Much to my surprise, just a few weeks after AT&T "generously" upgraded our card to a platinum MasterCard, I received a notification from AT&T's Kevin Leonard that AT&T is dropping their partnership with American Airlines and will no longer offer AAdvantage miles on transactions.

The official end date for this benefit of the card is 31 January, 2005, but I wouldn't be surprised to see a mass migration from AT&T because of this, and I've gotta assume that'll hurt their bottom line because credit cards are quite a profitable niche for AT&T.

The way they're positioning this in the letter is amusing, though: they quite downplay the airline mileage program and talk about the fact that their expensive calling-card phone service tied to the credit card won't be affected. As Kevin says: "Also note, there will be no change in your existing AT&T phone service. We remain committed to delivering the same high-quality service you've come to expect from us."

What I think is interesting is to read this letter with the question "how much does voice over IP, which is beginning to make serious inroads into the long distance business thanks to Skype and similar, affect this change in the AT&T policies?" It seems like that's an important factor. The very first paragraph of the letter is an apologia:

"I'm writing to you concerning an important change to the AT&T/AAdvantage program. The telecommunications industry has seen increasing competition, evolving technology, and the opening of new markets. AT&T must regularly reevaluate its offers and programs to position the company for continued leadership in a changing industry."

As for us, we switched a few months ago to a Frontier Airlines MasterCard anyway, because we decided that with 300,000+ miles on American Airlines, it was time to start accumulating miles with our local carrier instead. (you can learn about the Frontier Airlines MasterCard here)