This article is Part 3 in a 5-part series we’re running on Middle Age Miles about earning and enjoying elite status on American Airlines, and Executive Platinum status in particular. Our 5 articles are:
* Part 1: Lessons and Strategies from My 2018 Journey to AA Executive Platinum Status
* Part 2: Diary of a Mileage Run, 2018 Edition: Seattle-to-Phoenix and Back
* Part 3: The Value We Get from AA Executive Platinum Status
* Part 4: Combining 2 Tricks for Massive Savings and AA Elite Qualification Miles/Dollars – Originate in Europe & Buy Biz Class Partner Tickets
* Part 5: Our Plans and Strategies for AA Elite Status in 2019
If you’ve read a few Middle Age Miles articles, you’ve probably figured out a couple of things about us:
- One, we love to quantify things. Quantification makes us exercise focused thought on our points-and-miles activities that it’s otherwise easy to brush over. It helps us determine exactly how much value we get out of our points-and-miles activities. It allows us to compare benefits to costs. And it allows us to compare points-and-miles and their related benefits across different programs. All in all, quantification helps us make good decisions in our points-and-miles efforts and keeps us focused on getting great value for our travel dollar always.
- And two, that said, we are somewhat reluctant to quantify the value of some benefits, including the value of elite status in various points-and-miles programs. There are a lot of reasons for this reluctance, including:
- The value of benefits can be very different for different people
- For example, a really tall person may value an extra-legroom economy seat far more highly than a short person.
- Values can be extremely subjective
- I might value a domestic first-class upgrade on a 3-hour flight at $50, but you might value it at $150.
- Some benefits have no reference point for their valuation
- What’s the ability to call the AA Executive Platinum line for a year worth? It doesn’t come with a price tag, and it doesn’t have any true reference points.
- Some benefits will be utilized far more by some people than others
- One AA Executive Platinum benefit is the ability to cancel award reservations and get all my miles reinstated and fees refunded. I might take advantage of this a few times a year, whereas some people may never do it, and some may do it dozens of times.
- What value do you assign to optionality?
- See the previous example about canceling award reservations – what kind of value do you assign to this kind of optionality, and how do you determine that value?
- Values assigned can be somewhat arbitrary
- And valuations can be manipulated to achieve a desired result
- The value of benefits can be very different for different people
From this, I conclude that quantification of the value of elite status and other benefits is:
- (a) very helpful; and
- (b) very hard.
I know, brilliant ☺
So, I always read with interest when a respected blogger or other expert writes an article that tries to quantify the value of elite status or another benefit. A couple of examples come to mind.
One, The Points Guy site (TPG) runs a series of articles on the most popular airline and hotel loyalty programs that they seem to update annually, claiming to tell you the value of elite status in these programs. I always find these articles to (a) be somewhat helpful in reminding me of the benefits of different status levels in the various programs; and (b) usually reach values for elite status and other benefits that are too high, sometimes laughably so. This makes sense to me, because, remember, TPG is owned by Bankrate and it’s in the business of selling you credit cards. TPG has every incentive to puff up the value of points, miles and credit card benefits, so you’ll apply for more credit cards using its affiliate links – and it’s not bashful at all about doing so. Read through that proper lens, most of the TPG valuation articles are interesting, but I find them to be ultimately unhelpful from a valuation perspective.
All that said, I find TPG’s recent article on the value of AA elite status fascinating. Just as I suspected, I find some of the values outright laughable, like valuing AA Gold status at more than $900. Yet at the same time, I think some of the benefits of EXP status are actually undervalued by TPG. I’m considering an entire follow-up article devoted to comparing TPG’s valuations to ours.
Two, Greg the Frequent Miler is a Delta guy, and he recently wrote a very solid article, What Is Delta Elite Status Worth? I found Greg’s analysis to be very thoughtful (as usual for FM) and helpful. One of the techniques that Greg employs is to examine a benefit and ask what you would pay for a one-year subscription to that benefit. This question certainly has an element of subjectivity, and the answers certainly would be different for different people. I don’t think this question is the be-all-end-all.
Take me, for instance. I hate to pay for subscriptions to almost anything. What would I pay for an annual subscription to call the AA Executive Platinum line? Zero. But do I get value out of it? You bet. And take it a step farther – What would I pay for a one-year subscription to a plan that said I’d get first-class upgrades on domestic flights on a space-available basis, with my priority determined by an obscure metric in which I have little-to-no ability to gauge where I rank with respect to other participants? Honestly, I’d pay zero. Or maybe 10 bucks. In any event, not very much. But, domestic first class upgrades are definitely worth something to me.
The other thing that bothers me about this technique is that it feels like a little too much thought-experiment and a little to little real-world. Benefits just aren’t sold in this way in the real world – and most importantly, these benefits aren’t sold in this way. Thus, to the extent benefits really can be reasonably quantified more directly, we’d want to value them directly and set the thought experiment aside.
On the bright side, Greg’s technique at least frames the question in a reasonable way that shouldn’t be prone to over-valuation of benefits. And as a result, I find his article to be a fair, reasonable and thoughtful way to approach the valuation of Delta elite status. And by reading it, I feel like I have a fair handle on those values, even though we rarely fly Delta and have never held Delta elite status.
Our Approach to Valuing AA Executive Platinum Elite Status (and Its Component Benefits)
In valuing AA Executive Platinum (EXP) status and its component benefits here, the first thing we’ll do is determine their value for us. We’ll go through the benefits, and we’ll explain how we personally value each of them. In doing so, we hope to help you come to your own valuations for your own personal situation. We won’t profess to tell you how much EXP status would be worth to you, because we understand that everyone’s circumstances are different.
We’ll use objective valuations as much as possible, and we’ll explain how we get to them. And we may rely on Greg’s thought-experiment as a useful tool to value some benefits.
In any event, throughout our valuation, we’ll explain how and why. Sometimes our answers won’t be satisfactory to everyone, we’re sure – but at least we’ll have helped you think about how you value the benefits.
The other thing we need to decide for our purposes is, what are we valuing EXP against? Against no status at all? Or against some other level of status? For us, even considering only our most core flights, we’d hit AA Platinum status with no additional effort. We might or might not hit Platinum Pro. But Platinum and Platinum Pro (PPro) statuses are very similar. Thus, for purposes of this analysis, we’ll value EXP against PPro status, and where it makes a difference we’ll also point out the additional incremental value over Platinum.
One of our goals here is to make sure we’re making a thoughtful decision as we ponder whether and how hard to pursue re-qualification for EXP status again in 2019. We know that it’s going to cost us some extra money if we want to re-qualify, so we want to be sure we’re making reasoned choices – and, as always here at Middle Age Miles, getting great value for our travel dollars!
The Value We Get from AA Executive Platinum Status
With all that background, let’s go through the benefits of AA EXP status and determine our values for each.
First, let’s dispense with a number of EXP benefits that don’t add anything to our valuation, for a variety of reasons:
- Complimentary Main Cabin Extra (MCE) & Preferred seats – This benefit actually has a huge value to us. We mostly buy and fly in Coach, and MCE seating makes a world of difference to us. However, this benefit is the same for EXP, PPro, and Platinum, so for purposes of this analysis we’ll ignore it.
- 3 free checked bags – PPro and Platinum each get 2 checked bags, and we’ve never checked a third bag.
- Additional rewards starting at 150k Elite Qualifying Miles (EQMs) – We’ve barely been getting to 100k EQMs, so 150k seems out of the question.
- Priority Boarding – EXP boards in Group 2, whereas PPro and Platinum board in Group 3. We actually like boarding no later than Group 2, as it’s nice to get aboard sooner and Group 2 is a little less hectic than later groups. But I don’t think we’ve ever encountered a situation where we wouldn’t be able to stow bags or do anything else we needed if we’d boarded in Group 3. This has a little intangible value to us, but for purposes of this valuation, we’re going to ignore it.
- Complimentary Same-Day Standby – This is a benefit that actually has some value to us, but all AA elites get it, so for purposes of this analysis we’ll ignore it.
- Waived ticketing service charge – We’ve never actually used this, and we generally prefer to book our own tickets online, so we’re going to call it a zero. But we do understand that it’s useful.
- Guaranteed availability in Main Cabin – Never used it and not likely to do so.
- Waitlist priority for purchased First & Business Class – Same, never used it and not likely to do so.
- Expanded award seat availability on AA – This is listed as an official benefit, but we’ve never used this and I’ve read many reports that it either doesn’t exist or is so obscure that it’s not worth the effort to try to chase it down.
- Access to the Executive Platinum telephone line – I love the EXP phone line reps. They’ve truly been great to us during the year-plus that we’ve had EXP status. But I’m not sure I’d pay an additional amount for access to this line, I don’t want to try to quantify a value for it, and even if I did, the amount wouldn’t be material to this analysis. So instead, we’ll give a huge shout-out and thank you to all of the great EXP phone reps who have helped us.
Next, let’s talk about 2 benefits that EXP and PPro status holders both have, but that are not available to Platinum members:
1. Unlimited complimentary auto-requested upgrades to domestic first class
Of course, first-class upgrades are one of the key benefits of elite status with any airline, so this is an important benefit. It’s also important to note that, although both EXP and PPro are entitled to this benefit, it’s more beneficial to EXPs because (a) EXPs rank higher on the upgrade priority list and will receive more upgrades than PPro’s; and (b) EXPs take more flights than PPro’s and will receive more upgrades than PPro’s for that reason as well.
I flew 44 upgrade-eligible domestic segments as an EXP during 2018. I was upgraded 14 times – 9 on mainline jet flights, and 5 on regional jets. That’s a 32% upgrade rate, which seems pretty low for a top-tier flyer. (And as I write this, I’m 0-for-5 in 2019.)
Frankly, these uncertain domestic upgrades aren’t worth too much for us anyway. The regional jet flights don’t have food; just the snack basket (which usually has something good, but it’s just a packaged snack or two). We’d generally just as soon have the complimentary snack box as an EXP in the Main Cabin, as opposed to whatever meal’s being served up front. And we don’t generally drink on planes, although we’ll occasionally have one (which we can do in Main Cabin too, if we ask at the right time).
Also, Philly and I value sitting together more than either of us individually values an upgrade; there were a couple of times last year where we declined an upgrade when only one of us would have cleared.
The extra space in first is nice, though, and it’s worth something. It’s especially nice when the upgrade clears in advance, so you can be prepared for it and perhaps even pre-order a meal.
I have a hard time valuing these upgrades. $50 for a regional jet upgrade and $100 for a mainline jet seem too high (remembering that we’re not earning any extra EQMs or EQDs as a result of these upgrades); $25 and $50 seem a little low. I’m going to say roughly $30-35 for a regional jet and $60-70 for a mainline flight.
And without any more data to go on, I’ll say that our upgrade experience and numbers of flights in 2018 were typical for us. We’ll call it 8-10 mainline upgrades and 4-6 regional jet upgrades per year.
That would give us a range of $600 to $910 total value of all upgrades. How many would we have received if we were only PPro? It’s impossible to know. Let’s arbitrarily say half. (It might be higher on regional jets and lower on the mainline, but we just don’t know.)
If we take the midpoint of our range of total value, which is about $750, and cut it half, we end up with an incremental value of $375 a year for domestic upgrades, for EXP over PPro. The incremental value of EXP over Platinum is even higher as Platinums wouldn’t be upgraded as often. We’ll arbitrarily cut the value in half again (that is, bringing us to 25% of the total value), and round a bit to say that the incremental value is $550 a year for domestic upgrades, for EXP over Platinum.
2. Complimentary Same-Day Confirmed Flight Change
EXPs and PPro’s both have this benefit, but Platinums do not. (Platinum and Gold members have complimentary same-day stand-by, but that’s no substitute for confirming in advance.) There’s no difference in priority between EXPs and PPro’s; rather, it’s first-come, first-served, as long as there’s confirmable space (fare class “E”) available on the flight that you want to switch onto. The new flight must depart on the same day as your original flight, and you must be within 24 hours of the departure time of the new flight for the confirmed flight change to be available.
We use this benefit fairly regularly. I don’t have an exact count, but I suspect that we used it approximately 6 times during 2018. There are 2 reasons we might want to switch – one, to move to a flight with a more convenient time; or two, to book a cheaper flight and then move to one that would have been more expensive to purchase outright. Both types of uses are valuable, but the latter can be used strategically to directly save money on flights.
You have to be strategic and careful about when to use this benefit, making a solid educated guess that space will be available to change into, and also that you’re saving enough money to make it worth it. And if it’s critically important to get to where you’re going at a certain time, don’t risk same-day flight change at all. But when it works, it can result in great savings. We’ve certainly saved $200-300 using this benefit at times.
I wish I had more accurate records of when we’ve used Same-Day Confirmed Change and how much we saved. For last year, I’ll stick with my estimate of 6 uses. This number also seems like a good estimate going forward; we’ve already used Same-Day Confirmed Change once in 2019 and we have another use in mind coming up soon.
I’ll conservatively estimate that we saved at least $125 on average (I think this is very conservative; we typically wouldn’t do this unless it resulted in savings of more than $100, and I know we had at least a couple of instances where we saved in the $200-300 range.)
With those numbers, we’re looking at a value of this benefit in the range of $750 annually over Platinum (but $0 over PPro).
The next 6 benefits are available exclusively to EXP members, and not any other lower status levels. Thus, we’ll simply assess their overall value, which will be equivalent to their incremental value above PPro.
3. Four Systemwide Upgrades (SWUs)
With AA EXP status, you get 4 SWUs. Each SWU can be used to upgrade a one-way portion of a paid ticket on AA-marketed and operated flights, up to 3 segments. Upgrades can be:
- Economy to Business Class;
- Premium Economy to Business Class; or
- Business Class to First Class
Upgrade award inventory (fare class C) must be available in order for the upgrade to clear. If it’s not immediately available when you book, you can be placed on a waitlist, and your SWU will automatically clear if and when upgrade space becomes available.
Our current “normal” travel pattern generally has us traveling internationally 3 or 4 times a year, primarily to Europe. We’re also reasonably good at making educated guesses about when SWUs are likely to clear on these flights. In 2018, we used our 8 total SWUs on two round-trip trans-atlantic flights – between Philadelphia (PHL) and Prague (PRG) on one trip, and between DFW and London Heathrow (LHR) on another. We’ll probably be trying to use SWUs in a similar fashion going forward, on flights to and from Europe.
Let’s start by discussing how we don’t value SWUs. One way would be to say that a “normal” round-trip economy fare between DFW and Europe would be $1,000-1,500, whereas a “normal” round-trip business fare would be around $4,000-4,500. One *could* say that the difference in price is about $3,000, or $1,500 each way, and thereby conclude that an SWU is worth about $1,500. But we’d say that this method dramatically overvalues SWUs. One, the paid fare guarantees a business seat, whereas using an SWU is generally just a hope for a business seat (aside from the rare occasion where upgrade space is available at the time of booking). Two, the paid business fare earns many more EQMs, EQDs and redeemable AA miles than the “economy + SWU” ticket. And three, personally we’d never actually pay $4,000+ out of pocket for a business class ticket; our limit is probably in the $2,000-2,500 range.
Now let’s focus on actually valuing the SWUs. When we actually purchase paid fares to Europe (including with Amex/Chase/Citi points), we generally pay something like $800-1,100 for Economy, or $1,100-1,500 for Premium Economy. If we’re actually willing to pay $2,500 or close to it for a Business class ticket, then our incremental value from using SWUs to upgrade each leg is somewhere in the range of $1,000-1,700 round-trip (less the extra EQMs/EQDs/Redeemable Miles and the certainty), or $500-850 per SWU. Taking the low end of that range steers us toward assigning a value of $500 per SWU.
We can also sanity-check this value by looking at it another way. AA offers miles-plus-cash upgrades on flights between the US and Europe for 25,000 AA miles plus $350. The miles-plus-cash upgrade is functionally equivalent to using an SWU. Taking our baseline value of 1.25 cents per AA mile, that type of upgrade “costs” $312.50 in AA miles plus $350 cash, for a total of $662.50. We have actually done this before, and we’d very strongly consider doing it again if we didn’t have SWUs to use. This suggests that we *could* value an SWU as high as $662.50.
Thus, we feel like $500 per SWU would be a fair valuation. But just to err on the conservative side, we’re going to deduct another 10% for the uncertainty when using an SWU and call it $450 per SWU. That puts the total annual value of this benefit, with 4 SWUs per year, at $1,800.
4. Cancel-and-Reinstate and Change Award Tickets for Free
We personally find this benefit to be very valuable. This gives us full optionality to book “placeholder” award tickets and know that if we don’t use them, it won’t cost us a thing.
We’ve used this benefit several times during the past year, and it’s proven to be quite useful. Here’s an example of the circumstances in which we’ve used it:
- We booked Saver-level award tickets to and from San Francisco for the College Football National Championship Game, in case Philly’s beloved Notre Dame Fighting Irish made it – but unfortunately, Clemson was a juggernaut in the semi-finals. (We wrote a full article around this trip-planning exercise – Planning Two Fully Cancelable Trips During High-Demand Times – A Case Study in Trip Planning.)
- We were planning to travel on a high-demand weekend and hoping to use a Companion Certificate from our Barclays AA Aviator Silver card, so we booked award flights to make sure we had seats, in case our flights sold out before we received our Certificate.
- We booked Business Class award tickets to Europe at a reasonable Anytime rate, and we were able to cancel them when Saver-level tickets became available for a flight leaving one day earlier.
- We booked other Business Class award tickets to Europe that we were able to cancel when a fare sale made reasonably-priced paid tickets available (and we needed the EQMs & EQDs we’d earn from a paid ticket.
- We have also booked “placeholder” award tickets to return home from Europe, even though we hope to replace them with reasonably-priced paid round-trip tickets that originate in Europe once we can firm up our subsequent trip. (We wrote about this technique in How to Use Flight Tickets Originating in Europe to Save Money on Your Travels.) Having the award ticket booked gives us some comfort that we won’t find ourselves “stranded” at the end of our trip if our other plans don’t work out.
- I booked a domestic economy award ticket on a day when I was “on call” for jury duty, and I was able to cancel and get my miles and fees back when I did have to actually report to court.
Needless to say, we’ve found this benefit to be incredibly helpful over the 13 months it’s been available to us. But how much, quantitatively, is it worth?
There’s no direct dollar value savings attributable to this benefit. We suppose that one way to look at it would be to use the cost of refundable tickets (as that’s basically what we’re doing here) as a guide. But that would undoubtedly overvalue this benefit in a huge way.
This is a situation where we believe that Frequent Miler’s “how much would you pay for a one-year subscription to this benefit” framework is helpful. When we ask the question this way, we feel comfortable answering that we’d pay $200 easily. We might pay $300 or even a little more.
Given the “how much would you pay” thought experiment and the great value we’ve gotten out of this benefit, we’re going to value it at $250 to us. This may be a bit conservative, but it seems quite reasonable.
5. 120% EXP Elite Bonus on Redeemable Miles
This one should be pretty easy to value. We receive 11 AA redeemable miles per dollar as EXP, whereas PPro receives 9 and Platinum receives 8. The incremental difference is 2 AA miles/dollar vs PPro and 3 AA miles/dollar vs Platinum.
We’re going to peg our spend at $12,000 here. That’s the minimum spend we’d need to re-qualify for EXP during 2019, assuming that we also earned $3,000 EQDs through credit card spend. Setting aside some nuance about how we might get to $12k EQDs while spending a little less than $12k, this seems fair.
Our incremental value of this benefit versus PPro, then, is 2 * $12k = 24,000 AA miles, and versus Platinum it’s 3 * $12k = 36,000 AA miles.
Using our baseline value of 1.25 cents per AA mile, the incremental value of this EXP benefit over PPro is $300, and the incremental value over Platinum is $450.
6. Complimentary Snack & Alcoholic Beverage in Main Cabin
We actually don’t drink much on flights. We’ll have the occasional drink on a domestic flight (think flying into Las Vegas at night), and we’ll sometimes pick up a little bottle or two to take home. So for us, there’s some benefit to the alcohol, but not a lot.
On the other hand, we thoroughly enjoy the snacks and pick one up on almost every flight in economy. We especially like the snack boxes and the fruit & cheese tray. Sometimes we’ll bring them home or take them to one of the Middle Age Miles kids if we’re visiting them, but often we’re eating them on the plane.
Although most of the boxes cost a bit more, we’re going to give this benefit a value of about $6 per flight. We’ll estimate that we’d have about 30 flights a year in economy where snacks and drinks are offered. That would give us a value of $180 for this benefit, and we’ll round it up to $200 to account for a few alcoholic beverages.
7. Complimentary Upgrades on Award Tickets
We’ve never actually used this benefit, but it’s certainly worth something. We gave upgrades a value of $60-70 on mainline flights and $30-35 on regional jets. If we just assume that this benefit might come into play once a year, we’ll round it to an annual value of $50.
8. First Class OneWorld Lounge Access
AA Platinums and up get access to Business Class OneWorld (OW) lounges, but EXPs also get access to First Class OW lounges. This is tough to value. Again, it’s worth something, but not a lot. We’ve actually used this benefit once, at the Cathay Pacific First Class lounge at LHR. I thought it was great; Philly was less excited. And it’s hard to tell the difference versus if we’d been just down the hall in the Cathay Business Class lounge. There also aren’t too many First Class OW lounges anywhere, much less where we’re likely to be traveling.
We’re going to assign this some value, but it’s fairly minimal. Given that I liked the Cathay First Class lounge at LHR, and there’s a decent chance that our normal travel patterns would take us there again, we’ll assign this benefit an annual value of $50.
Totaling up the values we assigned to the various EXP benefits, we come up with incremental values for EXP of:
- $3,025 over Platinum Pro; and
- $4,100 over Platinum.
Notably, more than half of the incremental value of EXP over Platinum Pro comes from the 4 SWUs – so if you’re not getting the same amount of value from SWUs that we are, then you need to discount the value accordingly. And frankly, as we said at the outset of this article, you should value each of the EXP benefits based on your own personal circumstances, and not ours!
This valuation is pretty much in line with what we expected before undertaking this more thorough analysis. I don’t think that’s merely the result of self-fulfilling prophecy.
The results here justify to us, in our own particular circumstances, that we can feel fine about spending some extra money if needed, merely to achieve EXP status. We wouldn’t say that spending an extra $3,000 to get from Platinum Pro to EXP is a good idea. But it seems reasonable to spend an extra $1,500 – maybe even up to $2,000 – to get access to this basket of benefits.
We hope you’ve enjoyed our article about the value of AA Executive Platinum status to us, and we hope you find it helpful in your own planning and decision-making process.
Do you have additional thoughts on our valuation or rationale? Are we crazy for putting this much thought and effort into this? Please share your own insights with us in the Comments!
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