American Airlines Does Its Best To Make Sure Frequent Flier Miles Are Totally Worthless

American Airlines is revamping its frequent flier program to include a fee to upgrade economy class tickets to business and first class. In addition to 15k frequent flier miles, AAdvantage members will, starting Oct. 1, have to pay between $50 and $350 for an upgrade.

American Airlines blamed high fuel prices and rising airfares for the change.

“The disparity between discount and premium tickets is too great to be offset by miles alone,” an AA spokesperson said.

From the Dallas Morning News:

Timothy Sieber, an aviation consultant for the Boyd Group in Evergreen Colo., said the high fuel costs are to blame for the new fees, which may be reaching a tipping point.

“At some point, it becomes like a Saturday Night Live skit, where you’re paying for a seat belt and to use the bathroom,” Mr. Sieber said. “They’re running out of things to charge us for.”

American Airlines making more changes to AAdvantage program [Dallas Morning News](Thanks, Travis !)
(Photo: benh )

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  1. timmus says:

    Well, I’m one of those who quit flying American after my miles were cancelled a few years ago and getting stranded at DFW when American decided to cancel the last flight out to my city for no reason (they offered to put me on standby on the morning flight!). Also I’ve heard nothing good about the service in recent years.

    It’s not much of a step up, but I fly Southwest and Continental as much as possible now.

  2. SkokieGuy says:

    Maybe we can use miles to pay for all the new charges and fees?

    Would you like a beverage?
    Will that be cash, credit or miles?
    Miles, yes sir.
    We will deduct 2,500 miles. Thank you for being a valued customer.

  3. esqdork says:

    Under the law of unintended consequences, I wonder what impact this will have on the linked credit cards from which they derive revenues? I certainly am less likely to consider getting one of those mileage-generating credit cards.

  4. TomCruisesTesticles says:

    Great. 5 years down the drain. You know what, I give up. I’m flying Southwest and JetBlue, to hell with it. I don’t fly internationally often anyway

  5. Franklin Comes Alive! says:

    My wife and I saw this coming and blew all our AA frequent flyer miles to buy first class tickets for our honeymoon two years ago. It was a lot of miles, but glad we made that decision.

  6. Techguy1138 says:

    @TomCruisesTesticles:
    Southwest flies international. I took them to Japan.

  7. ARP says:

    I guess we’ll need a total cost to upgrade calculator similar to the total cost to fly calculator (tickets, fees, taxes, luggage, beverage, etc.) people have been mentioning.

    I wish they would just be more upfront about it and just charge us more miles to do something rather then charge us miles and have a surcharge.

  8. missdona says:

    I got that email. I like how they call it a “copayment” like they’re Empire Blue Cross or something.

  9. Techguy1138 says:

    @Techguy1138: DOH! That was Northwest that goes to Japan.

    They did a good job helping me out.

  10. dragonfire81 says:

    Pretty soon they’ll have a “Fee processing fee”, you know to cover the costs of all the system changes required to accomodate all the new fees.

  11. Geekybiker says:

    Yah, I knew the FF programs would be feeling the pain soon. I cashed out the last of my big pool of miles recently and plan to move most of my spending off my mileage cards and onto something with more concrete rewards.

  12. TWinter says:

    @Techguy1138: It would be cool if Southwest were taking over Northwest instead of Delta. Imagine a Southwest run airline with international services and flights to many more cities in the US.

    I sadly can’t fly Southwest very much because they just don’t have the extensive route structure of the traditional airlines.

  13. Jevia says:

    My mother just cashed in a bunch of AA frequent flier miles for a first class ticket to visit my family and was charged the $300 fee. She wasn’t that upset though, figuring she still got a first class ticket for only $300. She probably won’t be flying much more after this upcoming trip anyway and at least with a first class ticket, she won’t have to pay all the extra baggage/drink fees.

  14. dante1337 says:

    @Techguy1138: are you sure about that?? I have flown southwest for years and have never heard about flights to Japan.

  15. humphrmi says:

    @Franklin Comes Alive!: Just a note, the fees for buying a first class ticket (e.g. not upgrading from coach) with miles hasn’t changed. But yeah, they’re probably going to hit that next.

  16. TWinter says:

    @SkokieGuy: You know, allowing people to use miles for fees is not a horrible idea. It would annoy me less than constantly forking over money for stuff, it’s still a reward of sorts for loyal customers, and it whittles away the miles people have to spend on free fights which is ultimately good for the airline’s bottom line.

  17. TWinter says:

    @dante1337: Read his second post it was Northwest not Southwest that flew him to Japan.

  18. jamesdenver says:

    My partner and I have tons of UAL miles. We were saving to go to Australia or do Europe again -but its a job in itself to figure out alliance carriers, routings, dates – and I consider myself pretty travel savvy.

    Rather than horde them I’m using them for a few weekends in New York City in the fall. Why not – I can accumulate more…

  19. pete says:

    This makes no sense. Do first class passengers use more fuel than coach passengers?
    I would think they use less fuel, as a whole, because there are a lot fewer first class seats per foot then coach seats.

  20. beatofhawaii.com says:

    I’m ditching my miles as quickly as possible.

    And yet:

    Fly to Hawaii for $139 RT? One of my readers asked about getting new credit cards offering bonus miles as a way of flying to Hawaii. My response in the link below:

    [beatofhawaii.com]

  21. nicemarmot617 says:

    I don’t even bother with airline miles anymore. JetBlue’s program kinda sucks and I try to avoid all the other airlines like the black plague.

  22. TWinter says:

    @pete: You are forgetting the weight of the plane itself which is far more than the weight of the people inside it.

    The more people you pack onto a plane the less fuel used per person. So the first class passengers do account more fuel use in the sense that three coach passengers could have filled that space while barely increasing the fuel used by the plane.

  23. SadSam says:

    Delta just downgraded their miles program not long ago. As a result, I no longer make an effort to fly Delta or any other airline for FF miles. Mostly I fly SW these days based on best price, schedule, no extra fees.

  24. Cogito Ergo Bibo says:

    @pete: First class passengers don’t use more fuel than coash passengers, but their higher ticket prices offset the cost of more fuel. So I sort of understand the link. What I don’t understand is continually beating your best and (until now) most frequent customers with a stick. Frequent flyer programs just aren’t worth it, anymore. It’s simply a new revenue stream for the airline companies. Better to just research the lowest fare and presume that’s all you’re going to get out of your transaction.

  25. jillian says:

    My method is to get American miles credited over to an airline that DOESN’T suck. I fly Alaska to get home to British Columbia from L.A., and they accept mile credits from American, Delta and Northwest – all of which I fly to get everywhere else in the USA that Alaska doesn’t. Alaska are increasing the number of miles needed for a free flight, but that only puts them on par with most airlines. And it means I don’t have to fly Air Canada – who have been charging more fees than any American airline for years anyways, and are lazy bitches besides.

  26. pete says:

    @TWinter:
    Good point.

  27. TheRealAbsurdist says:

    First US Airways, now American. Brilliant. Alienate your core customers – the business people who keep your company alive. What the hell do these people learn in management school other than how to loot the company and fill their own pockets, anyway?

  28. jamar0303 says:

    How about redeeming another airline’s miles on American flights? Is that possible? If possible I could see people signing up for JAL or another oneworld airline’s mileage program instead of American’s.

  29. rpm773 says:

    @SkokieGuy: That’s not a bad idea, actually. It would allow me to use my miles without the pain of having to endure another trip with American.

    Usually, flying an airline is such a bad experience in one form or another that I’ve never put much value on airline miles.

    What’s that? You’re giving me miles to use toward another trip with your airline? But I’ve had such a lousy time what with the delays and lost luggage, why would I ever want to fly with you again?

  30. jimt says:

    We used all of our AA miles to get first class tix to Argentina before all the fee increases.

    I doubt I’ll be loyal to any one airline in the future because they’re all strapped for cash and all provide horrible service. Air travel has become a nightmare.

    And yes esqdork I’ll be canceling my AAdvantage card and switching to a no fee card.

  31. Chairman-Meow says:

    Hey wait ? aren’t fuel prices dropping ? Hello ? American ? The clue phone rang. Its for you.

  32. kc-guy says:

    This is why I have the cash back rewards program.

  33. dweebster says:

    @kc-guy: Me too. There’s no sense in getting anything but good old inflationary cash out of credit card companies. Why pay a yearly fee to accumulate these airline miles that can be depreciated at the airline’s whim? Ought to be some regulation.

    Good thing is that I’ll spend less flying American or anyone else, bought more than one ticket with them just for fun, thinking the AApoints would someday be useful.

  34. johnfrombrooklyn says:

    Most people earn miles now from using their credit cards. The credit card companies buy the miles from the airlines. I believe American Express saved Delta from bankruptcy a few years ago by buying $750 million worth of miles that they then dish out to their card members. There are two major problems with this situation:

    1. The credit card companies actually charge merchants a higher % when someone uses a “rewards” card. If you go to a store and use a card that pays you miles, the merchant is the one that has to pay a higher fee to the credit card company. So the merchants are the ones that are subsidizing these expensive mile programs. And it’s not like a merchant has a say in the matter. (Can you tell I’m a merchant that thinks this is unfair?)

    2. Airlines can issue as many miles as they want without accounting for that increase in their rewards programs. So more and more people accumulate more miles while having less opportunities to actually use them. In fact, we know that airlines issued 15% more miles last year but actually shrunk the available seats by 20%. (flyertalk.com) We know that right now airlines have issued more miles than they will redeem over the next 5 years. But no authority has ever called them on that. If an airline advertises you can get a ticket for 25,000 miles r/t but then only releases seats that require 50,000 miles r/t, they should be penalized. This should not be legal. It’s akin to the lotteries that advertise you can win a $1 million scratch off but neglect to inform the public the one winner was found two weeks ago. In the meantime, they still sell the lottery tickets.

    If you’re using a credit card to rack up miles, you’re now getting about 0.075 per dollar in value. You can do much much better with other types of reward cards.

  35. Snarkysnake says:

    My two cents…

    Basically,the major airlines have created a counterfeit currency with FF miles that they can print with no restraints,and then devalue them when they have issued too many (like now). This should be illegal because:

    1) They entice you to give up something of real value (REAL money) for something of an uncertain value (because of the continuing devaluation)

    2)They have been irresponsible in handing these out. They know that most can never be redeemed because of restrictions that they put in place after they were earned/bought. A less genteel description of this would be fraud.

    Fools Gold…

  36. scamps says:

    We gave up on American years ago when my husband had to change planes twice because the first two planes randomly caught on fire.

  37. Ausarb says:

    I used to fly a lot for work and accumulated a lot of miles, but haven’t traveled much in the past 4 years. Even four years ago, it was a pain to use mileage for anything and now it is event worse. The thing that aggravates me the most about this though is that FF miles should be inflation proof. It’s like buying a commodity. You got either got them when jet fuel was cheap (net present value anyone?) or you got them recently when you had to pay extra $$$ for everything.

    The entire point being FF miles is to build loyalty. If FF miles are so worthless now then they don’t build loyalty. Why would I fly AA (old planes) versus Continental (newer planes) if the FF miles were so hard to use? I use to consider my airline status and FF miles when choosing airlines, but now I consider FF useless and too hard to use, so I’m not looking at just quality and price. OK, mainly price, but I would gladly pay a $20/travel hour premium not to fly a crappy airline.

  38. t325 says:

    @pete: It’s all about the number of passengers they could fit on a plane. The more passengers, the less fuel used per person. Since first class has fewer seats, it’s more fuel used per person.

    If airlines had their way, they would remove all seats and make the plane standing room only and pack us in from front to back

  39. BarkingLeopard says:

    This is why I don’t even bother with airline miles. My rewards card generates points that I use to get cash back. Even if I could have theoretically gotten a little more value by getting miles, with the uncertainty of the airlines, the hidden fees, and the risks of program changes like this one, it’s not worth it.

    Remember: airlines = scum. airlines + airline miles = blood sucking scum. Take the cash back and save yourself a headache.

  40. Cynicor says:

    I had like 100,000 TWA miles when American ate them a few years ago. Once I was in American, I couldn’t get the same upgrades I used to get. Plus, my company’s travel plan gets these weird coach fare classes that American will not upgrade for ANY combination of miles and cash. That really pisses me off the most.

    I still had this big stack of Advantage miles, however. I set up an account on points.com and converted them all into an Amazon gift certificate, then used them to buy a good flash for my camera.

    Oh! And if you’re going to cash out Amex Membership Rewards, never do it for an Amex gift card. you get like 25% more if you move them to points.com and get an Amazon cert instead.

  41. coren says:

    I don’t see the logic here. Are they providing so many more services now than they were before? What’s changed that the miles aren’t enough anymore? Have the costs of first class and economy risen at a disparate rate (actually, the last seems at least plausible).

    Just admit that you’re jerking people around.

  42. bwcbwc says:

    @Ausarb: Exackitackily. This has to be one of the ultimate ironies of corporate america: Customer loyalty programs that are structured so that the customer gets ripped off. One reason I stay away from miles/points rewards cards as much as possible is because the game is always rigged. On a CC I’ll take cash back over “miles” any day.