Rumor: American Airlines Award Devaluation Coming Soon

Of the big three US carriers, Delta and United have both devalued their awards during the pandemic. Only American has held firm. According to noted AA insider JonNYC though, that’s about to change.

Rumblings of Changes

Last week, JonNYC tweeted that “very very rough” changes are coming to the AAdvantage program and coming soon.

Jon is usually pretty spot on with his info, so this is definitely cause for concern. Especially if you’re sitting on a pile of American miles.

American has been heading this way for a while

The sun could be setting on a useful AAdvantage program

The move toward a revenue-based rewards program probably shouldn’t be a surprise if you’ve been following along. This started with introducing multiple “AAnytime” award levels. While there are two published AAnytime award levels, there are also three additional unpublished levels. Once you include Saver and Off-Peak rates, that makes seven different award levels. That’s about as straightforward as having ten different boarding groups, but I digress.

Prior to the pandemic, the AAdvantage program also introduced dynamic award pricing. This meant award pricing wouldn’t necessarily line up with the award chart, but would instead fall more in line with the revenue price of the ticket. If you’ve tried to book an award on American Airlines metal (actual AA flights), you’ve probably noticed some really random pricing at one time or another. Dynamic award pricing is why.

Say goodbye to award charts too

Despite the shift toward dynamic award pricing, AA kept its award charts. While it became harder to find consistent award prices, at least you knew whether you were getting the best rate based on the Saver-level pricing. It appears that will be changing.

The former head of the AAdvantage program alluded to ditching award charts earlier this year. Since then, his former boss and Chief Revenue Officer, Vasu Raja, has done nothing to dispel this. In fact, he’s openly stated that he wants the program to become more revenue-based.

The writing has been on the wall for a while that AAdvantage was planning to become less transparent and more revenue-based. These statements along with Jon’s post make it clear that negative changes to the AAdvantage program are imminent.

What I’m most concerned about

Through all of this, one thing has remained consistent – partner award charts. AA’s partner award chart has remained the same since the Great Devaluation of 2016. However, that seems likely to change soon. If/when it does, the AAdvantage program will probably become one to AAvoid.

For the past few years, partner awards have easily been the best way to use American miles. The on-board product has continued to get worse while award prices on American metal have continued to increase. Why would you want to pay more for something that’s worse?

Seriously, who would pay more for premium economy on AA than business class on JAL??

There has been some recent smoke around a devaluation of the partner award chart. Whether that takes the form of just eliminating award charts, increasing award prices or both is yet to be seen.

If you’re looking to book partner awards anytime in the next 11 months, I’d do it ASAP. American eliminated award change and redeposit fees, so there’s no harm in making speculative bookings. Locking in the current rates can be a solid strategy to get out ahead of this devaluation

Don’t buy the BS spin

Whenever these moves become official, the program will surely release a statement saying how these are enhancements that customers have been asking for. They’ll wax poetic about how these changes are good for customers. Don’t buy it.

Dynamic award pricing is not a positive for customers. Removing award charts is not a positive. At the end of the day, only two things will hold true:

  • Your points will be worth less than they are now. That is not good for you.
  • It will be harder to understand what is a good value and what is not. That is not good for you.

What you can do to protect yourself from devaluations

As we’ve seen time and time again, award program devaluations are inevitable. Over the past 18 months, United devalued their awards once while Delta devalued their awards twice. Even a pandemic couldn’t stop them. When it happens, American will be the next, but certainly not last to do it.

The best way to protect yourself from these devaluations is by collecting flexible points currencies – points issued by a bank such as Amex, Chase, Citi, or Capital One. These points can be transferred to numerous airline programs. Unlike airline programs though, they usually have a minimum baseline cash redemption rate such as 1 cent or 1.5 cents per point. If there’s a great value in a partner program, you can transfer points over. If not, you can redeem your points at a cash value. It really is the best of both worlds!

Final Thoughts

American Airlines’ AAdvantage program seems to be heading toward an imminent devaluation in the next few weeks. Unfortunately, devaluations are just a part of the points and miles game. While it’s disappointing, it’s far from surprising.

What are your thoughts on the rumored AAdvantage devaluation?

Author: Stephen Hoechst

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3 Comments

  1. The more massive the devaluation the more it will be “due to customer demand” or something like that, because customers love nothing better than not knowing the price for something but knowing that it will be more expensive than currently. I’ve already pretty much written off Skymiles. If AA makes this devaluation a bad one I’ll ditch them as well and earn my miles through Alaska and flexible currencies.

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  2. AND THEN ALL THE AA ELITES WILL START CREDITING TO ALASKA. IM SHOCKED THEY HAVENT BEEN DOING THAT ALREADY EN MASSE.

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  3. I suppose I might be the historian here. I started collecting AA miles in 1983 and racked up a whopping 140K miles: enough for two business class tickets to Australia. Never used them, waiting for the right time. A “new program” (read: diluted) was invented several years later for late arrivals to the FF scene but my original miles were kept in the old program. The original program was then scrapped and I got a 25% “bonus” moving into the “new” program a long time ago. Their story was that it was “too expensive to maintain a new and old program at the same time.” (hey, it was just a friggin’ data base, where’s the admin cost?) Still didn’t use them. I live near a Delta hub, don’t fly AA at all. Still have the miles, don’t think they would get me to LAX at this point. Message: the trend line is quite long here. This has been a major financial liability for the airlines. This is not the end of it. I now have the “flexible point currency” religion thanks to Jon and Ben.

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