American Airlines To Reward Passengers With Increase In Mileage Earnings

American Airlines is focused on growing membership of its frequent-flier program. The news follows the airline’s discovery that more than half of its revenue last year came from its most loyal passengers.

Exploring solutions to increasing membership, the airline aims to boost revenue from the program by 15% this year. One initiative is to provide more incentives to members who choose to spend more on the carrier’s premium products.

More are buying premium?

During American’s Investor Day on March 4th, executives shared some of the airline’s ambitions for 2024. A large focus was on its award-winning AAdvantage program and how to improve it. According to Skift, about 65% of American’s revenue came from its frequent fliers in 2023. Among that amount, one quarter reportedly consisted of AAdvantage members who did not spend on first class fares, premium economy seats, or one of the airline’s co-branded credit cards. In a report from View From The Wing, American said only 45% of its customers buy the lowest fare.

Regardless of the amount, American’s Chief Commercial Officer, Vasu Raja, explained that the airline wants to cater its premium products to travelers, which could attract non-AAdvantage members to consider a membership.

“They want to be rewarded for actually buying higher-value products and services,” Raja said, according to Skift.

American anticipates its earnings from premium products and frequent-flier membership will increase throughout the decade. This year, the airline expects 80% of its revenue will be generated solely from AAdvantage and premium purchases. According to the airline, 55% reportedly came from premium products, while 45% resulted in non-premium purchases.

Possibly raising mileage earnings

Co-branded credit cards with Citi Bank and Barclays have allowed American to offer a selection of cards for frequent fliers. The airline hinted that mileage earning may increase – another strategy for growing AAdvantage membership. According to View From The Wing, the top earning rate for status members booking eligible fares is 11 miles per dollar.

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The current Citi Executive card provides four miles per dollar spent, meaning the most premium status members can receive 15 miles per dollar. However, American indicated that it may be increased to 16.

Other strategies

American also recently changed the rules of access to its Admirals Club lounges or Flagship lounges – allowing AAdvantage members to buy one-day passes to the lounges on the day of their flight. Members also have the ability to hold a flight for 24 hours without purchasing, and fly standby on domestic flights without an additional charge, all of which would be strategies to appeal membership to non-members.

Photo: Markus Mainka | Shutterstock

However, a focus on premium products would not be possible without a retrofit. American also announced that it would overhaul the interior of its Airbus A319 and A320s to feature more first class seats.

“American’s A319 fleet will be outfitted with more premium seats for a total of 12 domestic first class seats,” the airline said on Monday. “The A320 fleet retrofits will increase the aircraft’s domestic first class seat count to 16.”

The retrofit will also feature power plugs at every seat and larger overhead bins.

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