An entertaining conversation formed early yesterday evening on Facebook when it was suggested that my analysis of AA’s new premium fare bonus earning was just trying to be contrarian and that it missed out on the value the new rates would bring to AA’s most valuable customers. My view (both before and even more so now) is that the new rates are still AA playing catch up in most cases to the new UA and DL earning rates for higher fares. The high value fliers are going to still do better on UA or DL, I believe. And these are some of the numbers I came up with which I believe represent that.
All fares (except JFK-LAX) were searched based on round trip purchase but published here as one way trips because that’s how I was doing the math in the spreadsheet. The first number for each city pair is the discounted business class fare (generally an “I” fare) and the second is either “C” or “D” and earns the larger bonus. I broke the numbers down by elite status tier to get a feel for where each type of passenger might do better. For the sake of easier math I did not try to back out all the taxes on the UA/DL fares so those numbers will be a little high. Because of that there may be one or two places AA should “win” but it doesn’t. I’ve tried to call attention to those where I notice them.
I chose the cities partly based on what AA used in its examples, partly based on specific routes others suggested favor AA and also based on randomly thinking of city pairs. It is highly non-scientific but there is still some interesting data to show.
For the non-status passenger AA is rather stingy with the bonuses. Passengers on discounted fares get nil and the full-fare tickets get a relatively small bonus. At the $800 price point for JFK-LAX AA might be on par with UA and DL after the latter pair back out taxes but it is close. And for the discounted ticket on a connecting itinerary to Seoul AA wins handily. In pretty much every other situation the revenue-based earning offers better accrual.
The 25K Tier
Fly just enough to get a little elite status? AA might have a couple scenarios which work in your favor. The connecting flights to Seoul once again are winners as is the discounted transcon. And the discounted DFW-EZE trip mightbe competitive after taxes are removed.
The 50k Tier
A bit more status shifts the numbers marginally but, for the most part, the story stays the same.
The 75k Tier
AA doesn’t have a 75k tier but DL and UA do. This creates some interesting adjustments in the numbers. For the discounted JFK-LAX flight it is probably a wash and Seoul is holding on for AA. Also of note is that this is where a round-trip fare would, for the first time in the data, exceed the 75k cap which UA and DL have imposed. That number is still greater than what AA offers in earnings, however.
The 100k Tier
AA and UA both have the 100k tier and AA adds in higher bonus earning under the new program at that point as well. This helps AA become competitive in some markets again, including finally beating the 75k cap on the JFK-SYD trip, assuming the traveler doesn’t buy the full fare as a pair of one-way tickets.
The 125k Tier
Fly enough to hit Diamond with Delta on premium cabin trips? If so there’s a pretty good chance you’ll earn more points under the revenue-based program the company is implementing in 2015.
I’m not opposed to the new bonus structure at all. Like I said before, I think this is the closest AA could get to revenue-based easily without rebuilding the technology handling the systems and they didn’t have time to do that with the merger ongoing. But I still see it as playing catch-up FAR more than getting ahead. Sure, I picked only seven routes to compare but I doubt the numbers are going to look too much different with lots more data.
I suppose it is also worth noting that all the fares chosen are what AA is charging, not the UA or DL rates. If those carriers are flying the route for less money then the earnings will be lower. I suppose it is up to the passengers if they want to pay extra cash just to earn a few more miles in cases where the fares are different.
And then there are the fare sales. If you’re mostly just playing the game and looking to cherry-pick great deals then the premium cabin sales offered up when business travel decreases around holidays then you’re likely to do well with the new bonus rates. But, again, I don’t think those are the passengers the airlines truly want to be chasing and rewarding big.
Finally, there are definitely cases where AA wins in the charts above. I’ve highlighted them and everything. But the cases where they do not win are the ones I find most interesting. When AA comes up short against UA or DL in these numbers it does so with great style and panache. Which is to say it often gets beaten badly. Earning rates 20-50% higher for full-fare tickets are not uncommon with the revenue-based programs. Beyond that, comparing the redemption rates is important but I don’t believe there is one perfect answer there. I definitely don’t believe that any one program is 30-50% more valuable than another one, though a lot of that depends on personal redemption habits.
In the end there is no perfect answer. And it is nice to see AA trying to stay in the game. But I truly believe that’s about all this move buys the AAdvantage program.
Got other city pairs you want me to check? Leave a comment and I’ll put them in to the spreadsheet.
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