American, US Airways merging mile programs in '15

AP News
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Posted: Oct 28, 2014 11:54 AM

DALLAS (AP) — American Airlines and US Airways will combine their frequent flier programs early next year and, for now, still base free flights on how many miles customers fly.

Competitors Delta and United plan to base awards on how much customers spend, which helps travelers who buy expensive first-class and business-class tickets.

But executives of American Airlines Group Inc. said Tuesday that they want to deal with the mechanics of folding the US Airways program into American's AAdvantage before addressing such a major change. The combined program will have about 100 million members.

AAdvantage is the granddaddy of airline frequent-flier programs and was widely copied for three decades. In recent years, however, the trend has been to reward customers who spend the most money — often business travelers who buy costly, last-minute tickets. Leisure travelers usually lose benefits.

Southwest Airlines and JetBlue Airways base awards on spending, and Delta Air Lines and United Airlines will do so beginning next year.

Suzanne Rubin, president of American's reward program, said that the company wanted to work first on the details of combining two programs before considering switching to a spending-based system. She said that American was watching how customers react to changes at other airlines.

The biggest change announced Tuesday will be the way that customers get upgrades. Those who fly at least 100,000 miles a year, the top-level elite members, will continue to get unlimited upgrades on domestic flights.

But once American and US Airways combine their reservations systems late next year, elites at the lower 25,000- and 50,000-mile levels will have to cash in mileage-based upgrade certificates or pay for upgrades on flights longer than 500 miles. That's a loss of a free perk for lower-level US Airways elites.

Those US Airways elites below executive platinum "might say, 'Hey, I spend $20,000 a year on your airline, and now you're going to make me pay for upgrades?" said Brian Karimzad of MileCards.com, a site that tracks travel credit cards and loyalty programs. "That's the segment (American executives) are putting at risk."

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