As the mantra goes, miles and points are a depreciating asset and are better burned than stored for future use. American Airlines is offering a generous 20% transfer bonus on points from Starwood Preferred Guest. Essentially, that means instead of 25,000 AA miles for 20,000 Starpoints, through August 7, 2015 you will receive 30,000 AA miles for 20,000 Starpoints. Why would AA offer a transfer bonus on what is already considered by many the most generous loyalty redemption program? I’m convinced that we are on the eve of a big devaluation. So should you take advantage of this promotion?
Why AA Miles are Valuable Now
First, let’s talk about why AA miles so valuable. In terms of airline currencies, I’d rank AA above United and Delta right now because of several premium-cabin redemption sweet-spots that offer a tremendously better value than any competitor. First Class to most of Asia, for example, is 67.5K one-way and business is only 55K. United charges 120K one-way to fly its partners in first class to Asia and 80K for business class. Delta charges 70K for business class and does not offer first class redemptions. With this transfer bonus, you can book a r/t to Southeast Asia in Cathay Pacific or JAL First Class for less than the price of a one-way first class ticket on United. Business class is also a far better deal on AA than UA or DL.
Another option is Australia — you pounce early enough and you can find a first class ticket from New York to Sydney in Qantas first class with a domestic connection to Perth for 72.5K AA points or a tad over 50K Starwood points. The same flights in first class would cost 237,500 BA Avios one-way! One-way!
AA AAdvantage Devaluation is Coming
There are other examples as well, but the point is AA offers some amazing premium cabin redemption options right now and CEO Doug Parker has hinted that AA plans to make serious adjustments to the chart but has put other priorities first.
When you have such a great imbalance, further exacerbated by transfer promotions like this and the glut of US Airways miles that became AA miles earlier this year, such award charts cannot be sustainable. I don’t think we are giving AA any ideas when we point out that with this transfer bonus you can go to the Maldives in first class on Etihad for 60K miles each way — I am confident AA is aware of what is going on and are just devising 1.) how painful the cuts can be, 2.) whether AA too will embrace a revenue model, and 3.) is there a third way?
To be fair, AA did run this identical Starwood transfer promotion last July so it is not unprecedented nor an indisputable sign of an immediate devaluation.
Take Advantage of Starwood Promotion Only if You Can Book Your Trip in the Next Few Months
AA has promised us notice before the next devaluation, so I am hopeful that any drastic award chart updates will be prefaced with at least a couple months of advance warning. Still, unless you have a trip in mind, I would not consider big transfers to AA under this promotion.
First, the Starwood points are valuable for hotels — sometimes you receive an even better bang for your buck than with airline transfers. Second, don’t forget Alaska as well. Alaska is not offering a transfer bonus now, but you still get 25,000 Alaska miles for every 20,000 Starpoints and Alaska has incredible redemption opportunities on Emirates, Cathay Pacific, and Korean Airlines. Third, Starwood points remain the most versatile in the hobby and sometimes you may need to transfer to a different program based upon the space available on your specific travel date. AA is not the answer for every region or for every trip. Aeroplan, for example, is often a better value to Europe at 90K r/t in business (75K Starpoints) with many more European partners than AA has.
I know of no impending news of a devaluation, but I also have been in this game far too long to think that the current imbalance between Delta/United and American can last, especially on Asia routes.
Remember that you can hold AA award reservations for five days prior to ticketing, meaning that you can place space safely on hold before you transfer the points from Starwood. Generally, Starwood transfers take 2-4 days, so you have just enough time.
There are more T&Cs, but just keep in mind–
To qualify for this AAdvantage® bonus mile offer, member must initiate the AAdvantage mileage conversions with the Starwood Preferred Guest® program between 12:00 am Central time July 1, 2015 and 11:59 pm Central time August 7, 2015.
AA already took a pretty significant hit to its own redemptions. International saver award availability hardly exists anymore, and AAnytime reward prices are up significantly. They used to be 100k one-way in business class to most of the EU, now I priced out most of a month at 180k.
True, this was a devaluation on AA’s own metal, but I’ve seen an uptick in sAAVer space lately on AA metal if you book far in advance and the key is partners — plentiful availability on JL, CX, QR, and EY — can’t beat that!