American Airlines Business Extra corporate booking incentive program became less valuable over the last few years as award availability has dried up on the world’s largest carrier. Has a shift in availability returned Business Extra to relevancy?
What is Business Extra?
Major US flag carriers, Delta, United and American all have corporate incentive programs. Each of these incentivizes businesses to book with them by offering a parallel rewards program based on revenue. Business incentive programs award points differently than the frequent flyer programs do and award costs are also different. For example, when Delta used to have an award chart they published, a standard domestic US award was 25,000 Skymiles, their business program, Skybonus charged 85,000 points, though they would award up to 10 miles per dollar spent, again different from their Skymiles program.
Business Extra is American’s business incentive program. They award points on a basis of 1 point per $5 spent on airfare for itineraries ticketed by American (001 ticket stock). Business Extra will award on flights ticketed by American but flown on British Airways, Finnair, Iberia, Japan Airlines and Qantas, but those will add cost over booking with them direct. Business class awards to southern South America (Buenos Aires, Santiago, Rio De Jinero, and Sao Paulo), Europe, and most of Asia cost 7200 points for saver awards ($36,000 in airfare spend excluding taxes and fees). For a small business like mine, multiple awards have taken more than a decade to build. I hold those points in high regard both because of what it took to acquire them and what they will be worth if I am able to maximize my redemptions.
Why Have Business Extra Awards Been So Difficult to Use?
Business Extra award space is available solely using corresponding space in the minimum award price category within Advantage. For example, if saver awards are redeemed from Business Extra, the exact same space should be available using regular Advantage miles, but if any amount is required over those base level prices, you must utilize an anytime award. If an anytime award on American costs 175,000 miles each way, and saver is 70,000 but the cost on AA.com is 125,000 – you can’t book the award under either category.
American has moved more and more to a variable price for awards charging a little more than saver or not releasing space at all. For the last three years I have continued to build my balance of Business Extra points as I can no longer spend them on meaningful rewards despite my best efforts. Saver space has been readily available to Brazil in the US summer months (their winter), offered at the same rate as very expensive flights to Asia. Business class flights to Europe have been as cheap as $1500, sometimes as little as $1100 on JV partner British Airways. When compared with flights to Hong Kong in business class, the value is far less for European flights.
Another reason that awards have been so difficult to use is that redemptions must be on American Airlines metal or their JV (joint venture) partners British Airways, or Iberia. While partners like Japan Airlines allow you to earn Business Extra points (as long as it is ticketed on American ticket stock), Business Extra members can’t utilize award space from Boston, San Diego, JFK, Vancouver and San Francisco where Japan Airlines fly to Tokyo but American doesn’t. Alliance partner Cathay Pacific offers several flights to Hong Kong from LAX, San Francisco, Boston, Vancouver, Toronto, Newark, Washington Dulles and JFK but those flights are also unavailable.
Therein lies the heart of the matter. American neither allows the use of Business Extra awards on their numerous alliance partners, nor releases the space on their limited route network. American offers just one flight to Seoul, two to Hong Kong, a handful to Tokyo, Beijing and Shanghai, but leaves greater China off the menu. Oceania is worse with a single flight to Sydney, nothing to New Zealand and nothing in between excluding Bangkok, Singapore, Kuala Lumpur and on and on. Want to go to Athens? American has a single flight from Philadelphia. You can add several destinations in Europe to the same limited network, many of which are seasonal. Africa is well served by British Airways but because American doesn’t fly there, those flights are off limits too.
With a lack of award seats priced in line with their lowest saver level (or even with anytime prices), limited destinations and route frequency it’s no wonder that valuable Business Extra awards don’t seem very valuable.
Recently American has released award space and left it open. It used to be a hot news item when, for a brief period of time, space on hard-to-come-by routes would open. Sometimes it appeared to be a mistake, perhaps a glitch in as a result of a small schedule change or a new employee hadn’t yet learned the new Advantage rule: never open saver level award space. The toughest awards were always the ones I’d want most, my personal favorite, the Hong Kong routes.
Saver space during several months is available to Hong Kong on American’s LAX flight. This is likely the result of a few things. First, Cathay already has a lot of lift between the two cities. However, now low-cost Hong Kong Airlines has started service featuring an A350 on the route. Does this mean the American route is in trouble? Not necessarily. Upgrades and saver level award space have been consistently better on the LAX-HKG flights than DFW departures since the launch of the route. Dallas has more feed than LAX in the American network and no competition so it is easy to see why those flights would have higher load factors.
However, others have reported smatterings of saver level award space opening and American has stated that this is an area they aim to improve. With this space opening with more regularity and staying open, it returns real value to Advantage and Business Extra. I left American after a lifetime of loyalty as saver space had become unusable, along with the eVIP upgrades I was given as a result of my loyalty as an Executive Platinum member. Last year I let four go to waste hoping against hope that I would be able to use them in the eleventh hour. As that time came and passed, so too did any remaining hope in their program.
The real question is whether or not saver award space will return more broadly and make the program once again useful outside of select routes.
Do you think American’s opening of saver awards enhances value to Business Extra? Does it help American more broadly? Is this a reflection of changes in their membership participation or simply a response to competition?