Last night I figured something was up when award ticket prices appeared to vary based on day of travel and my prediction was correct–AA announced a substantial devaluation to its AAdvantage loyalty program today, effective immediately. US Airways also modified its award chart, effective immediately. The changes are bad, but not unexpected. The cardinal sin is the lack of the notice. AA’s decision to drastically alter key components of AAdvantage without giving customers any warning shows a profound level of dishonesty and myopia.
Imagine for a moment that you have saved for several years for an award trip to Europe and were finally within reach of that goal. You knew that a change to the award chart would be likely so you upped your credit card spending and deliberately flew American solely to earn points for that trip. Yesterday evening, you were just a thousand miles away from the 400,000 miles needed for two return AAnytime tickets between Los Angeles and London in business class. Now you are looking at 175K miles each way or 700,000 miles for the identical trip, a 75% increase! Like a banana republic, your hard-earned savings have lost tremendous value.
Here’s a brief summary of what changed today in terms of AAdvantage and US Airways Dividend Miles redemptions–
1. Elimination of stopovers in gateway cities on AA award tickets
Previously, a stopover was allowed in a North American “gateway” city (included US Airways hubs and non-hub cities like Hawaii) allowing for two stopovers on a r/t award or a single stopover on a o/w award. Many took advantage of this to book a “free one-way” at the end of their trip. Say you were flying from London to LA on a 50K saver business award. You could add on a free LA – Maui flight (for example) on any future date for no extra.
While a regrettable loss, it is not surprising considering that you could essentially get two awards for the price of one. Still, the move puts AA at a competitive disadvantage now with United MileagePlus and Delta Skymiles, both of which allow stopovers on a r/t award (Delta even allows stopovers on domestic awards, while United does not). US Airways continues to allow stopovers on awards (technically only in partner hubs and US Airways gateways, but this is rarely enforced) and I hope that the US Airways’ policy will eventually migrate to American.
2. Elimination of AA’s distance-based oneworld explorer chart
A secondary award chart that charged based on distance rather than region and allowed unlimited stopovers (up to 16 segments per ticket) now bites the dust on AA. It was rarely used (for every 20 clients I booked on a traditional region-based AA award, I would book one using the distance-based award) but still a nice option for those making round-the-world journeys or taking advantage of a couple sweet spots on the chart that made more sense than region-based awards.
3. Tiered-pricing based on demand for AAnytime awards
As I noted last night, starting in June AAnytime awards will vary in price based on demand for that particular flight. It is still unclear whether pricing will be dynamic or remain at certain (higher or lower) levels for certain pre-established dates. AA claims that prices will go down in some markets, but the value in domestic economy class redemptions is often quite limited, especially with British Airways Avios often providing a much better deal. US Airways already had a three-tiered award pricing system for flights on its own metal and will now price tickets similarly to AA.
4. A new US Airways award chart that more closely matches AA
US Airways made a few updates to its award chart, eliminating the popular 90K business class award from the USA/Canada to North Asia. That award now costs 110K while first class remains at 120K–no need to even think about a business class redemption if first class is available on even one segment. Oddly, traveling from Mexico or the Caribbean to South Asia remains 90K miles for business class. Stopovers are still allowed and agents remain geographically ignorant, which can often be used to your advantage.
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None of these changes are customer-friendly, but none of these changes really come as much of a surprise. What came as a total surprise to me was the lack of notice.
With cost-cutting US Airways CEO Doug Parker at the helm of the new AA, I knew there would be many negative changes to come, but I did figure they would be communicated in advance. The lack of notice of this devaluation represents a total blindsiding of customers–blatant dishonesty undermining AA’s pledge to be frank and forthright about the merger and its consequences.
An e-mail sent out to AAdvantage members demonstrates a shocking myopia from AA–a willful delusion–trying to spin today’s changes as positive. The e-mail does not even mention the negatives, only that standard awards will be cheaper in some markets.
Redeem for less Effective today for travel starting June 1, 2014, a one way AAnytime award now starts as low as 20,000 miles plus applicable taxes and carrier–imposed fees. Plus we’ve lowered the minimum number of miles needed for AAnytime awards to popular destinations like Hawaii, the Caribbean and Europe. Our lowest AAnytime mileage levels are available for more than 50% of the year. Don’t forget we still offer MileSAAver awards that can be redeemed for as low as 12,500 miles each way, plus applicable taxes and carrier-imposed fees.
What about the fact that AAnytime award double from 25K to 50K in some markets in economy class (yes, 50K miles for a one-way ticket in coach from LA to Miami!)? A coach ticket from LAX to LHR can be as high as 110K miles one-way (from 60K!).
Sadly, AA’s actions today show that it cannot be trusted. At least UA gave us some notice before its award chart was devalued. Thus far, AA has not touched the saver award chart and US Airways has not totally gutted its chart–but the time is coming for that. There is no way that AA will maintain pricing at current levels on a long-term basis.
So my recurring advice remains the same–if you have a specific trip planned over the next 11 months and you want to use miles, it is time to start looking now for award space. Lest you find in a few months that your miles won’t even get you out of the country…