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MMMondayMemo: AA’s Revenue Based Earnings Start Today
It was announced last year that American would be rolling out a new award chart and a new earning structure. Both were devastating to what was once one of the best loyalty programs out there. What stung more than the devaluations specifically was the lack of warning that they gave us BOTH TIMES. Holy schmoley. Well the 2nd wave of bad news announced AA would switch to a revenue based earnings structure for their RDM ( redeemable mileage). Well get ready for it folks because AA’s revenue based earnings start today.
What are Revenue based earnings?
You will earn RDM ( the miles you can use to redeem for future flights ) based on the below chart:
An example: if your flight from LAX to JFK, in coach, cost you $400
- 4950 miles rountrip
- cost you $400 ( exclusive of government imposed taxes and fees)
- you would earn the following under the new chart ( and under the old chart )
- Base: 2000 miles ( 4950 )
- Gold: 3200 (~6200)
- Platinum: 3600 (9900)
- Executive Platinum: 4400 (9900)
As you can see it’s a big hit across the board for the casual traveller, and potentially a big score for the business traveller who is flying on high priced flights, last minute. Although there is cap of 75,000 miles per ticket…if you’re flying on a ticket that would earn you more miles than that, split it up into two one-ways.
At least AA tells you how many RDM and EQM you will earn now prior to purchase
Here are the details from a booking I’m looking at this fall from Dublin to Los Angeles. There are incredible deals out of Dublin and I found this one for $472 roundtrip. The routing is DUB-LHR-LAX-LHR-DUB. It’s 11912 miles roundtrip. As Platinum, if I were to have flown to flight prior to Today… I’d have earned a 100% bonus on the 11912 or just shy of 24000 AA. Here’s how AA tells you what you’d earn:
Now I’ll earn 2592 miles vs almost 24000. Before this devaluation…I would have earned just shy of a roundtrip domestic on this flight alone. Now I’ll earn about a tenth of it.
EQM will stay the same
This is good news and also means that mileage running will be more about status, if anything at all. However, with the perks of top tier Executive Platinum being diluted, justifying the mileage run becomes an even murkier argument.
There are some exceptions.
Take at look at these exceptions published by AA.com
How does this change my Mileage accrued with Partners?
The simple answer is it makes it a much more complicated task. Every airline is going to have different accrual rates. Here is a look at a couple:
Things that don’t take effect til 2017:
You probably also noticed the EQDs – Don’t worry til 2017
American also announced that they were going to impose minimum spend requirements for elite stats. It hasn’t been revealed to us yet whether or not credit card spend could negate the EQD requirement. If you’re unfamiliar with this, cards like the Delta Reserve have a certain benchmark spend threshold that eliminates having to spend a certain amount of money with Delta to obtain Delta’s top tier Diamond status. If you earn enough EQM with Delta, you will obtain status.
Here’s what it will look like:
- Gold: $3k
- Platinum: $6k
- Platinum Pro: $9k
- Executive Platinum: $12k
You probably noticed that there is a new level of status…Platinum Pro – Don’t worry til 2017
They also announced that they would be debuting a new level of status called Platinum Pro – splitting the difference between Platinum and Executive Platinum.
- You need to accumulate 75K EQM in a calendar year to qualify
- A shown above, spend $9k.
- Will earn 9 miles per dollar ( 1 more than Platinum)
- Auto requested upgrades between North and Central America
- Same as Platinum with 2 free checked bags and One World Sapphire.
Affiliate link via Card Ratings
Chase Sapphire Preferred® Card
The Chase Sapphire Preferred is a great starter card that earns Premium Ultimate Rewards that can be transferred into over a dozen partners many of which are US based.
60k Points after $4k spend in 3 months
Transferrable Chase Ultimate Rewards
If you carry this card alongside Chase’s cashback cards like the Chase Freedom Flex℠and Chase Freedom Unlimited® or the business versions: Ink Business Cash , Ink Business Unlimited you can combine the points into Preferred account and transfer into hotel and airline partners
Annual fee is quite low at $95 a year + you get a 10% anniversary bonus on points + $50 hotel credit in Chase travel.
- 3x on dining
- including eligible delivery services for takeout
- 3x on select streaming services
- 3x on online grocery purchases
- (excluding Target, Walmart and wholesale clubs)
- 5x on all travel purchased through Chase Ultimate Rewards – Chase Travel Portal
- $50 Annual Credit on hotel stays purchased via Ultimate Rewards/Chase Travel
- The begins immediately for new cardmembers and after your account anniversary for existing cardmembers
- 10% Anniversary Bonus
- Every year you keep the card, your total spend will yield a 10% points bonus. If you spend $10k in a year, you’ll get 1k bonus points
- Chase Sapphire Preferred® continues to redeem at 1.25c in the Chase Travel Portal and the slew of other benefits remain in tact including primary rental car insurance, purchase protections, etc.
- Points are transferrable to 13 Ultimate Rewards partners
- Redeem in the Chase Travel center for 1.25 cents per point
- No foreign transaction fees
- Suite of Travel and Purchase Coverage
- Primary rental car coverage is my favorite
We keep an up to date spreadsheet that lists the best ever offers: You can find that spreadsheet here.
Historically 80k is a very, very good offer and hit in both 2022 and 2023. In 2021, we saw the offer hit an all time high of 100k. Who knows if that will ever come back.
Cards that earn flexible points and should be used on the bulk of your purchases.
Cards that earn fixed points in the currency of the airline/hotel and can not be transferred at attractive rates. These cards yield benefits that make it worth keeping, but not necessarily worth putting a lot of your everyday spend on.