American Airlines introduced premium economy award redemptions today for AAdvantage members. There lies the key to making AA an even more valuable loyalty program for customers, not to mention a great source of additional revenue.
While some still question the viability of the business model, premium economy is proliferating. The “Big Three” in the USA have finally embraced it and airline across the world are adding premium economy cabins as a middle-of-the-road option between economy class and business class.
While the lobster and châteaubriand may be gone, the business class of today is undeniably more spacious and comfortable than the first class of yesteryear. Thus, the first/business/coach model has morphed into a business/premium economy/economy model for many carriers.
For loyalty members of American, Delta, or United it is currently not possible to use your miles for premium economy redemptions on partner carriers. Imagine if you could book these seats or a combo of these seats, just like you would a business or economy class ticket?
Say you wanted to fly from Atlanta to Hong Kong and could use your AA miles to fly to Chicago in AA’s Main Cabin Extra, connect to Tokyo in JAL’s premium economy, then connect to Hong Kong in Cathay Pacific’s premium economy. Or imagine a trip to Australia in Qantas premium economy or to Europe in British Airways premium economy. Wouldn’t the ability to make these redemptions make your AA miles much more valuable? Wouldn’t that prompt you to put more spending on your AA-branded credit card or buy more AA miles during lucrative promotions?
The answer for me is YES. I’m focusing on AA here because it introduced premium economy redemptions today for flights on its own metal, but the same logic applies for Delta and United as well. There are many premium economy products I would like to try and I would particularly like the ability to mix and match carriers on a single ticket.
View from the Wing noted earlier today that AA actually lost money on flying last quarter. Overall profit was reported only because of AAdvatange and American’s aggressive sale of miles. There’s more money in loyalty programs than flying. American, or at least one of the Big 3, should invest the time and resources into streamlining partner award redemptions in premium economy class.
Will a broad range of premium economy redemptions lead to a price increase for business (and first) class awards? Possibly, but not necessarily…at least not quicker than the process of award chart devaluation we already experience. That’s a risk I am willing to take.
Would you welcome the ability to book premium economy partner awards using your AA miles? How important is it to you?