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American Airlines To Reward Big Spenders Over Economy Warriors

Northeast Blizzard Causes Flight Delays Across The U.S.Northeast Blizzard Causes Flight Delays Across The U.S.
Many airlines in the United States have shifted their rewards programs from miles to dollars. Joe Raedle—Getty Images

Starting Aug. 1, it’s no longer how many miles you fly, but how many dollars you spend.

American Airlines (AAL) announced Monday it will start rewarding passengers with perks like free flights based on how much money is spent on tickets, not how many miles are flown. The change follows the example of rivals Delta Airlines (DAL) and United Airlines (UAL), as first reported by the Associated Press.

American inferred that they would be making changes back in October, but details were not fully transparent until early this week.

After Delta and United announced their decision to switch to spending-based rewards in 2015, American responded by giving bonuses to high-fare customers. But in order to keep up with competitors, American officials decided that their initial response was not drastic enough.

AAdvantage, American’s frequent flyer program, is the industry’s oldest and largest rewards program. Before, its almost 100 million members earned miles in a simple way: fly one mile, earn one mile. Now, American said most of it’s members will earn five miles for every dollar they spend. That number raises to seven, eight or 11 for elite members- or gold, platinum or executive platinum members.

 

On top of this, miles alone will no longer make you elite. The company also announced that starting Jan. 1, customers will have to hit annual mileage marks and spending minimums. For example, to reach gold status, (the lowest elite level), members must spend at least $3,000.

The shift to spending-based rewards was put on hold after the merger between American Airlines and US Airways a few years back, as American wanted to focus on the integration of the two companies before making the change. According to the Associated Press, American denies that the traditional frequent flyer rewards format was causing the company to loose big-spenders to competitors.

“This was as quick as we could do it,” Bridget Blaise-Shamai, the company’s managing director of loyalty, first told the Associated Press.

Aside from United, Delta, and now American, Southwest Airlines (LUV), JetBlue Airways (JBLU), and Virgin America (VA) also use spending-based rewards.