Separation Soap Opera – American’s Love Lost For Alaska

You know that stage of a relationship where there isn’t any love left, you’re sleeping in separate bedrooms, but you have kids so you put on a strong public face and stay married for the sake of the children? That’s my view of the relationship between Alaska and American Airlines. It has been steadily deteriorating over time, and while many frequent fliers had a lot of (I think false) hope after Alaska split up with Delta earlier this year, the writing has been on the wall for some time.

If you follow airlines closely, you knew something was seriously awry when American began flying from Seattle to Los Angeles earlier this year. This was the only American hub where American didn’t have service on its own aircraft from Seattle, instead relying on Alaska to provide connecting flights to its domestic and international services. And Alaska is fully capable of doing this. They operate 14 nonstop flights a day between Seattle and Los Angeles, not counting an additional 4 Virgin America flights per day. Absent any rift in the partnership, there was absolutely no need for additional lift in this market–a market so competitive (in between Delta, Alaska, Spirit, United and now American) that fares are often as low as $59 each way. Also, consumer preference almost definitely isn’t in play; American service is inferior to Alaska in just about every way so it’s hard to imagine many consumers going out of their way to fly American over Alaska.

Meanwhile, though, Alaska fliers are the “kids” in the relationship. Despite struggles in the marriage, it has been very good for us with reciprocal frequent flier benefits. Elite frequent flier members have benefited from free bags and priority check-in, boarding and seating. For those of us in Seat 31B, however, the best part of this has been some very cheap mileage fares in economy class when booking with Alaska miles.

map sjo-dfw-pdx-sea-las

This American Airlines partner flight–with a long stopover in Seattle–cost only 15,000 Alaska Airlines Mileage Plan miles.

There are some particularly good sweet spots on the Alaska Airlines award chart with American Airlines, especially their off-peak flights. I flew to Barcelona on May 14th this year for just 20,000 Alaska Airlines Mileage Plan miles in American economy class, because Alaska follows the “old” AAdvantage peak/off-peak rules. I also flew from Costa Rica to Seattle, enjoyed a long stopover, and will be continuing on my journey to Las Vegas later this month. This cost only 15,000 miles–also an off-peak award. These are some of the best deals on the Alaska Airlines award chart–and more importantly, these awards are achievable for ordinary people who aren’t flying every week or doing crazy stuff to get miles.

There will likely be howls of protest from the blogosphere, but I don’t think they’re really justified. American massively devalued its own award program more than a year ago. It was untenable for Alaska Mileage Plan members to continue getting a better deal on American awards than AAdvantage members, particularly given that American flyers could easily credit their miles to Alaska. I knew this couldn’t last, and put my money where my mouth is: I have been burning my own miles on the best awards.

What’s next? Well, divorce probably isn’t in the cards, not yet anyway. At the end of the day, American and Alaska need each other–Alaska has very strong service throughout the West that American doesn’t have, and American serves Midwestern cities Alaska doesn’t. So this is the stage of the relationship where Alaska and American are no longer sleeping under the same roof; they are formally separated. But they’ll still put on a brave face and show up at the middle school parent-teacher nights as a couple. All of the changes go into effect on 1/1/18, so you will have until then to earn and redeem at current levels.

How I Booked To Minsk Without Paying A Mint

As I wrote in my previous article, it’s now possible for the citizens of 80 countries to visit Belarus without a visa. However, there are some significant strings attached, the most important of which is that you must arrive and depart by flight at Minsk airport.

Unfortunately, Minsk isn’t the cheapest place to visit, because there are limited flights. Only 12 airlines service Minsk, and two of those airlines only fly to Russia (so you can’t use them unless you have a Russian visa, because of the Customs control zone Belarus shares with Russia). That leaves you with only 5 routes on which it’s practical to use points–all StarAlliance, and one of which is on Air China from Beijing. The rest are non-alliance airlines like airBaltic, Belavia, Ukraine International Airlines and even an airline called Motor Sich which flies to–and I can’t even begin to pronounce this–Zaporizhia. Go ahead, I’ll wait while you go find it on a map.

Motor Sich Airlines

I fly a lot and have never even seen an airplane like this.

The cheapest roundtrip flights to Minsk cost about $200, and leave from Kiev. But you have to get to Kiev first, and that’s not exactly a cheap place to visit either. In this case, my journey to Minsk is starting from Barcelona (by the way, my trip from Seattle to Barcelona cost just 20,000 Alaska Airlines Mileage Plan miles). I was pretty flexible about where I ended up after visiting Minsk, but preferred that it be Kiev. I got my wish! By stacking two travel hacks, I used just 13,533 Chase Ultimate Rewards points for the trip. This will allow me to visit both Minsk and Kiev for fewer points than required to visit just one city using a StarAlliance award, and also required no cash out of pocket.

The first step was to find a good fare hack. Belavia, the state airline of Belarus, publishes a fare between Barcelona and Kiev that allows a stopover in Minsk. However, you can’t actually book these fares on their Web site, which only allows simple one-way and round-trip itineraries. Additionally, Belavia doesn’t publish their fares on most online travel agencies. As far as Orbitz (my usual go-to site for booking complex itineraries) is concerned, Belavia doesn’t even exist. Also, once I finally found a place to buy it (a Spanish travel agency), the fare was still higher than I wanted to pay.

belavia review

The title of the top Skytrax review is “Worst flying experiences ever”

I have the Chase Sapphire Reserve card. This card is dramatically over-hyped by other travel blogs (mostly because they get a commission for you signing up). However, the sign-up bonus was very good (100,000 points). Also, if I cancel the card before the annual fee comes due, I’ll actually make $150 on the deal (you get a $300 travel credit per calendar year, and I have already gotten two years worth of annual credit out of one $450 annual fee). While you can transfer the points directly to a number of airline programs at a 1:1 ratio, you can also spend them in the Chase travel portal at the rate of 1.5 cents per point. “No way they’ll have this flight,” I thought as I searched the Chase portal just for the sake of completeness.

And then it popped up. The exact itinerary I’d found on the Spanish travel agency–and nowhere else. The price even came in a few bucks cheaper. I couldn’t believe it! Most of the time when I search the Chase portal, the results aren’t very good (except for rental cars, where I have gotten some truly spectacular deals). Hotels generally cost a lot more than other places, and flights tend to cost the same or more. The selection is not only more limited than most travel sites, but the portal is also slow and clunky to use. But there in front of me was a perfect itinerary for 13,533 points with no cash out of pocket! Well, anyone who reads this blog knows I like to fly for free. I went ahead and booked it.

What do I expect? To be honest, I have no idea. The Skytrax reviews of Belavia are very much a mixed bag–your experience really seems to depend upon the crew you get and the aircraft in use. However, the schedule was better than any other airline, and I could go for free. Hard to beat that!

While the deals usually aren’t spectacular with the Chase travel portal, there are occasionally good surprises. Before you transfer your points, be sure to compare what the cash fare would be. You might be pleasantly surprised.

 

Why You Shouldn’t Get The Chase Sapphire Preferred

I’m very often asked “Which credit card should I get? Should I get the Chase Sapphire Preferred?” This is rarely a surprising question. Bloggers go on and on endlessly about the Chase Sapphire Preferred because it pays them the highest commission. It’s certainly not a bad card, but it isn’t the best one either. And it carries a $95 annual fee. So let’s do a deep dive and see whether it’s a card you should get:

Is this the best card for you? Maybe not.

Is this the best card for you? Maybe not.

Untrustworthy Ultimate Rewards Points

The points you’re earning with the Chase Sapphire Preferred are Ultimate Rewards (UR) points. Who backs them? Chase. What are they worth? Whatever Chase says they are, and they can change the value whenever they want. They are not airline, hotel or rental car points. This can be dangerous; if the bank shuts your account down (and they can do this for essentially any reason or no reason), they can take all of your points and there’s nothing you can do about it. The bank can devalue the points and benefits whenever they want, as other travel programs do. Points are considered a discount, not cash. This actually benefits you for tax purposes, but it’s not a good thing at all when it comes to your rights around devaluation. In short, you don’t have any. There have been multiple cases with different banks shutting down accounts of people who are too good at working the programs.

You can legally count cards in Las Vegas and gain an advantage in blackjack, but the casinos can legally refuse to play with you. Banks play basically the same game with points. My recommendation is never to maintain high balances of bank points, because they could pull the rug out from under you at any time.

Sketchy Sign-Up Bonus

Right now, you can get a 50,000 bonus points for signing up and an additional 5,000 points for adding an authorized user to the card. The catch? You have to spend a whopping $4,000 in the first 3 months of having the card. This used to be easy when you could buy Visa gift cards or Vanilla Reload cards and load them to an American Express Bluebird, which you could then use to pay your credit card bill. However, American Express shut this down last month, and ever since it’s gotten a lot harder. Are you sure you can spend $1,333+ per month on a credit card without buying a bunch of crap you don’t need?

The worst part: If you don’t achieve the spending threshold, you don’t get the bonus. Simple as that. Chase is banking on this.

Pathetic Points Transfers

Chase boasts that you can transfer points at a 1:1 ratio to travel partners. The problem is, most of their partners just aren’t very good. 40% of the transfer partners are hotel programs, and they’re the ones with the least valuable points in the industry. The airline partners aren’t much better (although there can be sweet spots with each one). Redeeming British Airways Avios points often involves paying hefty fuel surcharges and the best awards–on Alaska Airlines–can only be booked over the phone. Korean Air SKYPASS not only has a horrendously expensive award chart, but booking awards is a giant hassle and you can only book tickets for yourself and immediate family members (with extensive documentation requirements), not friends. And after the United award chart devaluation, it’s really only worthwhile to use Mileage Plus points on United–the least reliable airline in America.

It’s not that there aren’t sweet spots in each of these programs that can make them worthwhile. It’s just that airline points devalue faster than Zimbabwe dollars, and hotel points are nearly as bad. And if you want to earn airline points, the benefits tend to be much better with airline affiliate cards (for example, you get companion passes, drink coupons and free checked bags with many airline cards).

Dodgy Discounts

“Get 20% off travel!” claims the headline. Unfortunately, there’s an asterisk, and it’s a big one: you can’t book your travel directly with hotels or airlines. Instead, you have to book through a Chase travel agency portal. And as you may have guessed, this doesn’t give you all of the options, and the prices shown are often higher than you can get booking through other sites. The “20% savings” might actually end up costing you money.

Wrap-up

Should you get the Chase Sapphire Preferred? Sure, if you want to support your favorite travel blogger with a fat commission by using their affiliate link. Otherwise, it’s not the best travel card out there, and it isn’t by a long shot.

Support Seat 31B And Get 50K Southwest Points

UPDATE: It’s back! Get this deal before it vanishes.

I don’t normally share credit card offers because every other travel blog is awash with them, and very few of them are actually good. However, I will occasionally share a deal that I genuinely believe is actually a good one. How can you keep me honest? I’ll tell you a secret: timing. The best time to get an airline affiliate credit card is near the end of a fiscal quarter, and near the end of the fiscal year is best. All the banks are trying to hit their numbers so they offer better deals. That’s why we’re seeing an exceptionally good deal from Chase on their Southwest Airlines Rapid Rewards credit card. This offer expires November 15, 2016.

What’s the deal? An exceptionally generous 50,000 Rapid Rewards points after an easily achievable $2,000 minimum spend. The regular offer (available here) is half as generous: 25,000 bonus points with a $1,000 minimum spend. This can add up to 10 or more free flights depending upon how you redeem the points. For the Seat 31B traveler, no other offer comes close.

Grab this deal and support Seat 31B!

Grab this deal and support Seat 31B!

Southwest has a different frequent flier program than most. It is based on points rather than miles and is revenue based. So, this program can be considerably more lucrative for many domestic flights than other frequent flier programs. This is because the price of awards is loosely based on the price of a paid ticket, although not exactly. There are “sweet spots” based on the day of the week that you fly and the airport you fly from.

What are some of the better award rates? If you are getting 1.5 cents in value per point or greater, you’re doing pretty well. Redemption values will vary from as low as 1.2 to as high as 1.9 cents per point, with the highest prices on popular dates and routes (particularly booked last-minute) and the lowest ones booked on less popular dates and routes (particularly in advance). The sweet spot is short-haul flights booked in advance. I use Southwest points when I can plan ahead and when I can be flexible to get the best deals and have flown from Los Angeles to Seattle for under 5,000 points. A trip between Ontario and Sacramento I’m taking in December cost only 2,819 points. When you compare this to other programs, it’s an incredible value. British Airways, generally considered the best “legacy” airline program for short-haul flights, now charges a minimum 7,500 points for a short-haul flight.

Another advantage of the Rapid Rewards program: no cancellation fees. I will often use Rapid Rewards for speculative bookings where I’m not 100% sure whether I’ll actually take a trip. I’ll book the ticket well in advance to lock in the best redemption rates, and if I can’t actually go, I can cancel the trip without penalty. As long as you cancel 10 minutes or more before the flight’s departure, you will get back all of the points. Also, don’t forget to keep checking to see if the price goes down. If it does, just refund your ticket and re-book at the lower rates. This happens more often than you might think!

Finally, don’t forget that Southwest charges no baggage fees. I fly them fairly often if I need to check bags, because you can check up to 2 bags free of charge. This saves you $120 versus most airlines on a round-trip flight (if you check two bags). On short-haul flights where the fares are low anyway, baggage fees on other airlines can sometimes exceed the fare!

There are different flavors of the current best offer. This version has a $99 annual fee and $2,000 minimum spend, but you do get most of the value of the annual fee back because it awards 6,000 bonus points at each renewal and includes free drink coupons. Also, if you use our magic link, Seat 31B receives 5,000 bonus points. Other offers for the same card may waive the annual fee for the first year (these are targeted offers for which you may or may not qualify), but with those deals, you don’t get the bonus points at renewal. This card also has no foreign transaction fees, which isn’t the case with all Southwest Airlines cards. I’m comfortable offering this card because I’m confident there isn’t a better deal out there, and it represents a good value for Seat 31B readers.

How You Can Go To Europe For $89 Roundtrip

I have never posted about a credit card on Seat 31B. I suppose there is a first time for everything. Don’t worry, I haven’t sold out and become a credit card salesman.

US Airways was acquired earlier this year by American Airlines, and has been slowly absorbed into American Airlines ever since. Its mileage program, Dividend Miles, is still a stand-alone program, although it will be merged with the American Airlines Aadvantage program early in 2015. So, if you have US Airways Dividend Miles, they will become American Airlines Aadvantage miles and the Aadvantage program rules will then apply.

It is all but a foregone conclusion that the Barclays US Airways MasterCard is going away when the programs merge, because Citi is the preferred card partner for American Airlines. However, it’s still available and Barclays is running a special referral promotion. If you are referred by an existing cardholder, you can receive 50,000 miles on your first purchase. This is enough for a round-trip winter ticket to Europe in Seat 31B with miles left over. It will also get you two roundtrip tickets within North America, or a ticket to Hawaii or South America with miles left over. There is an $89 annual fee that is not waived. This is much better than the usual offer of 40,000 miles after spending $3,000.

usairways-mastercard-big[1]

$89 plus the cost of a pack of gum definitely isn’t a bad price for a round-trip economy class ticket to Europe. So, I’m comfortable recommending this deal. It doesn’t come with the pitfalls common to most other credit card offers, which are rife with tricks and traps. You get a few other perks for your $89 annual fee, including a companion fare certificate good on US Airways flights, a free checked bag on US Airways, and priority boarding on US Airways. I’m not sure what will happen to these benefits when US Airways disappears as a brand, so I’m not assigning a whole lot of value to them. If you plan to use the companion fare, I recommend that you book it as soon as you receive the certificate.

Overall this isn’t a bad credit card, except for the annual fee (you won’t want to keep it for more than the first year) and the very high APR. The general Flyertalk consensus over Barclays customer service is that it is terrible, but I deal with them exclusively online and haven’t had any problems. The trouble seems to come from calling them; telephone customer service is rated inconsistent at best.

If you want the card, I will be happy to send you a referral link. Just contact me from the email address where you’d like the link sent, or leave a comment below with your email address (note I moderate all comments and won’t publish these requests, so your email will remain private). My email address is tprophet [at] seat31b.com. In the interest of full disclosure, I will receive 5,000 bonus miles if you sign up for the card through my link. So, if you want to share this offer with friends, please don’t forward the email but have them contact me directly so I also get the bonus for referring them.

Unlike the links you’ll find on other blogs (which pay bloggers actual money rather than a paltry few extra bonus miles), this is–to my knowledge–the best currently available offer for this card. It’s also a (relatively) quick and easy way to earn enough miles for a trip to Europe for less than $100, giving it the Seat 31B seal of approval.

This offer expires January 18, 2015.

HOT: Save At Least 20% On All Flights Right Now

As you have probably heard, the Russian ruble has effectively collapsed. This has created a tremendous arbitrage opportunity, but only if you take immediate action to leverage it.

ruble chart

The ruble effectively collapsed today

Airline tickets are quoted and priced in GDS systems, and currency conversions aren’t adjusted real-time. With the rapid collapse of the ruble, this means that you can effectively get a discount of 20% or more by paying in rubles versus dollars.

So, let’s look at a nice peak season flight from Los Angeles to Costa Rica on anywayanyday, a Russian travel agency:

lax-sjo price in usd

A typical peak season flight price to Costa Rica

As you can see, it’s $792 in US dollars. This is a typical non-sale fare price to Costa Rica during the peak season. Wouldn’t it be nice to turn this into a good peak season sale fare instead?

Currency selection menuIf you change your currency selection on this menu from USD to RUB, you can pay in the Ruble currency. Note that it’s a good idea to call your bank before you do this, because there is a slight possibility that they might consider it unusual that you are paying for things in rubles on a Russian travel site. By this, I meant that they will panic and block your card, which will cause you an endless amount of hassle. Why use a Russian travel site in the first place? It’ll be very hard for anyone involved to argue later that you shouldn’t be able to pay for things in Russia using rubles.

Now, let’s see what happens after you change the currency:

Yikes, that's a big number!

Yikes, that’s a big number!

The price becomes 41,638 rubles. So, let’s see how much that is worth in dollar terms:

ruble to usd conversion

Well, that’s interesting, isn’t it? It’s $196 cheaper to pay in rubles.

Folks, this sort of arbitrage opportunity almost never happens and it will not last. Take advantage while you can!

UPDATE: Many airlines are starting to correct this by repricing their tickets in the GDS systems. With British Airways, it is actually less expensive to book in dollars or euros now. Double-check the conversion before you book!

US Bank LifeMiles Visa Bonus: Read The Fine Print

A few months ago, US Bank ran a 40,000 mile signup bonus for the Avianca LifeMiles visa card. The Avianca program is one of the most generous in the StarAlliance for booking partner awards, if its limitations are acceptable to you. These limitations are substantial. The program doesn’t allow stopovers, you can only book what is available online even if other award space is available elsewhere, and the call centers are in El Salvador and Colombia (it’s best if you speak Spanish). However, there are some real advantages; award rates are reasonable and there are no close-in booking fees.

US Bank Avianca LifeMiles Visa

There’s always a catch.

I pulled the trigger and signed up. 40,000 miles is double the usual bonus offered for this card. As advertised, the deal was for 20,000 miles after the first purchase, and 20,000 miles after spending more than $3,000 within the first 120 days. Well, that seemed easy enough to achieve, and it was. I put the card at the top of my wallet and made the $3,000 minimum spend in the first month. A month later, 20,000 miles showed up in my Avianca account.

Wait a minute. Only 20,000 miles? I emailed US Bank, who explained that the bonus miles are delivered separately and I would receive them within 6-8 weeks. I was definitely not happy with the delay; frequent flier programs devalue very rapidly (often without prior notice) so 20,000 miles today could be worth the same as 10,000 miles tomorrow. However, I was also traveling on a complicated round-the-world itinerary and didn’t really have time to argue across multiple time zones so I just gritted my teeth and hoped that a devaluation wouldn’t happen in the interim.

8 weeks later, there were still no bonus miles!  I emailed US Bank again. What I found out (and which their Twitter team confirmed) is shocking. The 8 week clock starts after the first 120 days! Yes, it takes a full six months after completing the minimum spend to receive your bonus miles. And you will not receive the additional 20,000 miles if you close the card before then! This is something that I have never seen before with credit card bonus miles, and it’s a very disturbing trend.

A lot can happen in frequent flier programs in 6 months. I have not only missed the entire summer travel season (and I was counting on using this promotion for a flight this summer), but I would not be surprised to see a massive devaluation strike before my bonus miles are deposited. Avianca has devalued their LifeMiles program overnight in the past, and I expect they may do so in the future amid across-the-board devaluations in nearly all other frequent flier programs this year.

This definitely changes the game with credit card miles and points. For most people, collecting airline miles and points is a bad way to earn free flights. Hotel and other loyalty programs (such as American Express Membership Rewards) are starting to look a lot better.

Will An App-O-Rama Clobber Your Credit Score?

In February, I did an App-O-Rama and applied for several credit cards in order to secure bonus miles to use for upcoming travel:

  • Citi Aadvantage Visa: 50,000 mile bonus, annual fee waived the first year.
  • BofA Alaska Airlines Visa: 50,000 mile bonus, annual fee not waived.
  • Chase Marriott Rewards Visa: 60,000 point bonus, annual fee waived the first year.
  • US Bank Avianca Visa, 40,000 mile bonus, annual fee waived the first year.
  • Delta American Express, 100,000 mile bonus, annual fee waived the first year.

Note that all of the above offers were exceptionally good ones. One was only available for 2 weeks, and none of these offers are now available.

This is the first time I applied for so many credit cards in such a short time, and I expected an impact to my credit score. I considered carefully whether I should really do this, but given that I don’t really need credit for anything (I have no debt except for my mortgage and I don’t need any), I decided that it didn’t really matter. I was approved for all of the cards, and didn’t have to call any reconsideration lines or anything crazy like that. Citi didn’t approve me “on the wire,” but after a day they approved my application manually and I received the card a couple of weeks later. I have properly received all of the bonuses except for the US Bank Avianca Visa, which posts 8 weeks after the final statement in which the minimum spend is met.

So, the impact to my credit score? After opening the new accounts, it dropped from 820 to 794. This was a pretty substantial hit, although it’s still in roughly the 95th percentile of American credit scores. The more interesting thing is what happened 3 months later after using all of the cards to meet minimum spend requirements and paying off the balances. My credit score went up to 830! I was pretty surprised to see this, and my credit score is now in the top 1% of American households.

The key takeaway? If my experience is any guide, don’t worry too much about the long-term impact to your credit score from opening a bunch of accounts to earn the signup bonus. In my case, there was actually a positive impact from signing up for a bunch of credit cards and going on what amounted to a massive shopping spree. I’m not sure that this is how things should work, but in my case, it’s how they actually did work.

AAxed: Aadvantage Award Change Flexibility

Business and first class award tickets are a great use of miles, but it’s almost impossible to actually redeem these awards. Don’t believe all of the stories you read online about being able to effortlessly redeem your miles for a luxury experience. It is sometimes possible if you really work the system, but the time and effort involved is why I have always focused on using my miles to take me to faraway and interesting places in economy class (it’s all economy seats to Ushuaia, Argentina and Adak, Alaska anyway). Unfortunately, one of the most useful options for grabbing business class award seats is, for some customers, now gone in the American Airlines Aadvantage program.

One of the particularly nice historical Aadvantage program features is the lack of change fees and the ability to make “mixed class” bookings. So, for example, if you are booking a long trip that you’d like to take in business class, but one segment is only available in economy, you can book the missing segment in economy class (while paying the business class award price) and call in later to upgrade that segment to business class if an award seat opens up. The same goes for changing award classes. If you book an award in economy class because (as is usually the case) it’s the only thing available, and you find business class space available later, you could call in, upgrade and pay only the mileage difference between the award classes. This is what I planned to do when booking an award from Kunming to Hong Kong to Los Angeles to Vancouver to New York. The difference in cost is only 20,000 miles for this itinerary, and it’s well worth it for business class on Cathay Pacific.

This has all changed if, as I do, you have an existing booking that includes a stopover in the North American gateway city. Even if you don’t change anything except the class of service, the award has to be reissued at the new mileage rates and under the new rules. This is yet another change that Aadvantage has suddenly made without prior notice or even any “grandfathering” provision for award tickets issued prior to the change. So, the precedent has now been set.

You’d have to be crazy to book a “mixed class” award now. If American changes the award chart or rules again, you will have to “buy up” to the then-current price and be subject to the then-current rules. Given that it is routinely necessary to book business class award seats 330 days in advance, booking a “mixed class” itinerary is a very risky bet.

The situation could be even worse than I have already been able to confirm. American Airlines has always been flexible with changes to dates and flights in the Aadvantage program, and charges are free as long as the origin and destination cities remain the same. It is possible in the future that changing the dates on an itinerary would also require “buying up” to the then-current price. The trigger seems to be whether the ticket is reissued or not. Changing dates while keeping everything else exactly the same does not always require reissuing the ticket. Making more substantive changes (such as switching a flight with a connection for a nonstop) may, and could cause the itinerary to re-price. It is also worth noting that US Airways, unlike American, charges $150 for every change to an award ticket and no changes are allowed once the itinerary has begun (except due to schedule changes or irregular operations). It is probably a safe bet that change fees will be introduced to Aadvantage soon, potentially creating a double whammy of increased prices and new, high change fees.

American Airlines has always had the right to change or devalue the Aadvantage program. Other airlines have also devalued their programs, but until recently, only Avianca (a Colombian airline) had suddenly devalued their LifeMiles program overnight, apparently following the example of Hugo Chavez devaluing the Venezuelan bolivar. Maybe American Airlines has been spending too much time in South America and the culture has rubbed off, but you can now add Aadvantage miles to the list of untrustworthy currencies. I personally recommend that you view the recent devaluation as a “warning shot” and empty your Aadvantage account now.

Higher Costs and Fewer Opportunities for AAward Travel

I woke up this morning to the news that American Airlines has devalued their Aadvantage program overnight with no prior notice, and in tandem with this, US Airways has also done the same. It is rare for a devaluation to occur with no prior notice, in a similar fashion to overnight devaluations of Argentine pesos and Venezuelan bolivars. These devaluations are actually worse, though. They hurt because they not only raise the number of miles required for award travel, but they also have introduced restrictions that can make miles even harder to use.

One of the biggest historical advantages of American Airlines award tickets was the ability to use a stopover on a one-way award. While this could be used to obtain a “free one-way” trip wherein your final destination is a different city than you originally intended, it could also be used for short stopovers which are helpful if you could not find a continuing flight from the gateway within 24 hours. If American had wished to close the “free one-way” loophole, introducing a maximum length of stopover (allowing for short stopovers only) would have been a fairer way to do it. Unfortunately now, if an award flight to your final destination isn’t available from the gateway city within 24 hours, you’re out of luck. You’ll either have to book a paid onward itinerary or try to find availability on another date.

Ah, availability. Now there’s the rub. American Airlines has introduced a third tier for award travel, which likely means that award tickets at the “saver” level (which are really the only award levels that deliver good value for redemption) will be even further cut. It’s already difficult, if not impossible, to find award tickets at the “saver” level. This will become even more difficult when stopovers are no longer permitted. Even awards that cost more because of the numbers of stopovers they allow have been eliminated. Mileage-based Oneworld awards (which people on round-the-world or intra-European itineraries found particularly valuable because they allowed unlimited stopovers) are no longer redeemable.

Finally, some trips will now take more miles, assuming you can find availability in the first place. US Airways Dividend Miles business class awards to North Asia now require 110,000 miles, up from 90,000 miles. “Aanytime” awards redeemed during periods newly defined as “peak” will now cost 5,000 miles more. For some domestic travel, coach seats will cost up to 50,000 miles each way! The goal posts have moved yet again.

Overnight, the American Aadvantage and US Airways Dividend Miles programs just became a lot less valuable. The lack of prior notice is an abrupt reminder that miles (in any program) are best earned and spent immediately. They are a depreciating currency, so holding large numbers of them will only result in eventual losses and the devaluation cycles are becoming ever more rapid. Points programs and their promises that “your miles are secure” are not credible, so “earn and burn” as quickly as possible.

Update: American Airlines responded on Twitter to the flood of controversy. Here is their comment on what we can expect going forward:

Harmonizing BusinessesI think this just about sums it up: you can probably expect that the least trustworthy and customer-friendly policies of both airlines will be combined in a headlong race to the bottom. It’s unfortunate to see this, but was hardly unexpected. If you have Aadvantage miles, I recommend using them now because this is likely not the only devaluation that will occur.