Posted by Seth on August 24, 2011 under frequent flyer, points | 
For many months now the rumor mill was been swirling with thoughts on changes to the lifetime elite status program offered by American Airlines‘ AAdvantage program. Today those rumors – most of which were accurate – are laid to rest as the company has announced the details of their new lifetime qualification requirements and benefit levels. The new rules go into effect on December 1, 2011.
First up, the qualification requirements:
Base miles earned by flying on American Airlines, American Eagle® or the AmericanConnection® carrier or any eligible AAdvantage program participating airline will count towards Million Miler status. Also, as a limited time offer, one mile for every dollar spent on eligible purchases using the new Citi ExecutiveSM / AAdvantage® World Elite™ MasterCard® credit card that post to billing statements through December 2012 will count toward Million Miler status*. The Citi ExecutiveSM / AAdvantage® World Elite™ MasterCard® credit card account must be open and in good standing by December 1, 2011.
Second, the benefits for reaching those levels:
- At 1,000,000 Million Miler miles, AAdvantage members will receive lifetime AAdvantage Gold® status and 35,000 AAdvantage bonus miles (which, as you know, can be exchanged for eight 500-mile upgrades if that’s what you prefer)
- At 2,000,000 Million Miler miles, AAdvantage members will receive lifetime AAdvantage Platinum® status and four one-way systemwide upgrades
- At each additional Million Miler mile mark, AAdvantage members will receive four additional one-way systemwide upgrades
Finally, any points accrued to your lifetime balance prior to the rules change will still be there.
As noted above, these changes do not come as much of a surprise to anyone paying attention to the program recently. And the changes bring the program much more in line with their competition. That’s not necessarily a good thing for consumers, particularly as previously American offered the easiest qualification to lifetime status of any program out there. Still, it is not hard to understand their desire to move in this direction based on the costs of servicing the ever growing elite population. AAdvantage President Maya Leibman commented to that point rather explicitly in a round table discussion in April.
The qualification options are still reasonable, however, including base miles flown on all AAdvantage airline partners, not just oneworld partners. It does not, however, include any class of service bonus points that might be accrued for flying in premium cabins or on full-fare tickets.
There is also a one year window for earning points on the credit card, assuming you have the right card and the account was open prior to the rules changing on December 1, 2011. The AA American Express cards are excluded from this earning.
Overall, the program is still reasonably competitive. Not nearly as lucrative as it used to be, but also not horrible. And there has been a decent amount of notice provided prior to the downgrade.
Not a great day for folks trying to be lifetime elite on AA without flying, to be sure, but I can think of many ways it could have been worse.
Update (5:33pm EDT 24 Aug 11):
I just realized that only the $450 annual fee credit card gets the spend to still count. Comparable to Continental and their top-end card, though still likely too pricey to justify. I guess it is a bit worse than I previously thought.
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Posted by Seth on June 2, 2011 under frequent flyer, News, points |
The next two months are going to be a fantastic time for folks holding American Express Membership Rewards points and looking for travel awards through the British Airways Executive Club loyalty program. From now through July 31, 2011 transfers are earning a 50% bonus, meaning 1,000 MR points are now worth 1,500 BA points rather than the typical 1,000 rate. This transfer bonus is one of the best offered out of the Membership Rewards program in quite some time.
Is it a coincidence that this promotion came out mere hours after a news article and follow-on social media blitz panning the British Airways program for adding fuel surcharges to their award flights? Maybe so. But that’s fine by me. I’ll take the bonus any way I can get it, especially because I don’t plan on paying those extra fees anyways.
It was great to read the rants and vitriol spewed against BA and other carriers charging similar fees, if for no other reason than it didn’t reflect the whole story. Sure, there are times where those fees are going to apply and they suck when it happens. But there are still a number of times where they do not apply and that’s where the value proposition is of the programs.
Redeeming British Airways points on LAN attracts no YQ surcharge, for example. And if you can find the award seats a ticket from North America to Easter Island, with a stopover in Chile, all in business class can be had for a quite reasonable 80,000 points for the return trip. And with this latest bonus that’s only 54,000 points! Even better is that the award inventory seems to be pretty decent, at least for the days I’m looking to go around New Years.
Time to make a transfer and some bookings!
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Posted by Seth on April 30, 2011 under frequent flyer, points |
Ever wonder what’s going through the minds of the folks running your favorite loyalty programs? Of course; we all do. Ever think you’d see five of the most prominent program leaders sitting in the same room, taking questions from their customers about what makes their programs work and why they have chosen certain specific policies? Me neither.
Last Friday, at the first ever Randy Petersen Travel Executive Summit, a group of us were treated to exactly that. The heads of Delta, American Airlines, United Airlines, Hyatt and American Express Membership Rewards came together for a question and answer session led by Mr. Petersen, by most accounts the guru of loyalty programs. After discussing the history of the programs (we’re celebrating the 30th anniversary of the very first one this month) and taking a walk down memory lane it was time to get to the meat of the discussion. Many questions were asked and the program heads were mostly quite responsive, though there were a number of issues where answers were denied in favor of not violating company policy or SEC regulations. Can’t say I really blame them there.
So what were the highlights of the session? I’ve picked out a few of my favorite nuggets and expanded on those discussions.
The "elites" really are
One of the oft-asked and never answered questions about the airline loyalty programs is just how special are the "elite" customers, the ones flying the most miles, really are. And the airlines held firm this time around as well, refusing to disclose the data. But they did give a couple hints as to what the numbers are.
For United Airlines the population of top-tier elites – Global Services and 1Ks – was described as "small six figures" in size. If that’s anything like the way merger partner Continental describes "mid-year" there is certainly plenty of wiggle room there in terms of nailing down what the number really is, but may more specific than the previous non-disclosures. Foland also made it clear that they do distinguish between their frequent customers and their high value customers and that they have many metrics on which they measure those things. Not surprisingly, the two are not always the same folks.
For Delta the numbers were not presented so much based on how many are elite but rather who generates the revenue for the company. It is a very small number of people that really are the High Value Customers for them, similar to the other carriers. The top 1% of customers are responsible for 10-12% of revenue to the company. Expanding that pool out to the top ~3% of customers doubles the revenue pool to about 25%. It drops off precipitously from there, with the bottom 70% of the customers representing only 40% of the annual revenue. It is no wonder that the companies cater to their best customers; they far and away represent more cash.
Mileage expiry is a big deal, except when it isn’t
Jeff Robertson, the man running Delta‘s SkyMiles program, noted at one point that as a company they strive to do what is right for the customer and for the company, even if sometimes that move costs them a little bit of money. In the case of changing their expiry policy for SkyMiles, there is no doubt that the change had some costs, though Jeff also noted that miles expiring represented the single most significant complaint that they received as an organization. And apparently the cost of not expiring them wasn’t so high so everyone wins, right? That’s Delta’s take on the situation.
The other two airline executives speaking on the panel, Jeff Foland from United Airlines and Maya Lieberman from American Airlines, had a different take. They noted that the purpose of the programs is to keep customers engaged with the brand. If a customer hasn’t been engaged for almost two years the expiry is a great opportunity to bring them back into the fold and remind them of the value of those points they’re holding, way better than just holding the points on the book and hoping the customer comes back eventually. Which is better in the long term for the programs? I guess we’ll all have to wait and find out.
It is also worth noting that if the points accrual is so slow that there’s a two year gap in the process, odds are that the points are a bad investment anyways. A customer showing loyalty with such low frequency is likely to be better served financially by simply being loyal to their wallet and buying the cheapest fare available rather than paying extra to accrue miles in a program.
The folks buying miles aren’t who I thought they were
Pretty much every airline now offers the ability to just buy miles outright. During the booking process, at check-in and in various other transactions along the way the opportunities to buy miles are every growing. The problem with these programs is that they are rarely a good value, at least not in bulk. Every now and then it might make sense to top off an account for an award but just not that often.
That’s why I was surprised to hear the great mileage guru Randy Petersen announce (several times over the course of the events) that he buys the miles at the kiosk nearly every time. He’s got tons already and earns them at a blistering pace, and he’s buying more at almost certainly overpriced levels. Even more surprising was a statistic he shared with the group: Over 50% of the folks buying the miles have elite status on the airline they’re buying from. The people who have the most points are also most aggressive about buying more. I just do not understand that.
Speaking with Gary Leff during a break he related similar tales, including one US Airways Chairman’s Preferred member who buys the miles on every single trip. Sure, he gets some awesome reward redemptions out of the deal, but at what price? Then again, if you’re willing to pay the $4500 cost for the trip and points are the right way to find that price point, why not?
Loyalty programs are sortof a zero-sum game, but it is still possible to win
One of the questions asked of the panel was how it is possible that there are loyalty programs can provide value to the companies as well as the customers. All of the loyalty programs are obviously trying to drive revenue to the company so it is hard to have a situation where everyone can win. Indeed, at the macro level the programs are more or less zero-sum efforts – some customers are going to profit and some will not but overall it will still be a benefit for the programs.
Jeff Foland perhaps summed it up best:
We want our currency and elite status to carry more value for the member tomorrow than it does today. We have to do that against the backdrop of running a fiscally responsible company.
So what does that mean? Well, for starters it means that they really do want some customers to have a chance at winning. It also means that when the good arbitrage situations arise that the customers can exploit there is a pretty good chance that the airlines are going to be closing them up in search of that "fiscally responsible" effort.
There has only been one incident in recent memory that resulted in points (the "currency" Foland is referring to above) actually increasing in value. It doesn’t appear that there are any similar changes on the horizon. So to make sure that the currency value increases it is important to pay attention to the trends in the industry and to make sure you’re redeeming the points, not just accumulating them.
Other bits
There were a number of other interesting things discussed, from the future of lifetime status recognition (unsurprisingly United and American were quite tight-lipped on the topic) to how issuing a credit card can help Hyatt drive heads in beds, their core business focus. Oh, and apparently LOTS of folks like redeeming their Membership Rewards points for toasters and other housewares; such a horrible value.
Neither American nor United would comment on any possible changes that may be coming with their lifetime status levels though Ms. Lieberman did note that the ranks of elites on American are somewhat swollen due to their easier accrual policies. No particularly useful information on what the changes are going to be, other than that they’ll provide plenty of notice and communicate them effectively should anything happen, but otherwise mums the word there.
Delta noted that perhaps the biggest challenge they face from a loyalty program perspective is not the merger of Continental and United, but rather that of AirTran and Southwest. The latter represents a sea change to the competition landscape in Atlanta and the new Rapid Rewards program, part of a trend towards rewarding spend more than miles, is a huge part of that change. What it means for SkyMiles or passengers in Atlanta will be fun to watch in the coming months.
Ultimately I must say that it was a great event, both for the information shared and the networking opportunities in the room. Whether with other travel writers (Ben from Today In The Sky and Brian from The Points Guy were two of the bigger names there, along with Gary Leff who was one of the hosts) or rubbing elbows with the executives who make the decisions about how the programs actually operate, it was a great day for meeting new folks and extending existing relationships.
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Tags: AirTran, American Airlines, American Express, Atlanta, Continental, frequent flyer, Hyatt, Membership Rewards, merger, points, Southwest Airline, United, US Air
Posted by Seth on April 7, 2011 under frequent flyer, News, points |
There was a time that the American Express Platinum Charge Card was a tremendous value for road warriors. The list of benefits was impressive, from airport lounges to point accrual to other perks, like concierge service. And the benefits covered a broad chunk of the travel landscape.
In recent years, however, the shine has started to fade. Some of it was little things, like the concierge service effectively becoming an operator with OpenTable and Google trying to find stuff that might work. There were some big things, too, like partners dropping out of the Membership Rewards program at an alarming pace. Sure, some others showed up, but the value was slipping. When AmEx raised their foreign exchange fees to 2.7% that was yet another reason to keep the card in my wallet rather than whip it out as I wandered the globe; the points just aren’t worth paying that much extra for on every transaction, especially when better cards offer 0% f/x rates.
The final nail in the coffin seemed to be the decision by Continental to withdraw from the Membership Rewards and Airport Lounge programs. This move was announced back in September 2010 and it isn’t much of a surprise considering how tightly Continental has been tied to Chase in recent years. They even have their own premium credit card that includes lounge membership and some other travel benefits, and a similarly high annual fee.
And then AmEx was mostly quiet. There have been some ads and AmEx has shrink-wrapped the AirTrain at Newark touting the features of their Membership Rewards program to its customers at Continental’s hub. But the actual feature set hadn’t really gone anywhere useful. Until now.
First off, the end of foreign exchange fees finally happened. It was promised months ago in competitive response to Chase, Citi and a couple other issuers. Fortunately it has finally happened.
There is also the $200 “fee” credit that can be assigned to any one airline. Designated to offset baggage, food or other fees during a trip, this is a pretty sweet deal. It is not without fine print, but for the most part it is a solid benefit.
To address the lounge issue AmEx added US Airways as a partner last July. That was pretty good, but not so useful for international travel. That move was trumped by the addition this week of Priority Pass Select membership for card holders. The access is only for the primary card holder, not for guests and not for additional gold card holders, but it is still a pretty solid benefit, particularly overseas.
And, just for kicks, AmEx is also giving card holders free enrollment in the Global Entry program. This last one is actually the benefit I’ll probably get the most value out of. Sure, it is only $100, but I almost certainly wouldn’t have paid it myself given that I have not yet had a long line experience where it would have mattered.
Overall, it seems that AmEx really is trying to step up and provide value for the $450 annual fee. I’ve carried the card for nine years now and each year I say that I’ll cancel unless the value is there. They’ve still got me paying and these moves just ensured another year of fees. If I was only ever flying on Continental/United Airlines it would be a harder decision to make. But since I have options and I do fly with other carriers it is an easy one for me. At least this year.
For more details from AmEx on the card benefits check out their new site here.
And if you do not have an AmEx Platinum yet but are intrigued by the possibilities, you can apply for one here. It comes with 50K points for only $1000 spend in the first three months, which pretty much offsets the annual fee, and that’s before you get in to any of the benefits noted above. Definitely worth a look these days.
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Posted by Seth on April 4, 2011 under Trip Reports |
A couple weeks ago on my jaunt to Mauritius I had the great pleasure of flying on South African Airways, with one minor exception: they demanded $300 extra from me at departure to keep flights scheduled around my originally booked times following a schedule change that they initiated. Both twitter and this blog got their attention but the initial email conversations I had with them didn’t get very far and they stood their ground, insisting that it was my problem not theirs. Fortunately time heals some wounds, or at least give folks the chance to reconsider bad decisions. I’m happy to say that they have come full circle on this issue and acknowledged their error.
I received a call from a SAA representative late last week informing me of the good news and apologizing for the confusion. It was a nice chat and I’m glad that we had the opportunity to discuss the issue. The explanation given for why it happened in the first place was a bit weak, particularly given the specific details of the case, but in the long run it is the end results that matter and I got what I should have. It is somewhat disappointing that someone from the public relations side of the house had to “escalate the issue several levels within the organization” just to do what is right, especially when the customer service folks didn’t seem very interested at all. I’m sure the fact that American Express had initially sided with me in the charge dispute didn’t hurt my claim either.
Based on this turnabout on their part and the quality service I received in-flight I’m no longer hesitant to recommend flying with SAA. The product is one of the better long-haul economy experiences I’ve had and, so long as there isn’t a schedule change or you don’t need to deal with the airport agents too much, it really is a decent way to travel. Plus, I get to experience them again – in Business Class this time – on an upcoming award trip. Should be fun.
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Posted by Seth on March 3, 2011 under points |
Ask any mileage junkie their favorite tip for getting large buckets of miles on the cheap and odds are you’ll start to hear stories about credit cards. The bonus miles on offer for enrollment are generally huge relative to the annual fee (more so if said fee is waived for the first year). The catch, of course, is that you also generally have to meet some minimum spend in a few months to get the bonus points. Sometimes that threshold is ridiculously high.
Every now and then, however, an offer comes along with something reasonable, like a $500 spend, to earn the points. When an offer like that smacks me in the face, I go for it, even if the program involved isn’t one I normally invest a lot of effort in for point accrual.
I received an email today from JetBlue once again offering up their co-branded American Express card. I seem to delete these emails once every week or two and don’t think much of it. Today’s however, is different. Today’s is actually a good deal.
In addition to the 10K points for signing up – the standard JetBlue/AmEx offer – today’s comes with a 15K point bonus after only $500 in spend. So for the $40 annual fee and a tiny hit on my credit score I net something around $250 in points from JetBlue. Yeah, I think I’ll take that.
As for finding $500 in spend over the next three months, I think it might be time to visit my friends at the US Mint again. I ‘ve been lamenting that I haven’t had any dollar coins around the house lately and they are a great conversation starter.
I just filled out my application. If you haven’t ever done the TrueBlue card before, now just might be the time. I’ve never seen a promo from them go higher than this.
Click here to apply.
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Posted by Seth on December 21, 2010 under News |
American Express has announced their intention to cut the foreign exchange fee – currently almost 3% – from their two premium credit cards lines, the US-based Platinum and Centurion cards. The fee is currently charged on all transactions that are posted in a currency other than US Dollars. The change is expected to be in effect towards the end of Q1 2011.
The foreign exchange fee is essentially pure profit for the credit card companies so they are generally loathe to waive it. In the face of significant competition from other issuers, however, the company felt it necessary to make the move. Chase has removed the f/x fee from their Hyatt and British Airways cards and Citi has removed it from a couple cards as well. There’s also the Schwab card (now serviced by FIA) that has no f/x fees. Considering that acceptance overseas is also lower for the AmEx products, being uncompetitive in costs was simply too much to make it reasonable for many folks to use it on transactions.
The change is still limited – only for the Platinum and Centurion cards – so the benefit will only apply to folks who are already spending a decent amount of cash annually to carry the card. And depending on which other cards you carry the value proposition for the loyalty points might still tend towards the other cards. But it is certainly nice to no longer be faced with paying an extra 3% for no particular reason at all.
Read more about it here.
Posted by Seth on October 7, 2010 under frequent flyer, News, points |
JetBlue is 10 years old this month and they’re celebrating in a big way. TrueBlue members can earn an extra 10 points per dollar spent for tickets booked online this week for travel between now and November 18th. This translates to 16 points per dollar for all tickets purchased in the promotion period; purchases made with a JetBlue American Express Card will earn 18 points per dollar.
The promotion requires registration (click here) and is only valid for new bookings. Still, more than triple bonus points system-wide is a pretty nice deal. Too bad that my travel for the period is already booked and paid for; I even have a couple segments on JetBlue during the period that could have qualified.
Posted by Seth on September 16, 2010 under All You Can Jet, AYCJ, Trip Reports |
I have previously flown through Sacramento, California but I never left the airport on that trip. Having met a great friend from Sacramento last November, however, I was rather excited by the opportunity to hang out with her again and to actually see a bit more of the city. Among other things. it meant crossing another state capitol off my list as well as two new lines for my collection (LGB-SMF and SMF-JFK).
Flying in to Sacramento was, like pretty much every flight I’ve taken so far with the All You Can Jet pass, smooth and easy. The flight was rather empty – maybe 60/150 seats filled – which gave me the opportunity to spread out across three seats in the back and get a quick nap in. Much needed given the flying schedule I’m on these days. I did wake up in time to enjoy some of the awesome views of the surrounding farmland during our final approach into the airport.
The heart of Sacramento is a grid, making navigation quite easy around town. Add on hourly bus service into town from the airport (20 minutes, $2, at :22 after the hour most of the day) and getting around in Sacramento is phenomenally easy.
First stop on arrival was a farmer’s market that runs in Chavez Park on Wednesdays. I had no idea it was happening and just stumbled upon it as the bus was headed through town. I needed lunch and they were there. It was a meeting made in heaven. After a quick snack I actually had to get some work done so I headed to the local Regus office space. I have the membership through my American Express card. I rarely use it. Still, in cases like this it really proved itself invaluable. Maybe I won’t be cancelling the card after all.
After work wrapped up I finally had a few minutes to walk around town and see the highlights. First up was this funky statue outside the Convention Center:
After that I wandered over to the State Capitol building. Typically impressive.
And then the good stuff got started. I met up with my friend, Karla, and we headed for drinks and dinner. Drinks were at The Shady Lady, a relatively new bar in town. The bar has a speakeasy feel to it, from the pictures on the wall to the dress of the staff to the impeccable drink concoctions being mixed behind the bar. We watched a bunch of a lilac colored drink walk away from the bar and were quite intrigued. The Aviation is a gin-based drink with lemon, sugar and Creme do Violette. It is also quite delicious and, as Karla noted, glows like it is from god in the photo. Seems like a pretty good reason to keep drinking them.
We had to cut ourselves off, however, as we were headed just next door to Magpie’s for dinner. The restaurant is relatively new but the folks at Magpie have been cooking for quite a while. They started as a catering company and haven’t looked back. The food was simply outstanding. Seriously, everything that walked out of the kitchen looked great. The few plates that we managed to get dropped off at our table were divine. I had the risotto with duck. Yummeh!
After that it was off to Old Sacramento for a Yelp! event. Lots more food and drink to be had there, plus guys with flaming swords, face painting and a tickle tunnel. The line for that was too long, unfortunately, as I had to get back to the airport by 10pm for my 10:35pm flight. But we didn’t leave downtown before I was able to snap a (moderately awful) shot of one of the main bridges downtown.
And then one of my least favorite experiences ever, the domestic redeye. A 4:33 flight duration is just not enough time to get anything resembling a reasonable amount of sleep. And I get to do that twice more next week. Just a small sacrifice for the joys of AYCJ.
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Posted by Seth on September 15, 2010 under News |
Continental Airlines and American Express’s Membership Rewards programs have been closely partnered for several years. From point transfers to lounge access for premium cardholders, the relationship was quite beneficial for both parties. At least it seemed to be. The partnership is coming to an end on September 30, 2011.
This move is not much of a surprise to most folks following the merger between Continental and United Airlines or even just the recent moves by Continental with respect to their credit card choices. Indeed, the Continental – American Express relationship has been softening for nearly five years at this point, with fewer promotions between the two programs during that time. Across the same time period the relationship with Chase has been strengthened significantly, with several new products launched. Chase is the issuing bank for both Continental and United’s affinity cards and both carriers recently launched cards that include many similar benefits to those of the premium American Express cards, including airport lounge access and a premium hotel program.
So no more lounge access to Continental Presidents Club lounges (they likely won’t be called that in September 2011 anyways given the merger) and no more transfers to the OnePass program from Membership Rewards. How will AmEx keep the value proposition up for the folks paying $450 or more every year for the card? The company has announced two significant additional benefits that will be added to their portfolio, effective December 1, 2010.
- $200 Airline Fee Credit — Cardmembers can check a bag or enjoy an in-flight meal on American Express. Every year American Express will cover up to $200 of incidental airline fees that are charged on the Cardmember’s enrolled Card on a selected airline. The $200 Airline Fee Credit can apply to fees such as baggage fees, flight change fees, in-flight food and airport lounge day passes.
- 20% Travel Bonus — When Cardmembers use Membership Rewards Pay with Points to pay for part or all of their travel including airlines, hotels, cruises and vacation packages, they will get 20% of those points credited back to their account. For example, if a Cardmember redeems 30,000 points to pay for an airline ticket, American Express will credit 6,000 point to the Membership Rewards Cardmember’s account.
While the Pay with Points program is often a poor value proposition, increasing the yield by 20% is a nice touch. It should be noted that the 20% credit will be issued after the fact rather than as a discount from the original purchase. Minor detail but it can make a difference if you’re just on the cusp of a redemption level.
The Fee Credit is a very nice offer, particularly given the broad range of things that it can be applied to. While some of the fine print remains to be seen (I’m particularly concerned with the “a selected airline” phrase) the idea looks to be pretty solid.
This was a change in the program that is not particularly surprising. And there is over a year to work out the details of how to handle points and annual fee renewal decisions. Plus AmEx came through with some additional benefits to offset the loss. Overall I’d say that both programs handled this about as well as could be expected in the situation.
