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.
I'm expecting these AAdvantage changes mentioned are coming fast and coming hard.
Probably less than 3 weeks away and, personally, I expect they will be very very rough. https://t.co/sIl3NkYQPN
— ˜”*° JonNYC °*”˜ (@xJonNYC) September 29, 2021
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 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 While there are two published AAnytime award levels, there are also three additional unpublished levels.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?
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!
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.