Summary

• American Airlines now offers a new low-tier status (reward level) at just 15,000 loyalty points.
• These unique rewards cater to a different kind of traveler and include boarding in group 5.
• This new status level incentivizes loyalty, leveraging small benefits to encourage continued flying.

Airline loyalty programs are a unique tool used by carriers to incentivize passengers to continue flying a given carrier, even when it may be against their immediate financial interests. Primarily, these kinds of programs cater to those travelers who are consistently flying in premium cabins, who are most commonly traveling for business.

The corporate traveler provides a unique piece of value for airlines, as they do not pay for their own tickets and are thus consistently willing to spend money on premium fares. As a result, carriers have been quick to introduce the concept of status, something which allows special benefits to be conveyed to those who have earned the right to claim such premium benefits.

US legacy carrier American Airlines, which stands out as the world's largest carrier in terms of passengers carried, is no different from others in the industry and has an award-winning loyalty program, AAdvantage, which, as one would expect, conveys special benefits to the most loyal passengers. But recently, American has broken the industry standard for legacy carriers by offering status at a significantly lower threshold.

Status, traditionally, has been for those who fly at least a dozen times per year, or invest heavily in an airline's premium credit card offerings. American Airlines, however, has introduced a lower threshold level of status which can be achieved with significantly less effort and confers far fewer benefits than traditional elite status. In this article, we will take a deeper look at the newest addition to American's elite status system.

The purpose of status

In order to understand exactly why American's new low-tier status is game-changing, it is important to thoroughly examine the purpose that elite status serves for carriers. The benefits that come along with such levels of loyalty are made to incentivize high-paying travelers to continue spending large sums on travel with a certain carrier.

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As previously mentioned, the primary demographic for which airline status matters is high-spending business travelers, whose pockets are traditionally deep. As a result, traditional legacy carrier status benefit schemes are meant to entice these passengers with lavish benefits.

The lowest tier of Delta Air Lines' SkyMiles program status system, silver Medallion, provides passengers with unlimited complimentary upgrades to premium cabins on almost all domestic flights and select international services. Furthermore, the benefits offered can include elite status on partner airlines, priority boarding, higher mileage accrual rates, and more.

At higher echelons of the status system, passengers can even attain lounge access, the ability to gift status to friends and family, and flight credits in the hundreds of dollars. American Airlines' AAdvantage program used to be roughly the same, offering similar benefits to members at the gold status level.

At 40,000 loyalty points, which American Airlines frequent flyers can earn on any flight, as well as through purchases on cobranded credit cards or with other partners, one is entitled to AAdvantage Gold status. At this tier, passengers can enjoy complimentary same-day upgrades and other premium benefits in line with the industry's standards. According to the AAdvantage website, the carrier's premium tiers of status have traditionally been as follows:

A new reward level

Recently, however, the carrier made adjustments to its status scheme, offering a new level of rewards at just 15,000 loyalty points, a low-tier status that does not even have an official name. Immediately, one can recognize that this level of status is relatively easy to earn and would only involve spending a few hundred per month on a cobranded credit card and flying American in economy a number of times.

As a result, the benefit caters to a significantly different kind of traveler than the traditional high-spending corporate flyer. Unexpectedly, the new reward level only offers a couple of benefits, ones which actually indicate a strong shift in the nature of how airlines operate.

Those who achieve this unique reward tier will be offered boarding in group 5, which does offer an improvement over group 6, where standard AAdvantage members board. Furthermore, passengers are offered a choice between priority benefits and group 4 boarding for a single trip, or five preferred seat coupons, according to the American Airlines website.

What's the point?

These may seem like such limited benefits that it makes one wonder: what exactly is the point of this low tier of status? The answer is rather complex and demonstrates how significantly the industry has changed over the years.

Amid the rise of ultra-low-cost airlines, legacy carriers like Delta, American and United have been forced to innovate their product offerings, and, as a result, have instituted bottom-of-the-line fare classes like basic economy. Thus, elevating the inflight experience can be as simple as offering loyal flyers seat selection without a fee, or slightly better boarding.

Nowadays, an economy ticket is not just an economy ticket, as there may be dozens of different fare classes within the economy cabin. As a result, American can leverage smaller benefits like upgraded boarding or preferred seat selection to incentivize passengers to continue flying.

Most importantly, these passengers can feel rewarded for their consistent loyalty to American Airlines, incentivizing them to continue flying, even if they are unlikely to ever reach the more premium AAdvantage Gold threshold. Across the board, this new reward level allows American to capitalize on the drastically different experiences of those flying in economy and make sure passengers continue to fly the airline even when it may not be the most convenient or cheapest option.