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American tweaks flier program

by DAVID KOENIG Associated Press

DALLAS - Airline travelers are adjusting to constant turbulence in frequent-flier programs.

American Airlines is the latest to tinker with its program. The Dallas-based carrier on Tuesday announced changes that make it tougher to redeem miles for a flight during busy travel periods, and to check a bag without a fee.

The changes aren't as dramatic as Delta Air Lines Inc.'s recent switch to basing rewards on money spent, not miles flown, but they are just the latest example of airlines giving away less as executives increasingly focus on growing profits.

Gary Leff, a travel blogger and co-founder of frequent-flier website MilePoint, said airlines are lowering the value of miles because planes are full and they would rather sell the seats than give them away.

During the Great Recession, when airlines were struggling and many planes were half-empty, airlines lavished miles on customers who signed up for credit cards or made other purchases. Now the big airlines routinely fill more than 80 percent of their seats.

"There's a real trade-off between giving the seat to a frequent-flier redemption versus cash," Leff said. "Right now the pendulum is swinging toward less generosity rather than more. Much of this is cyclical and economic."

Still, American isn't reducing the value of miles as much as United Continental Holdings Inc. did in November for international trips in first- and business-class, travel experts say. But American's moves will make its program more complicated and could make it easier for the airline to effectively raise prices without consumers noticing.

Some experts also expect American to eventually copy Delta's approach, which will benefit high-spending business travelers but hurt vacationers who hoard miles earned on discount fares.

American and US Airways merged in December and between them have 110 million members in American's AAdvantage - the granddaddy of airline loyalty programs - and US Airways' Dividend Miles. Among the biggest changes announced Tuesday and taking effect for all travel starting on or after June 1:

- No more blackout days for redeeming miles on US Airways, matching the policy at American.

- For U.S. travel on or after June 1, American members can redeem miles for an unrestricted "AAnytime" award at 20,000 miles, 30,000 miles or 50,000 each way instead of the current 25,000-mile flat rate. The less-flexible "MileSAAver"awards will continue to start at 12,500 miles.

- Mile requirements will change on many international trips.

- There will be no more free checked bags for American Airlines passengers traveling on miles they earned or who paid full price for an economy seat.

- Some elite-level frequent fliers on both airlines will get to check one less free bag than before.

- The charge for a second checked bag on trips to South America is being dropped.

Suzanne Rubin, a vice president at American Airlines Group Inc. who oversees the loyalty programs, said in an interview that the changes will increase revenue, but she declined to give a figure.

Brian Karimzad, director of the MileCards.com website, said it's good news that American didn't make many changes to its lowest-level awards. That will help people whose travel plans are flexible enough to shop for the best deal, and contrasts with increases at Delta and United Airlines, he said.

Since American won't disclose how many seats it will make available at the MileSAAver level, Karimzad fears that American will quietly raise prices by cutting the supply and forcing people to redeem more miles for an AAnytime award. He said that's long been the policy at US Airways, and its CEO and other executives now run American.

American's Rubin said that the cheapest awards will remain available on more than half of all travel days but not on popular ones such as the Sunday after Thanksgiving.

Karimzad's advice: Don't hoard your miles - use them quickly because they are more likely to go down than up in value.

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