If You Plan on Redeeming AAdvantage Miles on Etihad, Do It Now
Multiple sources are reporting that Abu Dhabi-based Etihad Airways is on the verge of severing ties with American Airlines to join Star Alliance and add United Airlines as a partner airline. Etihad and American's current partnership includes the ability to earn and redeem frequent flyer miles between airlines regardless of which airline frequent flyer program the traveler is a member of.
As of Sunday morning, TPG contributor Max Prosperi managed to find guest award availability on an Etihad Airways flight from Los Angeles (LAX) to Abu Dhabi (AUH) on Tuesday, Feb. 26 in Etihad's business class. TPG called an American Airlines customer service representative to follow up. The AAdvantage representative confirmed the one-way, nonstop award flight was available for 70,000 AAdvantage miles plus taxes and fees.
TPG then inquired about booking American Airlines flights using Etihad Guest points. Once connected with Etihad Airways, the representative confirmed that yes, you can still use Guest points on American Airlines. However, the agent went on to say that travelers won't be able to "earn miles on your Etihad Guest account when you fly on American Airlines." Upon inquiring directly about the rumors that Etihad plans on ending ties with American, the representative responded, "We are aware of the rumors that American Airlines and Etihad Airways will no longer be partners, however, we cannot confirm this." Before hanging up, the agent jumped back in to add that "in the event that something in the future were to come up" travelers should "probably book partner flights as soon as possible if you plan on using your Etihad Guest points on partner flights."
Possible Reasons for Etihad's Switch
In the past decade, the three largest Middle Eastern airlines (Emirates, Etihad and Qatar) have experienced significant growth, which US airlines have attributed to government subsidies. In response, US-based airlines, including American Airlines and Delta Air Lines, launched a campaign in 2015 claiming that these subsidies violate international agreements. With American Airlines being one of the strongest supporters of the anti-ME3 campaign, Etihad's partnership with American Airlines has become increasingly hard to justify.
Also, Etihad may not be getting much out of its partnership with American Airlines. The purpose of a partnership like the one between Etihad and American is for the airlines to feed flights into their respective major hubs while allowing the transport of feeder traffic on international flights to destinations that either aren't served or are served with limited capacity. While Etihad's largest base in the United States is New York-JFK, American Airlines has terminated dozens of domestic and North American flights to/from its JFK-hub in recent years and shifted the airline's focus to premium traffic and serving the needs business travelers.
What a Move to Star Alliance Would Mean for Travelers
If you are a frequent flyer on Etihad Airways and book flights using cash, Etihad joining Star Alliance would likely be a welcomed change. Etihad Airways would, upon joining Star Alliance, offer far more partner flights, allowing Etihad frequent flyers the ability to travel to far more destinations than ever before. Reciprocal elite frequent flyer benefits would also kick in, allowing Etihad's top frequent flyers to experience preferential treatment with most, if not all, Star Alliance members.
However, if you aren't using cash to book flights with Etihad Airways and its partners, the effects of Etihad joining Star Alliance becomes a little more complicated. Obviously, if Etihad cuts ties with American and adds United as a partner, Etihad will no longer allow American Airlines AAdvantage frequent flyers to redeem miles for award flights on Etihad. This would also mean that Etihad Guest Rewards could not be used to book redemptions on American Airlines. Neither AAdvantage frequent flyers or Etihad Airways frequent flyers would be able to earn miles on either airline, which would be quite detrimental to AAdvantage frequent flyers.
United MileagePlus frequent flyers would benefit the most here as Etihad Airways awards would eventually be made available to MileagePlus members. United would also gain a new partner in the Middle East.
It is aworth noting that this isn't the first time that Etihad Airways and Star Alliance have been in the news together. In July 2018, Etihad Airways announced that the airline wanted to codeshare with Star Alliance after it announced plans to restructure.
As of Sunday, Feb. 24 at 1:30 pm the terms of any partnership between United and/or Star Alliance have not been released.
TPG has reached out to Etihad for comment but did not hear back by time of publication.