What American Didn’t Say About its Devaluation

In some ways what American didn’t say about their devaluation is even more interesting than what they did say.

United made major changes to their award chart ten years ago increasing first class Europe awards from 100,000 to 125,000 miles round trip. They increased business class roundtrips between the US and Australia from 90,000 miles to 110,000 miles. First class went up 20,000 miles to 140,000 (sigh…).

They made this bitter pill go down a bit easier by promising “saver awards available on every flight to every destination.”

When British Airways announced a huge devaluation at the beginning of the year which went into effect in April they softened it:

Guaranteed availability: For ‘this year’ BA guarantees they will offer a total of 9 million award seats, including at least two business and four economy seats per flight made available when schedules load 355 days out. If not booked they may be withdrawn 45 days prior to departure.

The availability promises touch on what frustrates members most. So programs use the story that they’re going to make more award seats available as a way to get members to swallow the bitter pill of higher prices.

It even makes sense, that with higher prices the programs can better balance supply and demand. Maybe they’ll even spend more on those saver award seats and the airline’s revenue management folks will make more seats available.

It rarely really works out that way in a meaningful way that benefits members especially over time. But airlines use the availability line frequently when devaluing their points.

American’s story around their devaluation did not include this. On the one hand, they weren’t really spinning the program changes and I both like and appreciate that. On the other hand, if there’s even a credible claim that availability is going to get better, the long airline history is to make that claim. So the lack of such a claim seems telling.


American A321T First Class

American availability in premium cabins on its own flights used to be really good. That changed about three years ago. First class awards remained good to Asia especially until about 18 months ago. Now American is the most difficult US carrier to get premium cabin awards on (indeed, even coach awards are tough). I like my AAdvantage miles for partner awards.

However, American is a member of the oneworld alliance and oneworld doesn’t have as many members as Star. Star’s volume makes it better for business class awards to Europe and Asia and even South America. That’s advantage United.

On the whole Skyteam isn’t great for availability, and member airlines’ inflight products lag oneworld.

But being in oneworld, and not releasing much award availability themselves, is already a disadvantage of American miles. What’s more, Cathay Pacific has been releasing less award space to Asia and British Airways awards (BA is American’s primary transatlantic partner) come with fuel surcharges. Those are real constraints.

American needs to do better releasing its own award space. And ‘the deal’ as it’s being articulated by AAdvantage doesn’t seem to be “higher prices for better availability.” It’s just “higher prices.”

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Enough is enough! Even booking a year out – AA doesn’t release seats in biz that I need. I refuse to pay BA surcharges. With this latest blow to the award chart – its now more expensive and tough to get seats.

    I have a new strategy that I started last year and it has worked fairly well. No more AA EXP and I cut up my AA credit card. On paid travel I fly who flies direct. On award travel – I’ll transfer to a chase/amex/citi partner.

    My days of being loyal to AA are gone.

  2. Good point bringing up availability on awards for American Airlines. It is critical piece to the mileage game, if you can’t find awards what is the point…. I would really like to be able to measure “availability” between the airlines at their lowest redemption levels but it is too tricky.

    I don’t really find Delta or United really much better either. Booking almost a year out it can be nearly impossible t find awards especially on domestic legs. I agree that booking awards on partners is really the only way to go. For domestic I will stick with Southwest paid / points bookings. Just a whole lot easier.

  3. Reality is even with the lower accrual of revenue based there’s been no discernable change in availability on UA. If anything its own biz class awards have become more stingy.

  4. And what do people do? “Let’s go buy AA miles. They’re cheap right now”. Airlines pull this stuff off because they can and customers don’t seem to mind. Fly Southwest.

  5. Funny thing about AA miles is that the availability of F awards on 3 partners (EY, JL, and CX) keeps their valuation up where it is… I think that adds a lot of volatility to value of AA miles, in that they’re less valuable to me than Skypesos without these F awards.

    CX F awards seem to be getting more difficult to book. And EY F has reportedly been a hassle to book recently. I currently have more AA miles than I’d like, and I’ve booked all of the travel that I think I can take through EOS, plus several trips I probably won’t take.

    @Gary– where would you value AA miles, post-deval, if you knew you could no longer use them for EY, CX, or JL F? Qantas availability is pretty abysmal, and the value proposition redeeming for BA awards with a mediocre product and fuel surcharges isn’t very appealing.

  6. I wonder how many of those who really care about this DIDN’T message Suzanne Rubin or American that we were holding out with them UNTIL they devalued. I am a 40 year customer flying monthly who wants full mileage or I am not buying. I told them that several times. It probably meant little but I had hopes they were hearing from thousands of others the same message. When I complained about a crappy affiliate survey program compared to UA’s Opinion Miles, I got a call from Rubin’s office wanting more details. I asked the operative if they knew they had a real AAdvantage over the others now by continuing to offer full mileage value. He didn’t seem to think much of the point. I get the idea they didn’t hear from many others this message, loud and clear. They could have even advertised the true advantage. Instead a program named after it didn’t even take Aadvantage. I’m gone the day they devalue, just as with United and Delta. I’ll go to Alaska until they devalue, then fly devalued based on routes and flights only, picking up JetBlue nonstops I had avoided before.

  7. @Ethan

    Fly business class, there is more to life than flying F everywhere, especially with the sharp increase in award prices for that cabin.

  8. @Ethan this will reduce the value of American miles but I’m not yet sure I’ve settled on a new post-March 22 valuation [and what those miles will be worth March 22 does influence, in a discounted net present value sort of way, how much the miles are worth now]. Is it jut down to 1.6 cents? to 1.5? Have to work through this.

  9. My hope is that in addition to opening up more award space, they’ll also follow through on their statement earlier in the year that they’ll be offering up significantly cheaper, “less frills” fares. If “less frills” means not keeping my EXP benefits, then that would be a serious slap in the face.

  10. The drop in award availability for American is a result of the 5 day hold policy on awards by clicking a few buttons. That should be returned to a 24 hour hold (with exceptions), not a 5 day hold that ANYONE can block by just logging in. Great example are those who booked 10 mistake fares, but ended up flying none—blocking those seats!

  11. Gary, now that the devAAluation has turned out to be equal to or worse than anyone had expected for premium cabins, what are your thoughts on giving United a closer look? For myself, I get most of my miles and points from credit card usage at my business, with some sign ups and a little MS. United has much more agreeable routing rules, allows stopovers, charges no YQ, seems to have more availability, and now is comparably priced. That said, American doesn’t make you sleep in weird places like an abandoned army barracks due to ineptitude. I’ve never actually flown United, since I fly few revenue flights, but wonder whether the experience is normally acceptable.

  12. @Christian – I think United is better for business class awards to Europe and Asia. I think American is still better for certain first class awards, and their first class award pricing is slightly better (except that with BA you do pay fuel surcharges).

    American’s international upgrades are still from any fare, while United makes you buy a more expensive fare just to waitlist with a systemwide upgrade. That’s an expensive lottery ticket.

    American’s domestic upgrades for a top tier elite (Executive Platinum) are more favorable than for a United 1K in my view since 1K isn’t true top tier at United, Global Services trump for upgrades, and United also prioritizes any elite on a full fare that day over higher status passengers. That’s a deal-breaker for me since i fly to DC so often and government employee silvers on YCA fares will trump me for upgrades every time.

    United still doesn’t offer consistent wifi domestically, my United flight last month didn’t have it.

    Their hub locations are attractive for me, they have a club in my home airport, but they don’t work as well as American. But your situation may vary.

  13. @margaret – award availability was better even when they had a 5 day hold policy and even when they had a longer hold than that! holds aren’t the issue, there are plenty of routes where there are zero saver awards offered the entire year and that’s even when schedules are first loaded into the system. American’s hold policy is one of the few really positive things they’ve retained.

  14. Good points Gary. You are absolutely correct. It is very important to note that AA is not making any claims about increased award availability. This just confirms that AA miles will be worth less next year.

  15. I dunno. I’m not a blogger or road warrior. I’m not single and i’m not childless.

    so for the one or two leisure transoceanic trips a year that I make, i’ve had no problems using AA miles in J to Europe.

  16. Indeed, inability to redeem F awards on AA metal for international or transcon is a big deal. Even with the expanded EXP availability, there’s rarely an F award. AA doesn’t make awards available 331 days out, even for midweek flights in the off seasons, and they don’t release space close-in when it’s obvious seats are going unsold.

  17. I was going to do several mileage runs to keep EP, but have decided to burn my miles and give up chasing status. I’ll just pay for premium cabins. Almost all my travel is leisure, so I can wait for sales or just bite the bullet and pay up.
    For me, there is no longer any “loyalty” in loyalty programs.
    I’m feeling the beginning of the end (not the World, just frequent flyer loyalty)

  18. The higher levels, with no stopover, inability to transit a third region (ie Australia via Asia), low earning rates after July 1st, and almost no availability, really makes AA reward program a lot less desirable than UA Star Alliance. At least on UA you can do business to Australia for 160,000 miles and include a stopover in Asia with very good availability.

    Yes WN has a revenue based program, but rewards have no restriction – as they are available for all flights – so you can use them when you want.

    AA really needs to release a significant amount of new reward inventory. With everything being dollar rebate – they should almost open all flights to reward (at the saver level).

  19. Bom Dia:

    This is all bad.

    No first class redemption available from Houston to Sao Paulo for the next 11 months…

    I shall use what is left of my miles and walk/fly away but not with American….

  20. Glad to see you’ve changed your narrative about American miles being the best for South America finally Gary.
    I’m in the midst of burning a bunch of miles, and even partner awards that were easy 2+ years ago are hard or impossible now. I gave up on trying to find CX F, even within 7 days of departure, and even intra-Asia. I can’t even find CX J intra-asia within 14 days. Thankfully JL still works. LATAM continues to have the worst availability in any cabin of any airline in the world, and mirrors AA in letting seats go out empty rather than open them up to awards and upgrades.
    So, yeah, if United miles are 1.6-1.8, AA miles are circa 1.0 after this.

  21. Hit AA where it hurts. Cancel the AA credit cards you have with Citi and Barclays and LET THEM KNOW WHY.

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