April 21, 2024

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American Airlines Changes How Miles Are Accrued. What You Need to Know.

4 min read

Earlier this month, American Airlines announced that beginning May 1, it will require travelers to book directly with the airline, partner airlines or “preferred travel agencies” in order to receive points in its loyalty program.

The unprecedented move confused many travelers eager to protect their mileage currency, prompting posts like this one on X: “@AmericanAir your news about earning miles/loyalty points is a bit concerning — we’re loyal to you no matter who we book through!”

In an email, a representative of the airline said that the approved list of travel agencies would not be published until April.

While there is much to be determined about the new policy, a battle for customers between the airline and third-party ticket sellers, which includes online travel agencies like Orbitz, has emerged. Here’s what travelers should know before booking their next flight.

Currently, the biggest domestic carriers — including Delta Air Lines, United Airlines, Southwest Airlines and American — award points and miles to members of their loyalty programs on most tickets regardless of where they are sold.

American’s new rules state that in order to receive miles and points, travelers must book through its website, a Oneworld partner airline or approved travel agencies (with exceptions for those enrolled in its business program, which targets small companies, or with a corporate contract).

Also beginning May 1, fliers booking basic economy fares, the airline’s cheapest fares, may only earn points by booking through American’s website or its airline partners.

According to analysts, this is largely a behind-the-scenes fight over technology.

Travel agencies have long used distribution systems like Sabre and Amadeus to sell airline tickets. But many airlines are interested in using an emerging channel developed by the International Air Transport Association called New Distribution Capability. It offers airlines a more direct means of communicating with passengers, whom they can target with personalized fares or bundled offers not available in the traditional systems, providing opportunities to sell more services.

The “preferred” agencies that American said it will announce in April will be those making a substantial number of bookings on the new platform.

“American is dead set on being a more efficient airline and reducing its cost of sales, so they have issued this new edict and travel agents who choose not to follow along will find themselves on the losing end of the battle,” said Henry Harteveldt, a travel industry analyst and the founder of the Atmosphere Research Group.

Many travel agents object to the speed of adopting a technology they say still has bugs. In a recent letter to the 18,000 member agencies of the American Society of Travel Advisors, the president and chief executive of the trade organization Zane Kerby called it “an underdeveloped technology,” with “basic servicing” issues that include problems with cancellations, booking multiple people on the same itinerary and rebooking.

Mr. Kerby cited a heightened risk to most business travelers using external agencies to make their bookings. “It feels like American Airlines is disenfranchising or willing to disenfranchise its most profitable and lucrative segment, which is the frequent business traveler,” he said.

In American’s new requirement that basic economy fliers book directly with the airline to earn miles, Brian Sumers, who writes the Airline Observer newsletter, sees a play for greater loyalty from thrifty travelers at a time when many airlines have abandoned them. Delta, for instance, no longer awards points to its basic economy passengers. United restricts basic economy fliers to one personal item carried aboard when flying domestically.

American wants those basic economy passengers, Mr. Sumers said. “The end goal is to get people so excited about having AAdvantage points and using them all the time, because that’s where they’re making money.”

If you are accustomed to booking online with the airline directly, earning miles is not endangered.

If you use a travel agency, including online sites like Expedia or Orbitz, check the list of approved agencies when it is published in April.

But even for travelers who are accustomed to D.I.Y. bookings, the new American policy poses some threat to earning miles. If you use a travel agent to plan a more complicated trip — say, an African safari or a trek to Machu Picchu in Peru — make sure the agent is approved by American or be prepared to make the booking yourself to earn miles.

“American is counting on the fact that travelers engaged with AAdvantage will want to remain engaged, so that if their travel agent is not onboard, the customer will find a different travel agent or opt to book directly,” Mr. Harteveldt said.

Experts say commercial aviation is a copycat industry; if a policy is successful, others are likely to follow. But it may not happen quickly in this case.

“There are some very expensive tickets that go through using the older system,” Mr. Sumers said, describing other airlines as “taking a watch-and-wait approach” to see if any defections from former American customers boost their business.



Elaine Glusac

2024-02-28 17:42:09

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