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American Airlines hits awards travelers with fees

U.S. airline adds fees for awards travelers  Aug 10, 2008

American Airlines, the large U.S. carrier, has changed its frequent-flier program, adding new fees and higher mileage requirements for upgrades and free tickets - the latest sign of cost- cutting in the beleaguered industry.

American's steps, which take effect Oct. 1, came a week after Delta revised its frequent-flier program, including the addition of a three-tier system for travel using awards. The move by American means the first- and third-largest U.S. carriers have added fees or revised their frequent-flier programs.

American did not announce the steps, but informed members of its AAdvantage program of the changes in an e-mail message. It also posted a new fee and mileage schedule on its Web site.

"The disparity between discount and premium-class fares is too great to be offset by miles alone," an American Airlines spokeswoman, Marcy Letourneau, said.

American's program, which celebrated its 25th anniversary in May, is one of the most closely watched. Last year, more than 2.6 million people claimed free tickets on the airline, while 843,000 received upgrades under the AAdvantage program, which has more than 60 million members.

Like other airlines, American is struggling in the face of high prices for jet fuel. It lost $1.16 billion in the second quarter, and has announced cost-cutting moves that included grounding older aircraft and eliminating jobs.

"The increase in fuel has an impact on everything we do right now," Letourneau said. She declined to predict whether the changes would reduce the number of awards issued, but said that "we anticipate that they'll continue to use the program."

Beginning Oct. 1, a one-way upgrade within the United States from a discounted coach seat on American will cost $50, plus 15,000 miles. Previously, American required 15,000 miles each way, but did not charge a fee. A round-trip upgrade will now require a $100 fee, plus 30,000 miles. Flights to several destinations from the United States will require a $350 fee each way, plus 25,000 miles. These places include Japan, Europe and China. American will charge 40,000 miles to India as well as a $350 one-way upgrade fee. Previously, American required 25,000 miles and a $300 fee each way to all those countries, and 40,000 plus $300 to India.

U.S. airline adds fees for awards travelers

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