Andrew Harrer | Bloomberg | Getty Images
A Traveler walks past an American Airlines Group Inc. aircraft at Ronald Reagan National Airport (DCA) in Washington, D.C.
If you want to hit the top-tier frequent flyer status on American Airlines, you’ll have to spend more money.
The airline is raising the amount of money customers must spend on tickets to achieve AAdvantage Executive Platinum status from $12,000 to $15,000 annually. The airline notified AAdvantage members on Monday of the change, which takes effect starting Jan. 1.
“In an effort to ensure we reward our best customers with the benefits that are most valuable to them, we are making changes to the way customers qualify for Executive Platinum status, and the benefits they receive when they go beyond this milestone,” an American spokesperson said.
All of the airlines are seeing strong demand right now thanks to the robust economy and a very healthy corporate travel market. American did not disclose how many fewer frequent flyers are likely to hit the higher benchmark for Executive Platinum status.
“This move shows the airlines continue to see healthy demand,” said Susan Donofrio, airline analyst with Macquarie Group. “We are seeing no softness in ticket prices and all seats on a plane now have greater value.”
That means it now costs airlines more to award a seat to a frequent flyer. So the more members who have top-tier status, the more seats airlines will have to award in the future.
American’s move matches United Airlines’ recent decision to raise the threshold frequent flyers must spend every year in order to achieve Premier 1K status. Mileage Plus members will be required to spend at least $15,000 annually with United for top status. Delta’s required spending for its highest status, Diamond Elite, has been $15,000 for some time.
Donofrio said the more restrictive frequent flyer programs, along with airlines raising the cost of checking a first bag, shows the industry is focused on boosting ancillary revenues.
“This is what you get in a market with tight supply and heavy demand,” she said.
Source : CNBC