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.

21,152 Miles Around The World For Under $1200

In an unusual departure from my usual Seat 31B, I am sitting in the British Airways lounge in Seattle waiting for a delayed flight. I am on my way to The Netherlands to participate in my graduation. On Friday, I’ll officially be an MBA!

ba_loungeOrdinarily, I don’t fly in business class. It’s almost impossible to book it at the “saver” or “low” award level, and even if you can, it’s not particularly good value. This is especially true on British Airways, which requires payment of a fuel surcharge ($331 in my case) which can sometimes approach the cost of a ticket. In this case, it was the best deal I could find. Paid tickets are incredibly expensive right now (a one-way in economy class is going for around $800 from Seattle, even on Icelandair) and no award space was available in economy class. Using my Aadvantage points, I was able to redeem at the “saver” award level in business class. On the bright side, I will be very well rested for graduation.

This time, I will be traveling around the world on a combination of British Airways, Aeroflot, Cathay Pacific and Alaska Airlines. This trip will be entirely in economy class except for SEA-LHR-AMS. I will also note that Russia just invaded and annexed Ukraine and I will be flying through Russia without a visa, which is going to make matters really interesting. The total cost of the trip was $1174 in paid fares, taxes, fuel surcharges and booking fees.

rtw_clockwiseSEA-LHR-AMS: 50,000 Aadvantage miles (earned from a single Aadvantage Citi credit card signup, annual fee waived and $3,000 minimum spend) plus $331 in taxes and fuel surcharges. Club World business class

AMS-LGW+LHR-ZAG: $163 paid fare on British Airways. This fare is eligible to earn me 1,383 Alaska Airlines Mileage Plan miles.

ZAG-SVO-PEK: $530 paid fare on Aeroflot. This low fare, amazingly, earns 100% mileage credit on Delta SkyMiles. I will earn 4,773 miles. The only catch is that I have to transit Russia with no visa in the midst of a Crimean invasion, and also amid very frosty relations with both Europe and the United States. My mother isn’t thrilled I have chosen to do this.

PEK-KMG: I will transfer ICBC points earned through my American Express card to my Hong Kong Airlines account, and redeem them for a domestic intra-China ticket from Beijing to Kunming, Yunnan. This has to be done in person when I arrive in Beijing. The redemption fee, as best I can tell, is zero! Now that’s the kind of price I like.

KMG-HKG-LAX: 30,000 Aadvantage miles (earned for free by signing up for an Aadvantage Visa to join my Aadvantage MasterCard, annual fee waived with $3,000 minimum spending requirement) plus $71 in taxes and booking fees. Note that I won’t even be realizing the full value of the award on this trip, because I added a free one-way to New York later this summer on the same award.

LGB-SEA: $79 paid fare on Alaska Airlines. This will earn me 965 Alaska Airlines Mileage Plan miles.

I would have paid about $1200 for a round-trip ticket from Seattle to The Netherlands in economy class. By taking advantage of miles and points, I am flying all the way around the world for around the same price and 1/3 of the trip will be in British Airways Club World, one of the best business class services in the air. This is the beginning of an epic two month adventure, and it’s going to be amazing!