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In a move that affects millions of members, officials announced Tuesday that the American Airlines’ AAdvantage frequent flyer program will experience little change after the Fort Worth-based airline combines it with US Airways’ Dividend Miles program next year.
Most notably, the airline will continue to award frequent flyer points based on the number of miles flown, unlike both United Airlines and Delta Air Lines which are converting to a revenue-based system next year where customers earn elite status based on how much they pay for their ticket.
“The overall reaction to this from both AAdvantage members and Dividend Miles members is an enormous sigh of relief,” said Tim Winship, publisher of FrequentFlier.com.
While American decided not to make big changes to the program, analysts said it could be adopting a “wait-and-see” approach to see if it can woo away corporate travelers who like the changes at Delta and United.
“As we look to combine the AAdvantage program and the Dividend Miles program, we have been very focused on integrating as quickly as possible the two programs so we can get merger benefits out to our customers and the marketplace as quickly as possible,” said Suzanne Rubin, president of AAdvantage. “Obviously we will, as we always do, watch and monitor what happens in the marketplace now that we’ve seen competitors move to this type of construct.”
Winship said it’s possible that American may just be waiting until 2016 to make the change after it has cleared any technological issues from merging its two programs.
“It would be a radical move on American’s part not to follow Delta and United,” Winship said. “Revenue-based programs really do, from a business standpoint, exactly what loyalty programs were always designed to do which is to disproportionately reward your most profitable customers.”
Combining the frequent flyer programs is the next step in the merger between American and US Airways and will allow members of both programs to match up their accounts and combine mileage balances into one account this spring. There are about 110 million members in the two programs but Rubin expects once the programs are merged there will be closer to 100 million members in AAdvantage.
No changes were made to the award charts for American and US Airways as the carrier kept mileage redemption rates the same for 2015.
AAdvantage members appeared to be pleased with the combined program, commenting on social media that they were happy the program remained a mileage-based earning system.
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“Program merger looks great to me.” wrote Brian Prigge on American’s Facebook page on Tuesday. “Glad to see AAdvantage isn’t losing the pieces that make it unique!”
Dividend Miles members who have had four elite tiers to the program will be moving into American’s three levels — Executive Platinum, Platinum and Gold. And those members will no longer receive unlimited auto-requested upgrades on all flights as they had on US Airways once the two airlines completely integrate operations.
“As a US Platinum flyer with 95 segments this year, this stinks ....why no 4th tier???,” wrote a Dividend Miles member on the web forum FlyerTalk after the announcement was made. “So I should just stop flying AA after 60 segments? Apparently so.”
It will also be more difficult for business travelers who fly short-haul flights to achieve the Executive Platinum level at AAdvantage based on segments. Currently, it only takes 100 segments, or 100,000 qualifying miles, but under the new program flyers will need to earn 120 segments, or 100,000 qualifying miles.
“As we bring these two new networks together and we introduce a lot of shorter distance flights, we thought that change made sense for the program,” Rubin said.
American said it plans to combine customers’ accounts this spring and base their elite status on their combined mileage total valid through February 2016. For Dividend Miles members who do not have an AAdvantage account, American said it will create one for them.
Once the programs are integrated, American said all elite members will receive auto-requested complimentary upgrades on eligible flights less than 500 miles, which is about 34 percent of the departures in the combined network. Elite members will have different benefits on American and US Airways flights until the carriers move to a single reservation system which is expected in late 2015.
Earlier this year, American and US Airways announced reciprocal earning and redemption of miles on either airline which could count to either the AAdvantage or Dividend Miles program.
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