American is at it once again. The company has decided to end its Business Extra small business rewards program and replace it with something less lucrative for the business itself called AAdvantage Business. This does streamline the program and adds benefits for the traveler directly, but it makes life more difficult for companies, and as always, furthers American’s never-ending quest to remove travel agents from the equation.
Business Extra Is Gone
The old Business Extra program evolved over the years — and not just by dropping the extra “A” from what was Business ExtrAA. In its most recent form, any company that did not have a corporate sales agreement with American, had three employees, and spent $5,000 on the airline over the previous year would be eligible to join.
Once the company joined, it would then earn 1 point for every $5 spent by its employees on American and its joint venture partners. Companies could then spend the points for a variety of things.
- Free tickets started at 2,000 points in coach or 3,200 in first for domestic travel and went up from there
- Upgrades were available on American flights
- Employees could be given status with Gold at 3,200 points and Platinum at 6,600 points\
- Points could be used for an Admirals Club day pass (300 points) or annual membership (3,300 points)
- Points could be converted to AAdvantage miles at 1 point becoming 6 miles
You can understand why American would want to do away with a shadow program that had its own redemption system when it could just fold that into AAdvantage. That is what it has done here, with the old program ending on December 15, 2023, and I support the general idea of simplifying and using a single currency. That part makes sense.
AAdvantage Business Rises
The new program, AAdvantage Business, fits within the existing AAdvantage program almost entirely. Any business with 5 employees (up from 3 before) who spend an enterprise total of $5,000 a year can join as long as they don’t already have a corporate sales agreement with American. American’s SVP of Partnership Strategy Scott Laurence tells me that this is really targeted at small businesses, but he told The Company Dime it was targeting both small and medium-sized businesses. It seems pretty clear the goal is bigger than the company lets on.
The Company Dime also reported that some businesses which had a corporate sales agreement had them canceled “given this new program is available to you and your travelers.” This is on top of American’s move earlier this year to purge its mid-size business contracts. If these companies are unable to move their business to another airline, I have no doubt they would be interested in recouping some of what they’ve lost through this program, no matter how minor.
Companies will now earn 1 AAdvantage mile per $1 spent, but they can’t actually spend those miles anywhere. Instead, they would have to transfer miles to an employee’s AAdvantage account where they can be redeemed like any other AAdvantage mile.
As an added sweetener here, employees will get 1 Loyalty Point (for elite qualifying) directly for every dollar spent on their travel as long as the company is a member of the program. So it helps employees to earn status faster which is actually a double-edged sword, as I’ll discuss later.
Of course, there is a credit card component here. If the company has the CitiBusiness AAdvantage Platinum Select Mastercard, then earnings are doubled. You knew there had to be a tie-in with the all-mighty banks.
A Terrible Construction
But wait, there’s one really big caveat here… the only spending that earns is spending done on aa.com, in the AA app, or via American phone reservations. Travel agency bookings are strictly excluded. So when American says “Business travel with benefits everyone will love,” it’s obviously excluding the one piece of the puzzle for which it has not hidden its disdain.
And really, that statement is a lie anyway, because whoever is in charge of travel at a company is not going to be happy about this one bit either. Sure, they can earn AAdvantage miles as an entity, but the rewards are in most cases heavily diluted from what they were in Business Extra. But that’s not even the worst part.
Possibly the most obnoxious challenge for those in charge of travel (admins, procurement, whoever) will be the pressure employees will put on them to not use the company’s preferred booking solution and instead go direct so they can earn their extra loyalty points. This will be a royal pain to manage for those companies that actually do want to manage their travel and rightfully believe that American’s meager travel management tools are not a valid solution for doing so.
Scott continues to pay lip service to agencies, telling me that “agency bookings are out there, it’s something we welcome if agencies are driving value for customers….” That rings hollow. If that were the case, AAdvantage Business would have allowed companies to continue to book through whatever channel they want. Instead, American is trying to force the paying customers to work the way American wants them to work. This is a bad shift in an already bad strategy.
Earlier this year, American said companies could book however they wanted, but if they chose to use a third party, then that intermediary would need to start using the NDC standard or it would lose access to the lowest fares. Even though the systems are not ready, good agencies responded and started using the system despite countless problems in order to make sure their clients could get the same fares they’d find directly with American. Now, American is saying that’s not good enough.
Travel agencies provide a purpose and real value for those companies that choose to engage with them. American is now telling those companies that it doesn’t care what companies want. They shouldn’t use agencies, and if they do, then American will turn the company’s employees against them. It’s a reckless strategy that fits perfectly into everything American has done in the sales arena as of late.