A short while ago everyone’s favorite travel blogger, ThePointsGuy, wrote about his issue with American Airlines’ new EQD requirement. Essentially ThePointsGuy’s issue with American’s new EQD requirement is with Special Fares. Because he’s booking through Amex travel, he’s earning EQD based on miles flown rather than the cost paid for his tickets. Over time he figures he’ll end up spending much more than $12,000 with American to qualify for Executive Platinum status.
Per ThePointsGuy:
The implementation of Elite Qualifying Dollars (EQDs) and the wonky way that American calculates them. Because I book through Amex Travel (and enjoy changes with no fees due to their special fares with AA), AA classifies my flights using the Special Fares chart, even though I’m paying the same amount as a regular flyer and buying business/first class. I’ve lost out on countless EQDs because of this.
For instance, I recently had to pay 27,800 Membership Rewards ($556) for a one-way business-class flight from Miami (MIA) to New York (JFK). While a cash fare would have netted me around 500 EQDs (as taxes aren’t included in EQD calculations), I only got 218 EQDs based on the Special Fare chart. Year to date I’ve spent $6,083.42 and only gotten 4,117 EQDs, which is INSANE since I purchase almost all business/first class and these “special fares” aren’t even cheap. At this rate I’ll need to spend $17,730 to hit the $12,000 minimum for Executive Platinum. I could spend a boatload on their co-brand cards to earn EQDs, but as I’ll explain below, there’s an opportunity cost to spending on AA co-brand cards and giving up more valuable earn on other cards.
Why This Is An Issue For TPG
I don’t know TPG, but I’m assuming he’s having this issue because unlike us mere mortals when he’s booking travel these days he rarely does so himself. I’m sure there are certain deals or flight that he books personally, but for his everyday travel I’m guessing he calls up his American Express concierge and says “Hello, I need to fly from A to Z on these days and I prefer to fly American.” Moments later a ticketed reservation appears in his American App.
I’m also assuming that ThePointsGuy is buying mostly domestic first class tickets these days due to the prices dropping so significantly. Since the price of domestic premium cabins has dropped so significantly it means more people are paying for the seats upfront which then reduces upgrade changes. So, instead of playing upgrade roulette, TPG simply buys a first class ticket when flying domestically. Also, in the case of the MIA to JFK route, he gets a fully lie flat international business class seat on a 767 for the cost of a standard domestic first class seat.
The result is that TPG is only earning EQD based on the miles flown instead of the price paid. As you can clearly see from the quote above, he estimates if he continues with this practice of buying tickets that he’ll end up spending way more than the $12,000 required to obtain American’s Executive Platinum status.
Why This Isn’t An Issue For Me
Unlike ThePointsGuy, I’m still fairly young and mostly broke. I don’t have $1,000’s of dollars to burn on airfare. So for me, I typically buy extremely cheap long distance flights and purchase the flights as a “special fare” or buy expensive short distance flight as a regular fare. So far this year I’m on track to reach 12,000 EQD while only spending about $6,000-$7,000 on airfare.
I personally love special fares because they allow me to continue searching for cheap long-haul flights and earn a lot of EQD. Also, when I find “cheap” long-haul business class flights I can earn more EQD purchasing the ticket as a special fare if the flight is long enough.
Example 1
Currently I can purchase a business class flight from Chicago (ORD) to London (LHR) [via DUB] with American Airlines for just $2,715. If I buy this ticket as a regular fare, I’ll earn $2,597 EQD and 16,254 EQM. If I buy this ticket as a special fare, I’ll earn at least 20% EQD per mile flown and at least 2 EQM per mile flown. In total buying this ticket as a special fare earns $1,570.4 EQD and just 15,758 EQM. Cleary in this example, I’m better off just buying the business class seat as a regular fare.
Example 2
On the other hand I can also currently purchase the same flights in Economy for just $558. If I purchase as a regular fare I’ll earn just $443 EQD and 8,127 EQM. Purchasing the same flight as a special fare earns $812.7 EQD and the full 8,127 EQM. Clearly I’m better off buying this ticket as a special fare.
As you can see, I love special fares because it gives me a ton of flexibility. I can buy a really cheap economy flight and get great EQD earning rates or buy expensive business class flights as a regular fare and again earn a ton of EQD. Also, I won’t go too deep into Special Fares, but there are great earning rates when flying premium cabins on partner airlines.
My Issue With American Airlines’ New EQD Requirement
EQD clearly represents the amount of money you spend with American in a given year. My issue is that a miles + co-pay upgrade does not yield additional EQD! I’m not expecting to earn the same EQD that I business class ticket would have, but I’d be nice if American added the co-pay as qualifying activity. By doing so I think American loyalists would be happy because of the slight bump in EQD, but also American could end up happy because they are getting AAdvantage members to burn their AAdvantage miles on a redemption which represents fairly terrible value.
I’m not suggesting that American add all money spent with the airline to the EQD calculation, but I think the co-pay for a miles and co-pay upgrade should be included.
Final Thoughts
After speaking with many American loyalists it seems many of us are in the same boat this year. That is we are earning EQD disproportionately slower than EQM. Ideally we’d all be earning $0.12 EQD per mile flow, but it seems most of us are earning EQD closer to $0.08 per mile flow thanks to some incredibly cheap international fares this year. I realize American is never going to allow the co-pay portion of a miles and co-pay upgrade to count toward the EQD requirement, but think of all incidental dollars many spend with American the co-pay makes the most sense to actually count as EQD. Also by doing so I’d imagine more AAdvantage members seeking elite status would be willing to burn their AAdvantage Miles to upgrade to business class on international flights.
