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.

Leave a Reply

Your email address will not be published.