American Airlines said Tuesday that it will change its loyalty program in the second half of next year so customers earn frequent-flier miles based on the fares they pay rather than the distance they fly.
The move, long anticipated by investors, makes it harder for travelers to attain elite status and benefits on American by booking flights on the cheap that log thousands of miles. It follows similar changes to the loyalty programs of Delta Air Lines and United Continental.
American had held off on the switch while integrating the loyalty program and reservations platform of subsidiary US Airways so customers and employees were not overwhelmed by change. The two companies merged in 2013 to form the world's largest airline, but the absorption of the smaller airline was only completed last month.
Under the new scheme, frequent fliers will earn five award miles for every dollar spent on tickets, with elite members earning higher amounts, American said in a news release.
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American also said it was lowering the number of miles travelers needed for free flights to destinations in Latin America. Miles needed on some flights to Asia and Europe "will increase due to changes in market pricing and demand," it said.
"It will be accretive to (American's) bottom line as it's a more efficient program and (it's) harder to game the system," Sterne Agee CRT analyst Adam Hackel said.
Shares fell more than 1 percent, although Hackel attributed this to jitters about demand for travel to France in light of attacks Friday in Paris that killed 129 people.
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"This isn’t doomsday," said travel writer Brian Kelly in a post on his website, ThePointsGuy.com. "There will be winners (people who spend more and fly on expensive tickets) and losers (economy-class international flyers)."
