My wife and I suffered a vacation debacle last month. We had long-standing plans – airplane tickets, lodging, rental car, everything – for a two-week trip to Portugal and Northern Spain. However, two days before the trip, I discovered a big problem* with my passport. Totally my fault, and totally unfixable. We spent the next 24 hours trying to strategize around my screw-up (including a fruitless call to the Portuguese embassy), but then had no choice but to call American Airlines and cancel our trip. To soothe my wife’s tears, I promised that we could use the 100,000 AAdvantage miles refunded from the Portugal trip to go wherever she wanted. Her choice. We booked new flights on American and headed to Kauai four days later.
If you want to know more about our Kauai trip, too bad. You’ll need to wait for a separate post on that, which may or may not be forthcoming. I haven’t decided.
This post is about mileage programs and airlines and the reciprocal nature of loyalty.
Although I regularly fly on many different airlines, I travel on Southwest the most by far, and therefore their Rapid Rewards program is the only mileage program I’ve used extensively. However, when my wife and I entered quittirement two years ago, we decided to prioritize our ability to travel internationally. So we each signed up for American’s AAdvantage credit cards and received a 50,000 mile sign-up bonus. We’ve been stockpiling the AA miles ever since, using only a few here and there for short flights, waiting to throw them all at an exciting one-flight fling with American. Which was supposed to be Portugal and Spain but morphed into Kauai.
Anyway, before this trip, I lacked experience with the AAdvantage program and I didn’t waste any time or energy researching its rules. My plan was to just figure it out as we went, and I sort of assumed that it would be roughly the same experience as using the Southwest Rapid Rewards program (after all, how different can airline mileage programs really be?)
Boy was I dumb. What I found through actual life experience is that in general, and in every single one of the particulars, the AAdvantage program sucks in comparison to the Southwest Rapid Rewards program.
Here is some hard data to help you understand my position:
Our Recent Trip on American Using AAdvantage Miles
- In February 2016 we used AAdvantage miles to book two economy tickets to Portugal. Together, the tickets cost 40,000 miles to get there, and 60,000 miles to return.
- My wife purchased our outgoing tickets using 40,000 of her miles. Her AAadvantage credit card then gave her a 10% redemption bonus of 4,000 miles, and she ended up with 11,451 miles.
- I needed an additional 13,000 miles to buy our return tickets, so my wife transferred 11,000 miles to me at a cost of $137.50, plus a “processing fee” of $15, and I purchased another 2,000 miles from AA at a cost of $59, plus a “processing charge” of $30. I used my 60,000 miles to purchase our return tickets.
Note: In addition to costing buckets of miles, getting the Portugal tickets required us to spend hours – literally hours – looking for flights that didn’t have a ridiculous number of stops or completely untenable layover times (American severely limits your ability to use AAdvantage miles on the better connections).
Fastforward a few months:
We needed to cancel our Portugal trip and buy tickets for a new trip. We knew we had 100,000 miles coming back to us, so we did a lot of research to determine which domestic destinations were available to depart that same week with a purchase cost of 100,000 miles or less. We found tickets to Kauai on American’s website that seemed to work.
- The Kauai tickets cost 45,000 miles outgoing, and 40,000 miles to return.
- The first step was to cancel our Portugal flights and get American to refund our 100,000 miles. They did this, but charged us a “reinstatement fee” of $175.
- After the reinstatement, we discovered that our AAdvantage credit cards had revoked the 6,000 mile (to me) and 4,000 mile (my wife) redemption bonuses that we had received for using our miles to buy the Portugal trip, leaving me with 61,407 miles and my wife with 36,875 — i.e., she did not have enough miles to buy our return tickets. To fill that gap, I transferred 4,000 miles to my wife for a fee of $50, plus a “processing fee” of $15.
- I used 45,000 miles to book our outbound flights to Kauai and discovered that because we wanted to travel that week, American charged me a “processing fee” of $150.
- My wife purchased the return tickets for 40,000 miles, plus a “processing fee” of $75.
Note: As with our original booking, the pain-in-the-ass factor was extremely high in changing the reservation. I spent several hours on the phone with customer service trying to walk them through the changes we needed to make.
In the end, we got to Hawaii using a ton of miles and about $710 in various fees. Of the $710 total fees, only about $250 were reasonable — it makes sense to charge for the purchase of additional miles and to transfer miles to another person. Is it reasonable to charge a “processing fee” on top of the posted per-mile fee? No. Also not reasonable to charge extra processing fees for tickets booked on short notice. Seats on imminent flights are already marked up. Is it reasonable to charge a “reinstatement fee” to get your own miles back after cancelling a flight? Well … it actually doesn’t seem outlandish to charge a fee for a last-minute cancellation, since the airline might not be able to fill those seats. However, American doesn’t charge the fee on only last-minute cancellations, but on ALL cancellations. Even if months in advance of the flight. So, yes, the reinstatement fee as currently structured is a big negative in my assessment of the AAdvantage program.
Now, I’m not saying that all the various fees weren’t disclosed somewhere or that a savvier AAdvantage user might not have been able to avoid some of them. But all the forewarning in the world wouldn’t have made hundreds of dollars in extra fees reasonable and the point of a loyalty program shouldn’t be to reward people who can find the loopholes and screw everyone else. And in a world of finite time and finite resources, my wife and I have to make choices about where we will focus our mileage efforts. Accruing $460 of unreasonable fees in connection with one supposedly “free” flight definitely weighs against AAdvantage and American Airlines.
Now, to contrast that experience with using Southwest miles for flights …
I have been a member of the Southwest frequent flyer program for decades now. It has changed over the years, but it remains consistently easy to use and with very few fees. No fees for making reservations, changing reservations or canceling reservations. It is also simple to book, change or cancel flights over the internet whether you are paying with cash or Rapid Rewards points. You never need to pick up the phone unless you are really confused or trying to do something very complex, and then personal help is free.
For example, our holiday plans were a little uncertain going into November of last year as we were in the process of closing on our new house. I booked a one-way trip from Oakland to OKC for late December just to ensure that, no matter what, I could be with my family in Oklahoma at Christmas. The flight cost 12,983 Rapid Rewards points. However, by early December it was clear that my wife and I would be able to drive to OKC and arrive before Christmas, so I went on the Southwest website and cancelled that flight. Southwest then just credited all 12,983 Rapid Rewards points back into my account. No service fees, penalties or baloney processing charges. I clicked, Southwest’s website did its thing, and they didn’t use it as an opportunity to squeeze me for more money. The trip was cancelled and the miles were back in my account and I was out literally zero dollars, zero points, zero anything for ever having made that reservation. It was just like it never happened, and I was able to later use those same miles to book a different flight in January.
In other words, Southwests treats its customers like we are valuable. They see our problems — changes in our plans, canceling a trip, bags too big to carry on, the need to talk to a human customer service representative — as opportunities to show their loyalty to us. No extra fees for helping us get where we’re going. In contrast, my overwhelming sense with American is that every time we were in a position of weakness they used it to put the proverbial screws to us. “Oh, you can’t take your planned trip? So sorry, that will be $175 to get your miles back. Oh, you want to book a new flight? That will be another $225 in processing fees.” Southwest doesn’t do that. They forego opportunities to make quick dollars from stuck customers and instead focus on making us happy. And it works. Because they treat us well, many of Southwest’s customers will always choose to fly Southwest if at all possible — which I do. I’m fiercely loyal to them, in a way that miles attached to caveats and restrictions and bullshit processing fees will never be able to match.
No, Southwest doesn’t go overseas except to limited destinations in Central and South America. And it doesn’t go to Canada, Alaska or Hawaii. So for exotic trips, I’ll need to use cash. But I (unfortunately) take a lot more boring, domestic flights every year than I do fancy vacations. Places like the Bay Area, Texas, Baltimore, New York, Chicago, Seattle, Colorado, Utah. Wait, not all of those places are all that boring … Cumulatively, the cost of those domestic flights adds up. While it might be more fun to save miles for a fancy international trip, getting multiple domestic flights paid for with mileage rewards can be just as (if not more) valuable.
Yes, I dallied with American and I regret it. Southwest has won me back and it wasn’t even a close competition. My wife and I have both cancelled our AAdvantage credit cards and will re-focus all of our loyalty efforts back towards Southwest.
*Turns out that for certain countries in the EU, including Portugal, if you are flying on a passport from certain other countries, including the United States, your passport must be valid for at least three months from your date of arrival. Even if you are only going to be there for two weeks. Who knew!?!
** I’ve ignored credit card annual fees for this comparison, as both our Southwest and AAdvantage credit cards charge a fairly steep annual fee. I’ve also ignored taxes and government surcharges since they are not within the control of the airline.
***It is important to note, as well, that Southwest does not consider customers using Rapid Rewards to be a lower priority than cash customers. All of their seats, on every flight, are equally available for payment by cash or Rapid Rewards. So you are never forced to sit for seven hours in Dallas waiting for the one flight available to mileage customers while multiple other flights head to OKC with empty seats. That’s a favorite American Airlines tactic for making money and losing customers.
**** Note, if you cancel a nonrefundable ticket on Southwest that was purchased with cash (as opposed to Rapid Rewards), they’ll give you a credit that can be used for any future flight within a year. There is no fee for the cancellation. And Southwest lets all passengers check 2 bags for free. See this chart for a comparison to other airlines.
***** If all of this sounds like overexciting marketing crappola, well it sort of is. I like Southwest and their genuine approach to relationship-based business enough to evangelize for them. However, rest assured all these good feelings are coming from my heart, not my wallet, as I continue to be completely unpaid for my ramblings.
******My wife believes I was too easy on American in this post. She asked me to clarify that my above attempt at reportage is a giant failure in conveying exactly how much she “hates, hates, hates” American Airlines.