Why American Airlines Executive Platinum was Lucrative
With the major changes to AA elite and earnings system, a lot of the perks of the program came to light. Sure, I spend probably 5-8x more than the average traveler (or about 1/2 of a regular business traveler), but I would be close to break even because of its benefits. To reach the top tier for American Airlines, you need to fly 100k EQM (can be considered butt-in-seat miles) or 120 segments, or 100k EQP. The cheapest way to hit top tier is to fly 100k miles. It can be done for around $4000 but normally my schedule doesn’t permit me to fly out on Tuesdays/Wednesdays and many of my trips were weekend trips to Seattle or LAX, so that bumps up the cost to around $5500. This year I also earned 10k EQM from the Citibank Executive World Elite Mastercard by spending $40k within the calendar year.
Here are some benefits that translate into dollars:
- Because you earn 2x RDM for every mile flown if you are Platinum or Executive Platinum, by flying 100k miles, you would earn 200k miles in one year. This year I only flew about 95k miles, so I earned 190k miles, but with the $40k I spent on the credit card, I earned a total of 230k miles. 200k miles at 1CPM (very conservative valuation, but this is unfortunately at the levels I usually use the points for), that is $2000 worth of value
- 8 Systemwide Upgrades – these are usually worth between $200-$300, depending on when they are offered. There are usually a few people who trade them towards the end of the year (say October) and it expires by end of February so this reduces the value of them. If you offer them in March for expiration of the next February, it will be worth closer to $300. 8 SWU x $200 each is $1600 worth of value.
- Unlimited domestic Upgrades – Since I live in Boston, it can be difficult to clear the upgrade. BOS-DFW is usually very tough because there are a lot of business travel between the two hubs. BOS-LAX is another difficult upgrade because there is only two flights a day. This year, I was upgraded on a total of about 35k domestic flight miles. This was because I usually fly international about half the time. Each 500mi upgrade is $40, so that is about a $2800 benefit. If I flew more domestic flights, this value would be a bit higher. Most people wouldn’t really pay $2800 to upgrade all those flights unless they traveled for business, but it is an appropriate value to be put on it.
- Lounge Benefit – When I fly domestically, I use my Citibank Executive World Elite Mastercard to get into the Admirals club at a price of $400 a year. When I fly international with American Airlines, I am able to use the Admirals Club, along with the fantastic partner lounges around the world. The only one I went to this year was the LATAM lounge in GRU and British Airways Lounge at CDG. I would value the Lounge Benefit to be about $1000, factoring in that many people may not get to use the BA lounge at LHR, The CX Lounge at HKG, the MH Lounge at KUL, QF Lounge at SYD. I came up with the valuation because Priority Club membership is about $500 and the Oneworld Lounge benefit is better than the Priority Club membership. Priority Club has many more lounges, but none of them are nearly as good as the best OW lounges around the world.
To Summarize the benefits of Executive Platinum:
- Value from RDM: $2000
- Value of SWU: $1600
- Value of Domestic Upgrades: $2800
- Value of Lounge Benefit: $1000
- Total: $7400 in benefits
I believe the value of the SWU is a bit lower than what I have there, and the domestic upgrades a bit higher than expected, but all-in-all, the value makes sense. You can break even from the SWU, miles earned and domestic upgrades, assuming you want to fly 100k miles a year. I usually do to run marathons and see the world. There have been a few mileage runs but it is usually to see friends and to get some sun during the winter, especially with the 10 feet of snow we got in Boston.
The perfect mix to maximize the Executive Platinum benefit is to use all 8 SWU on international flights, and then the rest on domestic flights you can upgrade on so you can use all the SWU for a good value and also getting the domestic upgrades as well. That is about a 60/40 international/domestic breakdown, which is close to the mix I fly every year on American.
I’ll be looking at the benefits of the new program in a future post to see what the value would be. With the new earnings ratio of 11mi/$ spent, it’ll be hard to break even with Executive Platinum.