPhoto/Getty Images

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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)

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  • 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.